The Internet is the Problem by Alex Pang (CC BY-NC-SA 2.0) https://flic.kr/p/dvKhNb

The Internet is the Problem by Alex Pang (CC BY-NC-SA 2.0) https://flic.kr/p/dvKhNb

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The CRTC Knows Best: Panel Report Recommends Costly Overhaul of Canadian Communications Law to Regulate Internet Sites and Services Worldwide

The Broadcast and Telecommunications Legislative Review Panel released its much anticipated report yesterday with a vision of a highly regulated Internet in which an expanded CRTC (or a renamed Canadian Communications Commission) would aggressively assert its jurisdictional power over Internet sites and services worldwide with the power to levy massive penalties for failure to comply with its regulatory edicts. The recommendations should be rejected by Innovation, Science and Industry Minister Navdeep Bains and Canadian Heritage Minister Steven Guilbeault as both unnecessary to support a thriving cultural sector and inconsistent with a government committed to innovation and freedom of expression.

The report is at its strongest when dealing with issues related to access to the Internet, consumer rights, net neutrality, and enhancing public participation in communications regulation. On those fronts, the government would do well to consider implementing many valuable recommendations that would increase competitiveness and lead to more inclusive regulatory hearings. Moreover, the wise decision to reject a levy or tax on Internet access services will allow those who feared increased Internet and wireless costs to breath a sigh of relief.

Yet the strengths of the telecommunications and consumer rights portions of the report are overshadowed by a stunning set of recommendations related to Internet content, some of which are unlikely to survive constitutional scrutiny, likely violate Canada’s emerging trade commitments, and rest of shaky policy grounds. If enacted, the Canadian Internet would be virtually unrecognizable with the CRTC empowered to licence or require registration from a myriad of Internet services, mandate what Canadians see on those services, and intervene in commercial negotiations. The 235 page report will require several posts to address all of its aspects and implications (including notable CBC and copyright reforms), but this post seeks to set out its broad-based content regulatory vision and make the case that the panel’s plan should be firmly rejected by the government.

The foundation of the content section of the report is the decision to regulate all media content, which includes audio, audiovisual, and news content delivered by telecom. In doing so, the report envisions unprecedented government and regulatory intervention into the delivery of news services. It argues that there are three types of services that provide this content that require regulation where they access the Canadian market:

  • Curators – services that disseminate media content with editorial control (broadcasters and streaming services such as Netflix, Spotify, and Amazon Prime)
  • Aggregators – cable companies, news aggregators such as Yahoo News
  • Platforms for Sharing – services that allow users to share amateur and professional content such as YouTube, Facebook and other platforms

The panel recommends that all of these kinds of companies be regulated (either by way of licence or registration), be required to contribute to Canadian content through spending percentages or levies, and comply with CRTC regulations on discoverability that would include regulatory rules on how prominently Canadian content is displayed within the service. The CRTC would be empowered to decide whether to exempt services from regulation with the power to levy huge penalties for failure to comply with its decisions (described as “high enough to create a deterrent foreign undertakings”).

Services would also be required to disclose consumption data to the CRTC, so that the regulator would know what Canadians are watching or reading online. The regulator would be entitled to establish binding codes of conduct that cover resolution mechanisms, transparency, privacy and accessibility. It would also govern the commercial relationship between services and content producers, with the panel noting “it is essential that the CRTC be given the explicit jurisdiction to regulate the economic relationships between media content undertakings and content producers, as well as between media content undertakings.”

The regulatory power over news aggregators would be even greater. The panel recommends that the CRTC impose requirements on media aggregators as it would determine which Canadian news sites are trusted, require links to those sites, and include rules ensure that those links are prominently displayed. Moreover, the CRTC would be entitled to regulate the economic relationship between news producers and Internet platforms. The panel argues:

A very small number of dominant social media platforms are a critical source of audiences for news media organizations. As a result of the imbalance in bargaining power, news content creators are unable to individually negotiate terms over the use of their content by social media platforms. The CRTC should also have the jurisdiction to determine or approve terms of trade where it considers that this is necessary to address an imbalance of power in news content. These terms could include much more than the ambit of the rights granted or the basis for compensation. They could also include requirements to make audience data available to content producers.

The report also ventures into numerous other areas: regulation of artificial intelligence and big data, privacy, digital sales tax, recommendations for legislation to hold digital providers liable for harmful content on their sites, and future regulation that may encompass what is displayed or available in app stores, operating systems, and devices. Indeed, the report states:

In addition, app stores and devices, along with the operating systems, application programming interfaces and preloaded applications, play an essential role in determining what content or services are accessed on the Internet. As such, they can significantly influence the discoverability of Canadian content. Some content and service providers are now selling devices that can prefer their own affiliated media content services. For example, early announcements regarding HomePod speakers seemed to imply that they will only give users access to Apple Music and iTunes and not to competing online music services, such as Spotify. In this context – to the extent that undertakings curate (as a primary purpose), aggregate, or enable the sharing of audio or audiovisual content, or alphanumeric news content – they should be subject to discoverability requirements.

The panel’s vision is to create a Canadian regulatory framework that knows no physical boundaries – the CRTC empowered to apply its power to any site or service anywhere in the world used by Canadians – and with few limitations as the regulator would dive deeply into mandated payments, what content is displayed, what news can be trusted, and what Canadians view or download. Yet for such sweeping change, the report rests on remarkably thin arguments and evidence.

Some of the data is simply inaccurate or misleading. For example, the panel claims that Netflix generates $1.6 billion in revenue annually in Canada, when the company reported that the actual number is roughly half that amount. The panel also trumpets that it is not recommending a Netflix tax. That statement predictably led to media coverage claiming there is no Netflix tax recommendation, but with the licensing regime that would include a mandated requirement to spend a percentage of revenues on Canadian content, that clearly represents a “Netflix tax” as the term is widely understood.

The basis for the most sweeping reforms are framed as a matter of cultural sovereignty, with the panel arguing for the need for Canada “to continue to assert its cultural sovereignty and Canadians can continue to express their identity and culture through content.” However, at yesterday’s press conference, both chair Janet Yale and panelist Monique Simard instead emphasized the need to support Canadian jobs when asked to reconcile the industry data that confirms record amounts of film and television production in Canada.

Alternatively, the panel argues that it is simply a matter of those that benefit from the “system”, must contribute to it. But as I argued earlier this week, broadcasters and broadcast distributors enjoy a wide range of regulatory benefits in the system and their contributions are essentially a regulatory quid pro quo. The Internet services are not part of this system. We do not condition access to the Canadian market as requiring mandated contributions – no one speaks of a “clothing system” or “toy system” or “sports system” – but the panel believes that for the Internet simply having some Canadian users requires sites and services worldwide to pay into Canada’s culture system.

In fact, the panel acknowledges that “Canadians create and consume more types of content than ever before.” So this isn’t about creating Canadian content. Rather, it is about certain professions creating content and imposing a massive regulatory infrastructure in order to support that policy goal. As I argued earlier this week, the problem with this approach is that ticking the right boxes that ensure Canadians represent “key creative personnel” has nothing to do with Canadian cultural sovereignty, much less ensuring access to Canadian stories. Yet while the panel emphasizes “the importance of story”, when confronted with the question of whether current Canadian content rules achieve that objective, it states “it is time to review the model for supporting Canadian content, but not the definition of Canadian content.” In other words, it is prepared to overhaul the regulatory rules for creating and delivering Canadian content, but not even consider the rules that determine what qualifies as Canadian content.

The panel’s case for why it should regulate news services and platforms is similarly thin. It boldly states that “the CRTC must be able to monitor and address issues concerning news content made available by means of telecommunications, regardless of format. This would include online versions of newspapers.” But why those platforms? The panel states:

Advertisers now view these online companies effectively as media companies that directly compete for their advertising dollars. That is why Internet platform providers should be brought under the Broadcasting Act to the extent that they enable the dissemination or sharing of audio or audiovisual content, or alphanumeric news content.

That’s it? A constitutionally questionable foray into regulating news because advertisers view online companies as media companies?  Surely a stronger justification is needed now (and an even stronger case will be needed to address the inevitable constitutional challenge should the government follow this recommendation).

The panel not only ignores the constitutionality of widespread speech regulation, but it is also sidesteps Canada’s trade commitments. On the same day that the panel released its report, the government tabled Bill C-4, the bill to implement the Canada-U.S.-Mexico Trade Agreement. Article 19.17 of the agreement prohibits parties from adopting measures that would hold Internet services liable for harms that arise from content posted by their users. Nevertheless, the panel recommends legislation to create liability for Internet services from the harms that arise from content posted by their users.

If the legal concerns were not enough, the panel fancifully maintains that all of this regulation will come at no cost to Canadian consumers as if no one has to pay for massive new regulations, licensing, payments, reporting requirements, and commercial intervention by the CRTC. Such a scheme may result in millions for some creators, but there should be no doubt that the costs will be borne by individual Canadians, who will face increased subscription costs, reduced competition as some services avoid the highly regulated Canadian market, and fewer content choices.

My column this week anticipating the panel concluded with the following:

Should the government regulate those providers and creators, it will be engaging in perhaps the most extensive speech regulation Canada has ever seen on the demonstrably false premise that doing so will level the playing field, support Canadian stories, or save a production sector that is thriving in the internet age.

While the panel report does a nice job of addressing telecom and consumer issues, its vision of speech, content and news regulation is far worse than anticipated. Those recommendations should be soundly and unequivocally rejected as at odds with industry data, harmful to the affordability of Internet-based services, and inconsistent with Canadian fundamental rights and freedoms.

19 Comments

  1. Pingback: Heritage minister praises ‘tremendous’ broadcasting report as business urges him to ignore it – Okay Newsroom

  2. Pingback: Heritage minister praises ‘tremendous’ broadcasting report as business urges him to ignore it – Seen In Search

  3. With the incredible advancements available in G5 networks, other countries are working on G6 and G7. Behind this is the rapid shift to 4nm chips and hard drives. Which need the advanced technology in transmission to be of any use. It is a good thing to put the CRTC to work.

    Our G5 networks (bell media mostly) is hard-wired into our IP providers hence you emails and habits.

  4. Pingback: Le rapport Yale (2020) | Mon carnet uquterrestre de premier cycle en CS

  5. michael higgins says:

    Okay, so when to we move to dissolve the CRTC all over again?

    This is overreach and along with other dictatorial moves -are moving us towards a less free Canada.

  6. The usual bull crap from Geist. As citizens, we refuse to allow technology to enact the right-wing libertarian dream (of Geist and his ilk) of a world without laws or regulations, run by monster corporations under the cover of “freedom of expression” etc. Google, YouTube etc. are the antithesis of free expression; they use the veneer of libertarian “free expression” to advance a corporate, homogenizing global agenda in which your “freedom of expression” is their profit and means to control civil society.

    • “. As citizens, we refuse to allow technology to enact the right-wing libertarian dream (of Geist and his ilk) of a world without laws or regulations, run by monster corporations under the cover of “freedom of expression” etc. Google, YouTube etc. are the antithesis of free expression; they use the veneer of libertarian “free expression” to advance a corporate, homogenizing global agenda in which your “freedom of expression” is their profit and means to control civil society.”

      Thanks for that comedy of non-sequiturs, I needed a laugh.

      So over-regulation by the government that will favour corrupt Canadian corporations like Bell Canada is preferable to foreign corporations? Government and their favoured corporations must control civil society so they can’t? Let’s fight corporate data collection with more data collection? George, you are a pure ideologue. Every one of your comments just laces together buzzwords into a stupor, trying to fear mongering people. All you do is create this binary dichotomy where either I allow Google (who you always single out despite the myriad of other companies) to do whatever it wants, or I accept this clearly overreaching bullcrap lest I be perceived as “right-wing” and “libertarian”.

      I’m going to continue to assume you’re just a Bell Canada shill who parrots these parody viewpoints, because it’s the most generous interpretation.

      • I’ve said it before and I say i again. I hate Bell Canada. All I could do was pull my phone and internet account from them and transfer it to some other corporate monster. It’s not Bell Canada that regulates the internet. Its sovereign nations, and doing away with sovereign nations is the dream of Zuckerberg (there’s a “new” name for you, Mr E. Lindros) et al. To better pillage the populace. A world without taxes (Bell is in favour of taxes??), regulations (Bell is in favour of regulations??) and sovereign cultural policies – right up to a world without free agents, just users and consumers of the corporate products and services marketed to them withour restriction or regulation, so they can advance their “freedom of expression.” Sheep.

        • >s not Bell Canada that regulates the internet. Its sovereign nations, and doing away with sovereign nations is the dream of Zuckerberg (there’s a “new” name for you, Mr E. Lindros) et al. T

          It’s also the dream of several governments right now, who seem to tilt to the left wing of politics. So where you get this “right-wing libertarian” classification is beyond me, considering further the amount of government funding and involvement in Google et al.

          > world without taxes (Bell is in favour of taxes??), regulations (Bell is in favour of regulations??) and sovereign cultural policies – right up to a world without free agents, just users and consumers of the corporate products and services marketed to them withour restriction or regulation, so they can advance their “freedom of expression.”

          Ok, so you completely miss the point then. Bell Canada has competition in the media delivery space and in the media itself. It provides services that compete with Google et al., and has long engaged in regulatory capture of the CRTC, hence the crossover in officials between the CRTC and Bell and various other telecom providers. They are already playing the “Canadian content” game, are already engaged in questionable data collection with government handover, are already involving themselves in the news space, so this new legislation will hurt them far less than any competitors. It’s obvious with a cursory observation that this legislation will favour them and other incumbant services over foreign ones. That’s it. This is the same Bell Canada that has moved gung ho ahead of website blocking.

          > just users and consumers of the corporate products and services marketed to them withour restriction or regulation,

          Like Bell does.

          > Sheep.

          You’re right, it’s better that I trust a government dept with massive conflict of interest given the turnover with telecom corporations, to regulate massive swaths of the internet in a way that has been repeatedly shown to have massive collateral damage and minimal benefit. That’s not sheep-like at all.

          I will say though, I’d invest in stock in VPN companies after this, they’re going to get a boon.

          Also, I really like how you think Google et al. are just operating autonomously from other governments, and that they are in favour of freedom of expression given their move to justify hate speech legislation, etc. I really don’t get your point of view, again it just comes like a non-well thought-out smorgasbord of buzzwords.

          • You know why websites are blocked, don’t you? Because they’re breaking the law. Thankfully, such things as laws still exist. Your Wild West is not here yet.

          • >Tor when used not to camouflage the location and identity of an individual but the location and identity of an illegal site, yes, that should be banned

            And this is why I call you a technical illterate. Pray tell, how exactly would this be enforceable without having fulling registered surveillance and identification on the internet at all times, which would defeat the purpose of Tor altogether? What is the minimal requirement for something to be an “illegal site” in your opinion? Do you have any idea whatsoever of the effect on things outside your scope of copyrighted entertainment media? On software development, on secure protocols, etc. And what’s funny still, you have provided one lick of evidence of how this current internet environment has affected you. All you provide is emotional arguments and fear mongering. I think Google has issues, that’s why I mitigate my software and habits appropriately. I don’t use Facebook, and so on and so forth. So your sheep accusations fall flat. I simply disagree with your conclusion that copyright law should be *extended* to the scope being suggested. It is Orwellian of you to suggest that copyright is *supposed* to be like this when the original intentions do not at all match the reality, which has been manipulated for years by lobbyists and lawyers.

            You’ve mentioned that you are in the “intellectual property” business but stay anonymous without detailing exactly where this is affecting you. So I’m just going to discount your claims of being a notable producer of *Canadian* media until you bother to provide evidence.

        • >You know why websites are blocked, don’t you? Because they’re breaking the law. Thankfully, such things as laws still exist. Your Wild West is not here yet.

          No, they are blocked because judges and technical-illiterates like you don’t understand the repercussions both technically and legally (slippery-slope as shown in the UK), and it just creates an incentive to use VPNs and Tor… then again, you are the same guy who thinks our current situation is a wild west. Copyright maximalism really has an effect on mental patterns it seems. I expect that you will soon say that VPNs and Tor need to be banned too.

          • Tor when used not to camouflage the location and identity of an individual but the location and identity of an illegal site, yes, that should be banned. I have never understood why people take a perfectly sound principle – an individual’s right to privacy online – and extend it to criminal organizations. It’s all of a piece with the right-wing libertarianism you all share. It’s like tobacco advertising being legal in the USA because of their First Amendment (freedom of expression) rights: in this case, muderous capitalism has been granted the “free speech” rights intended for the citizen. And so “Citizens United” etc – the results of which we saw two days ago in the US Senate.

          • And talk about non-sequiturs:

            No, they are blocked because judges and technical-illiterates like you don’t understand the repercussions both technically and legally

            Right, the judge sits there and agrees with techno-illiterates like me and says “Let’s show the world that I don’t understand and am motivated purely by this fact.”

            That’s brilliant reasoning, sites are blocked BECAUSE no one understands the poor misunderstood web pirate, just trying to express himself with stolen property. Pathetic.

          • “copyright maximalism” = “enforcing the law and protecting creators’ rights.

            Truly Orwellian misuse of language.

  7. From his opening sentence, Michael Geist presents an inaccurate and partisan view of the report of the Broadcasting and Telecommunications Legislative Review Panel. Qualifying the review panel’s vision as one of “a highly regulated Internet”, in which the reformed CRTC would “aggressively assert” its power with “massive penalties” and “regulatory edicts”, Michael Geist rejects the panel’s recommendations.

    In fact, the review panel’s report is informative, comprehensive and balanced. There are, of course, some important unanswered questions that flow from the report’s recommendations, but few of these are evident in Geist’s diatribe above.

    For example, the CRTC already has the power to licence “broadcasting undertakings” and the review panel recommends establishing a registration process for non-Canadian digital media activities, much in the same way the Government of Quebec has done to collect its PST from Netflix, Amazon, Apple, Google and Spotify. Contrary to what Geist says, the review panel does not recommend that CRTC be empowered to “mandate what Canadians see on those services”, but only that some portion of their earnings in Canada be spent on reflecting Canadians and Canadian values back to them. The panel does not recommend that the Commission be given the authority to “intervene in commercial negotiations”, but only that the Commission obtain a clear mandate to establish the ground rules for negotiations between unequally empowered media services and content producers – as it has often done in the past. Michael Geist bemoans that “the CRTC would be empowered to decide whether to exempt services from regulation” even though it already has this power and uses it extensively.

    The review panel’s vision is not “to create a Canadian regulatory framework that knows no physical boundaries”. It is to establish a Canadian regulatory framework within Canada. It is true that no one speaks of a “clothing system” or “toy system” or “sports system”, but they do speak of a “broadcasting system” to which, according to the current definition of “broadcasting”, many of the digital audio and audiovisual media on the Internet belong.

    The rules that determine what qualifies as Canadian content have been reviewed over and over again, and the review panel was right to move on to other issues. Michael Geist says that Canadians representing key creative personnel “has nothing to do with Canadian cultural sovereignty”. I beg to differ. The least effective way to certify the huge annual volume of Canadian programs would be to mandate civil servants to rely on subjective, arbitrary, discretionary or qualitative criteria. The existing approach to Canadian program certification is relatively objective because it rests on quantitative measures of Canadian production elements. In a previous post, Michael Geist claimed that “using one of Canada’s best known novelists as the source doesn’t count in the Canadian points system”. In fact, this is wrong. It does count, as long as the principal writer on the team of writers is also Canadian. So no, First Blood, the first installment in the Rambo series does not qualify as Canadian content, even though it was adapted from a novel by a Canadian and shot in British Columbia.

    A free unfettered Internet has not existed for a very long time (see Akash Kapur’s article in the November 2-3, 2019 issue of The Wall Street Journal). Those, like Michael Geist, who advocate Internet exceptionalism and those who believe in subordinating the Broadcasting Act to the objectives of the Telecommunications Act are surely disappointed by the review panel’s proposals.

  8. The Broadcasting Act is a buggy whip in a World of telecommunications.
    It had it’s purpose in the time of radio broadcast technology, yes the time constrained OTA stuff. OTA broadcast that was mortally wounded by the very people who now wish to push the governing act on everything else for their benefit.

    It is time for some new more open legislation that allows freedom and only offers protection for extreme circumstances, when they occur.

    The Broadcast Act should be nothing more than historic library fill.

  9. Hey, if it angers Postmedia, Zuckerberg, and Ezra Levant, it’s fine with me. About time these radicalization vectors got a good deplatforming kick in the pants once and for all. Karl Popper, paradox of tolerance. Look it up.

  10. Pingback: News of the Week; February 5, 2020 – Communications Law at Allard Hall

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