Uncertainty by Nicu Buculei https://flic.kr/p/923r8Z (CC BY-SA 2.0)

Uncertainty by Nicu Buculei https://flic.kr/p/923r8Z (CC BY-SA 2.0)

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The Broadcasting Act Blunder, Day 13: The “Regulate Everything” Approach – Targeting Individual Services

Several Broadcasting Act blunder posts have focused on the extensive regulatory requirements for Internet services in Bill C-10, including registration requirements, regulations, and conditions of operation all subject to penalties for failure to comply. While the CRTC will be tasked with establishing the specifics, the bill is notable in that it grants the Commission the power to target individual services or companies with unique or individualized requirements. In other words, rather than establishing a “level playing field” (itself a fiction), Canadian Heritage Minister Steven Guilbeault is opening the door to multiple fields with individual companies potentially each facing their own specific requirements and conditions to operate in Canada.

The source of this targeted approach is Section 9.1 (2), which provides:

(2) An order made under this section may be made applicable to all persons carrying on broadcasting undertakings, to all persons carrying on broadcasting undertakings of any class established by the Commission in the order or to a particular person carrying on a broadcasting undertaking.

In fact, as will be discussed in an upcoming post, the same approach can be taken with respect to mandated payments.

The regulatory ability to single out individual services for specific conditions (as opposed to common rules for all) creates significant regulatory uncertainty, invites the possibility of a trade challenge, could spark allegations of unfair treatment, and will raise further doubts for potential entrants into the Canadian market. The government claims that consumer choice will not be affected by Bill C-10, but the likely repercussions of its legislative proposal strongly suggest otherwise.

(prior posts in the Broadcasting Act Blunder series include Day 1: Why there is no Canadian Content Crisis, Day 2: What the Government Doesn’t Say About Creating a “Level Playing Field”, Day 3: Minister Guilbeault Says Bill C-10 Contains Economic Thresholds That Limit Internet Regulation. It Doesn’t, Day 4: Why Many News Sites are Captured by Bill C-10), Day 5: Narrow Exclusion of User Generated Content Services, Day 6: The Beginning of the End of Canadian Broadcast Ownership and Control Requirements, Day 7: Beware Bill C-10’s Unintended Consequences, Day 8: The Unnecessary Discoverability Requirements, Day 9: Why Use Cross-Subsidies When the Government is Rolling out Tech Tax Policies?, Day 10: Downgrading the Role of Canadians in their Own Programming, Day 11: The “Regulate Everything” Approach – Licence or Registration Required, Broadcast Reform Bill Could Spell the End of Canadian Ownership Requirements, Day 12: The “Regulate Everything” Approach – The CRTC Conditions)

3 Comments

  1. The CRTC currently regulates a couple of dozen companies that control a few hundred broadcasters. There are an estimated 400 million websites in the world. If just 1 in 10,000 of these websites are required to register then the CRTC would have an additional 40,000 entities to regulate.

    Luckily for the CRTC the vast majority of those websites will never register because they’ve never heard of the CRTC or Bill C10. The CRTC will then have to decide what it wants to do. Will it grant blanket exceptions, pretend the lack of registration isn’t an issue or will it pursue the websites?

    If the CRTC follows the first two options then that defeats the purpose of the legislation. If it pursues the websites it will likely fail. The costs will be substantial, obtaining compliance will be difficult (good luck collecting any fines it imposes), and many website owners will assume the requirement to provide confidential information and pay fees is just another internet scam.

    The only other option the CRTC could follow is to set up a Canada firewall by ordering ISPs to block websites that fail to register.

  2. Pingback: ● NEWS ● #MichaelGeist #BroadcastingAct #canada ☞ The Broadcasting … | Dr. Roy Schestowitz (罗伊)

  3. From the beginning, this post misunderstands and mischaracterizes Bill C-10. There are no regulatory requirements for Internet services in Bill C-10: no registration requirements, no regulations and no conditions of operation. The proposed legislation gives powers to implement all of these things to the CRTC, but how the Commission will exercise those powers remains to be seen.

    The proposed legislation gives the power to the CRTC to establish a registration regime for Internet services and the regime would oblige the Commission to regulate them in a way that is equitable in regard to existing licensed services. Since licensed services are presently regulated, in part, by means of requirements tailored to their specific situation, Bill C-10 envisages the possibility of a similar kind of regulatory regime for online undertakings – part common requirements, part specially tailored requirements. But the proposed legislation leaves to the CRTC the discretion to determine the nature of any such regime. Perhaps, in five or ten years, specific requirements will be abandoned for both licensed and registered broadcasting undertakings. But, up to now, specific conditions of license have proved to be the most effective way to regulate the major broadcasting players. This approach would create no more “regulatory uncertainty” for the major online undertakings than it does for existing broadcasting licensees. There will be no “trade challenge” by the Biden administration, and no more whining about “unfair treatment” than there is now (which is to say relatively little).

    As far as the mechanics of the registration itself are concerned, the Quebec government presently requires all digital services over a specific revenue threshold to register for the Québec sales tax (QST/TVQ). As of December 7th, there were 766 registrants including all of the major players such as Amazon, Netflix and Twitter. If Bill C-10 passes, the CRTC will exempt the vast majority of Internet services and concentrate on the major online programming services. As the proposed legislation now reads, all social media would be excluded from the CRTC’s purview, but hopefully this will be modified to give the Commission greater scope to regulate revenue-generating social media such as YouTube, which do not necessarily share the revenues they generate with creators.

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