Special Report

Ottawa’s broadcasting and telecommunications review panel recommends major changes to content rules

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The panel reviewing Canada’s telecommunications and broadcasting laws delivered its final report on Wednesday. Among its 97 recommendations, it proposed significant changes to the ways Canadian content is created and shared, and how the country regulates Big Tech. Here are the highlights.

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Talking Point

A government-appointed panel is calling for all companies that air or host media to be brought under Canada’s broadcasting law, removing the current exemption for digital platforms like Spotify and Netflix. The report’s 97 recommendations also include requiring foreign streaming services to pay sales tax, and aggregators and sharing platforms to link out to “accurate, trusted, and reliable” sources of Canadian news.

Content rules for all: The government-appointed panel calls for all companies that air or host media to be covered under Canada’s broadcasting law. “If you benefit, whether from subscriber revenues or advertising revenues from the Canadian market, you must make a contribution to Canadian content,” said panel chair Janet Yale. “And that means that the key creative positions must be held by Canadians.” A 1999 Canadian Radio-television and Telecommunications Commission (CRTC) decision exempted foreign digital services like Netflix and Spotify from the rules that domestic broadcasters must follow, including revenue-based contribution requirements. The panel is recommending Canadian-content spending requirements for streaming services and TV channels, instead of charging levies that are channelled to local productions through agencies like the Canada Media Fund (CMF).

A new classification system: The panel recommends that companies operating in Canada be required to register in at least one of three categories: curators, aggregators and sharing platforms. “Curators” include TV channels and online streaming services, which make and distribute content; they will have to allocate a portion of their programming budgets to Canadian content. “Aggregators” are cable companies and virtual alternatives, like Amazon Prime Video Channels, as well as “news aggregators such as MSN News and Yahoo! News.” YouTube, Facebook and other social or open-upload sites are considered “sharing platforms,” and would face levies.

The taxman cometh: Foreign streaming services should be required to collect sales tax, according to the panel. The Liberals campaigned on a similar proposal. Only Quebec and Saskatchewan currently require foreign tech firms to collect sales tax. The panel also proposed extending the $595-million print- and online-media tax incentives to broadcasters.

“Accurate, trusted and reliable”: The panel wants “prominence rules” to ensure aggregators and sharing platforms link out to Canadian “accurate, trusted, and reliable sources of news.” In September 2019, The Logic reported that submissions to the panel from the CBC and The Globe and Mail included a call to require digital platforms to make it easier for users to find Canadian content.

Cracking the black box: The panel thinks the CRTC should be given the power to audit how telecommunications and media companies and platforms “combine algorithms and artificial intelligence with Big Data.” Yale framed the issue as one of ensuring Canadian content is discoverable for domestic consumers. But requiring companies to open up their algorithms could contravene the USMCA, which specifically prohibits governments from examining source code, with few exceptions. The panel’s next recommendation also contravenes the treaty: it wants legislation clarifying the “liability of digital providers for harmful content and conduct” on their platforms.

Bodies in motion: The panel wants the Competition Bureau, the privacy commissioner and other regulatory bodies to examine “the use of Big Data by dominant online platform providers” and potential threats they pose to competition, cultural sovereignty and democratic institutions.

What about Mother Corp.? The panel calls for the CBC and Radio Canada to eliminate advertising over five years, “starting with news content.” In exchange, it recommends that the government make five-year funding commitments. The report also suggests removing specific references to television and radio in the CBC’s mandate, giving it more freedom in the media through which it publishes. The public broadcaster already has a longstanding online news operation and launched its Gem streaming app in December 2018.

Telecom corner: While the panel recommended major changes to the broadcast universe, its telecom suggestions were more technical. One standout recommendation was to give carriers access to public property like lampposts and utility poles to install 5G infrastructure, and to create new dispute-resolution mechanisms for different levels of government. Incumbent telecom firms have been pushing Ottawa for Canada-wide rules on where they can put their antennae and cables, and the CRTC has called for new powers to settle such fights. But municipalities want to be consulted and to collect fees on most placements. In the U.S., the Federal Communication Commission has tried to restrict cities’ powers in this area.

Technology-agnostic language (and new stationery): The report recommends renaming the CRTC the Canada Communications Commission, that the Broadcasting Act become the Media Communications Act and that the Electronic Communications Act replace the Telecommunications Act.

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The government’s response: Heritage Minister Steven Guilbeault and Innovation Minister Navdeep Bains, who commissioned the panel, said they’d examine the recommendations. “Reforms are needed to level the playing field on which conventional broadcasters and digital media companies compete,” they said in a joint statement. CRTC chair Ian Scott, meanwhile, said, “At first glance, it is clear that the panel recognizes that fundamental changes need to occur to fully enable the CRTC to act in the public interest.”

…And the opposition’s: Conservative MPs Michelle Rempel Garner and Steven Blaney followed the report’s release with a call for a broad overhaul of innovation, broadcasting and telecom policy, including giving individuals ownership rights over the data they produce; focusing on competition in telecommunications policy and considering spectrum leasing and other alternatives to the current auction process; and replacing content-funding mechanisms like the CMF and Crown corporations with “crowd funding type platforms.” Bains is mandated to encourage telecommunications competition and establish new online consumer rights, including data portability and withdrawing personal information they no longer want to share from providers. But Rempel Garner, the Conservative innovation critic, told reporters in Ottawa that a regulatory regime like the Liberals’ proposal or Europe’s General Data Protection Regulation is not nimble enough, nor does it provide business with sufficient certainty. The Conservative proposal allows consumers to value their data, possibly through “a data cooperative … or a stock exchange for data value,” she said. Both MPs said they plan to advance their proposals through parliamentary committees. While they differ significantly from what the Conservatives promised during last fall’s election, Rempel said she’d “consulted broadly” with her caucus on the proposal.

What’s next: Bains and Guilbeault promised to move on legislative changes “as quickly as possible.” But Rempel Garner and Blaney’s counter-proposals on Wednesday suggest the government may face challenges—or at least vocal opposition—to its bills when they reach parliamentary committees.

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