The government’s expert panel on broadcast and telecommunications law reform is expected to release its preliminary report on the results of its public consultation next month. The panel has remarkably kept the submissions to the consultation secret, rejecting an open and transparent policy making process that the government insists is essential to good policy development. I filed an Access to Information Act request for some of the more notable submissions (some have been made available and are posted online by the FRPC). An interim release of that request just arrived in my inbox and I’ll have a couple of posts on point over the next few days.
This post starts with the submission from Bell, which was released via ATIP and which I’ve posted for research and news reporting purposes. The running theme from Bell is a simple one: regulate others, but not us. For example, the Bell online video regulation proposal conveniently seeks to regulate Netflix, Amazon, and other large U.S. providers while largely avoiding regulation for Canadian-based services. It does so by limiting regulation to those Canadian services with $300 million or more in revenue from online video services (likely no one right now) vs. the same $300 million threshold or $1 billion in total global revenues for foreign operators (thereby capturing Netflix, Amazon, CBS, Disney, etc.). Bell acknowledges the difference, effectively arguing that Canadian policy should encourage Canadian market entry without regulation and that domestic market entrants have long been supporting the system.
As for the proposed regulation, Bell wants a mandated contribution of 20% of Canadian revenues to support Cancon. It argues that the same foreign companies that would be required to pay into the system would be ineligible to access the funding nor able to use their existing investments to off-set the mandated contributions. This is notable for several reasons. First, foreign sources are already outspending Canadian broadcasters such as Bell on priority programming such as English-language drama, yet Bell argues that spending is irrelevant. Moreover, while Canadian entities would be able to tap into the Canadian funding, companies such as Netflix would be required contribute hundreds of millions of dollars without being able to do the same.
According to Bell, the lack of access to funding for Canadian programming is irrelevant, since it claims foreign providers don’t want Canadian content. It argues:
In reality, it is pointless to expect foreign OTT providers to focus on qualified Canadian productions as they simply want content not that is uniquely Canadian but that is designed to reflect audiences in its largest markets and is attractive to all international markets in which they operate.
Why Canadian content can’t be both – of interest to Canadians and a global market – is not explained. Nor does Bell square its concern with the rising costs it faces to acquire foreign programming from the U.S., demonstrating telling Canadian stories is hardly a corporate priority.
The incredibly one-sided proposal would surely be subject to a trade challenge under the USMCA. While the trade deal features a carve out for the cultural sector, the U.S. would be entitled to retaliate against the measures with equivalent costs to Canadian firms. In other words, get ready for hundreds of millions in new tariffs against Canada if the Bell proposal were to be adopted.
Online video is not the only cash grab that Bell has in mind. After years of debate over television fees was put to rest in 2012, Bell brings back the fee-for-service issue, arguing for payments for local television signals. Payments for local television signals would presumably only exacerbate the cord cutting trends of recent years with increased cable fees for programming that is already being abandoned by many Canadians.
No Bell submission would be complete without a call for website blocking. Bell resurfaces its arguments for the FairPlay site blocking system (even including one of its CRTC submissions as an appendix). In addition to changes to support site blocking within the Telecommunications Act, Bell wants an expansive new criminal prohibition in the Broadcast Act that would make it a criminal offence to knowingly “operate, advertise, supply or sell or offer to sell access to a distribution undertaking that retransmits broadcasting without lawful authorization from a programming undertaking.” In other words, Bell is calling for widespread criminalization of anyone even tangentially associated with unauthorized online video streaming.
Bell also wants its privacy obligations under the Telecommunications Act eliminated. It argues that the Privacy Commissioner of Canada has applied a lower standard to companies such as Google, Facebook, Apple, and Amazon than it has to Canadian telecommunications companies. Bell’s claim rests on requirements that it obtain express consent for its consumer surveillance program (referred to as a relevant advertising program), whereas it argues that other companies do not face the same requirement. It describes this as an “Internet platform privacy gap” and it wants the same standard applied to all (how eliminating the CRTC’s role over privacy would achieve this is not explained).
While Bell is all-in on regulation for broadcast competitors, it adopts the reverse approach in telecom, where it urges the BTLR to lighten its regulatory burden. To support its position, Bell unsurprisingly spends considerable time trotting out largely discredited arguments about the competitiveness of the Canadian wireless market (“over the course of three decades, it has been repeatedly determined that the wireless market is competitive.”) There are the cherry-picked data points, but few answers for the consistent global comparisons that point to Canada as one of the world’s most expensive wireless markets.
Indeed, on the question of competition, Bell argues “there is consensus among the Commission, the Competition Bureau, and the Government in support of that [facilities-based competition] policy.” Obviously, the submission pre-dates more recent developments that suggest the consensus is shifting in the opposite direction with the government’s proposed policy direction and the CRTC’s new position on MVNO’s both pointing to support for a policy objective that supports all forms of competition.
Rather than regulation in support of greater competition, Bell provides the panel with a prescription for reduced or eliminated regulation wherever possible. In fact, even the provisions that support net neutrality (Bell otherwise ignores the issue) would be lightened with a reversal of where the onus lies on proving wrongdoing and a weakening of Section 36 to facilitate website blocking.
The net effect of the 167 page submission is self-serving in the extreme: higher wireless and entertainment costs for consumers, competitive advantages for Bell, the risk of a trade war with the United States, harms to net neutrality, and an extensive regulatory system aimed at Bell’s competitors. Even in an era where one expects companies to argue in their self-interest, the Bell submission is shocking in the risks it posses to virtually all stakeholders in the Canadian communications world.