Russell Building by Justin Ladia (CC BY 2.0) https://flic.kr/p/a9iBHb

Russell Building by Justin Ladia (CC BY 2.0) https://flic.kr/p/a9iBHb

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Cultural Uncertainty: A Closer Look at Heritage Minister Steven Guilbeault’s Timeline For Internet Regulation

Canadian Heritage Minister Steven Guilbeault has told the Wire Report (sub req) that he expects Bill C-10, his Internet regulation bill, to pass through the House and Senate by early 2021 and for the CRTC to establish the regulatory specifics within nine months so that the system is in place by the end of next year. Guilbeault says that he isn’t concerned that the process could drag out for years and create significant industry uncertainty, indicating that “I think this is a really high profile issue. I’m not sure that these companies want to bear the public scrutiny of…trying to delay and delay the implementation of this.”

I’ve argued that the policy is likely to take years to unfold and that the uncertainty could result in reduced investment in the Canadian cultural sector in the short-to-medium term. But perhaps Guilbeault is right and the bill will sail through the House and the Senate with few hearings or study with the government not wanting much public scrutiny and the cabinet will have its order-in-council ready to go. The CRTC will be waiting for the green light and rush out a consultation document on mandated payments, discoverability requirements, and which services are exempt, hold hearings, and issue a decision all in nine months. Meanwhile, the Internet streaming companies, supportive of the Minister’s “get money from web giants” legislative priority, his references to “immoral” conduct, and the benefits of regulator audits and mandated disclosure of confidential information, welcome the CRTC decision. They simply ask where to send the cheque and work to quickly de-emphasize the content in which they’ve invested billions to their subscribers by instead promoting Canadian content as mandated by the CRTC.

Or maybe with 21 days left in the House of Commons calendar in 2020 in the midst of a second wave of the global pandemic and with the Standing Committee on Canadian Heritage studying the impact of COVID on its sector, the bill takes at least until at least early 2021 to work its way through the House of Commons process where the committee recognizes that public participation is not delay. The Senate Standing Committee on Transport and Communications decides that the first major reform to the Broadcasting Act in years merits some further study. Even if there are few changes, the bill gets through the Parliamentary process before the summer break. It likely takes another month or two for the order-in-council to process, so the CRTC is seized of the issue by mid-summer.

It quickly issues a consultation paper on all the various questions and issues by the end of the summer, responses are received in October, and a hearing takes place in December. The CRTC issues its first decision in April 2022 with an implementation plan for the policies to take effect within six months. The decision may also trigger additional hearings as some of the issues will require additional information and consultation. If that happens, add at least another six months to the process with a start date in 2023. If not, perhaps a streamer service – say a U.S. based one concerned about potential USMCA violations – files an appeal in the Federal Court of Appeal. That case isn’t heard until 2023 and decided until early 2024. Once the decision is rendered, one side seeks leave to appeal to the Supreme Court, leave is granted, and there is a hearing in 2024 and a decision from the court in early 2025. That decision could require the CRTC to revisit its decision and the whole process starts anew.

This longer version may not happen. There are many examples of processes that run less than a year. However, there are also cases like the CRTC’s decision on simultaneous substitution and the Super Bowl, which took years to unfold with long hearings and court appeals. For all stakeholders – whether the Internet streamers, broadcasters, producers or consumers – the bill marks a period of some uncertainty that is likely to have some ramifications on investment decisions. That isn’t a reason not to proceed, but recognizing that legislative and policy participation is not delay and setting more realistic expectations on timing is essential.

4 Comments

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  2. I think it’s the government that doesn’t want public scrutiny of this issue which is why it was introduced right before the US election.

    Also who knows what delays will happen once Netflix, Disney, Amazon et al start lobbying the US government to put pressure on Canada to drop this policy. These companies could also appeal to the masses by producing pieces for 60 Minutes, Dateline, etc that are critical of Canada and these regulations.

    Developing the regulations will be time consuming as the CRTC will have to deal with services like Apple and Amazon that have bundled fees, offer movie rental and purchases along with a video streaming service, and subscriptions to other video streaming services. It will have to decide if exemptions will be based on revenue, subscription base, content and other factors.

    Obtaining information from these companies will face many hurdles and roadblocks. The companies will argue some of the information is outside the scope of CRTC regulation, subject to foreign privacy laws, or does not exist for the legal entity the CRTC has requested the information from. Cases could also be filed in US courts arguing the CRTC has no jurisdiction over American companies.

  3. Pingback: News of the Week; November 11, 2020 – Communications Law at Allard Hall

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