As the Standing Committee on Canadian Heritage continues its study on Bill C-10, it has also received some notable submissions from organizations and experts that raise further questions about the wisdom of the bill. One submission not yet posted (but provided to me with the consent to post) comes from Philip Palmer, former Senior General Counsel with the Department of Justice focused on communications law. Palmer spent decades in government focused on telecommunications and competition law issues. His expert opinion is that Bill C-10 is unconstitutional since on-demand streaming services such as Netflix are not inter-provincial undertakings and therefore are not subject to the federal government’s jurisdiction over broadcasters.
Palmer’s submission emphasizes that the technical differences between broadcasters and online streaming services matter when it comes to constitutional jurisdiction. His argument echoes a point I made before the committee last month, when I noted that notwithstanding claims conventional broadcasters and Internet services are all part of the same “system”, they are not:
What this seeks to do – and I think we’ve seen this even in a couple of comments that my fellow panellists have made- is to claim that this is all one system, that the Internet is the same system as broadcast or television and radio, and that we can have the same rules apply. The problem is that it isn’t. The long-standing policies we’ve had in broadcasting, for the long-standing broadcaster, have been premised on scarcity of spectrum, the privilege of having those licences and the requirement to give back.
Palmer takes this issue and assesses the constitutional implications. The entire submission is worth reading, but two points are critical. First, online streaming is not broadcasting:
Two aspects of online, on demand streaming distinguish it from broadcasting, as it is legally understood. First, subscribers are free to select what programs they want to watch or listen to, and when they will enjoy it. The subscribers act as their own programming curators: they control the content they receive and its scheduling. This is a much greater freedom than to switch among a limited number of licensed broadcasting channels that provide fixed menus.
Second, the content streamer does not choose or control the communications path between itself and its subscribers. The selected content is transmitted by telecommunications carriers over their facilities by means of digital packets that are disaggregated during transmission and then reassembled at the recipient’s end. Telecommunications carriers transmit the chosen content across provincial and international boundaries to the program consumer. There is no ‘dedicated channel’ – physical or otherwise – between the streamer and the end-user. Indeed, if a million people are watching the same program from the same streamer at the same time, there will be a million discrete streams, each one controlled by the user who may pause, rewind or terminate the transmission at will.
Why is this relevant? Palmer argues that it means federal jurisdiction doesn’t touch streaming services:
Online streaming services, whether domestic or foreign, do not rely on over-the-air radio signals: they do not transmit by radio (no frequency scarcity concerns apply) and they do not control how their programming reaches consumers. As we have noted above, streaming services are delivered to the public through telecommunications carriers. This distinction is critical to any analysis of the constitutionality of Bill C-10.
As we have seen, Parliament’s authority over broadcasting derives from paragraph 92(10)(a) of the Constitution Act and is factually based on the use of radio waves to carry broadcast programming to listeners and viewers. The courts determined that cable television is an extension of over-the-air broadcasting. All of which was based on the notion that radio waves crossed provincial and international boundaries.
Streaming services do not use assigned radio frequencies to reach their audience. Hence, they are not, themselves, interprovincial undertakings. For the delivery of content, online streaming services depend on telecommunications carriers to transport programming across provincial and international boundaries. The mere fact of relying on telecommunications to conduct one’s business is not enough to bring an enterprise within federal legislative authority. Netflix and Spotify are not broadcasters: they are, respectively, a digital video store and digital jukebox. Federal legislation has never reached to the regulation of video stores or jukeboxes – or cinemas for that matter. How can the mere fact of digital transmission change the fundamental nature of the underlying undertaking?
The implications of this argument are very significant since it suggests that even if Bill C-10 makes it through the Parliamentary process, a constitutional challenge is a distinct possibility. This is particularly true given the encroachment on provincial jurisdiction. For example, Quebec has a long history of taking issue with federal involvement in broadcasting, putting a potential challenge in play. Indeed, it is odd to see this legislation viewed as a political winner in Quebec, when it effectively asserts federal jurisdiction over an area that has long been contested in the province.
Noting the lengthy CRTC hearing periods, I told the committee that the bill won’t provide new revenues for film and television production until the second half of the decade at the earliest. If a constitutional challenge is added to the mix, the timeline grows even longer. The bill has faced a rough ride at committee and the Palmer submission should give the committee further pause about the wisdom of moving forward without a significant overhaul.
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I’d argue: How does Video On demand services not compare to streaming? Consuming them is the same.
When subscribers “stream” video “TV content” using cellular data plans which use frequencies that used to be broadcast TV “channels” how is that so far different either?
ISPs are cable companies (telecoms) who, in Canada, bought the TV stations that they no longer wish to broadcast FREE. Those telecoms use their former OTA broadcast channels for their subscribers to watch TV over IP using “wireless” data subscriptions.
Philip Palmer may have spent decades in government focused on telecommunications and competition law issues, but he seems to be out of his depth with regard to broadcasting law issues. His arguments may give pleasure to those like Michael Geist who believe in Internet exceptionalism, but otherwise they do not hold up.
Bill C-10 does not say that the Internet, or online streaming, is broadcasting, or that the Internet is “the same system” as broadcasting. It simply confirms what the existing Act has already determined – online VOD services such as Netflix, Amazon Prime and Disney+ are broadcasting programming undertakings and therefore subject to the Broadcasting Act. This flows from the definition of broadcasting which means any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication…
Nowhere in the Broadcasting Act is it said that broadcasting issues are “premised” on spectrum scarcity. The Broadcasting Act is a cultural instrument designed to provide a public service essential to the maintenance and enhancement of national identity and cultural sovereignty for Canadians.
Whether “subscribers are free to select what programs they want to watch or listen to, and when they will enjoy it” is immaterial to a finding of broadcasting. That description may rule out traditional television broadcasting, but it does not exclude video-on-demand (VOD) broadcasting programming undertakings which the CRTC has been regulating since 1994. With Canadian VOD broadcasting, subscribers are free to select what programs they want to watch or listen to, and when they will enjoy it.
Likewise, there is no ‘dedicated channel’ – physical or otherwise – between the operator and the end-user of either a licensed VOD broadcasting undertaking or an unlicensed hybrid undertaking (which is exempted from licensing requirements under specific conditions). Nor does the operator or the end-user of a VOD undertaking necessarily choose or control the communications path between the undertaking and its subscribers. Broadcasting services are sometimes delivered to the public by means of telecommunications carriers just as are online services, some of which are in fact broadcasting services.
With regard to the Radio Reference of 1932, it is clear that the Court (i.e. the Judicial Committee of the Privy Council) considered a broadcasting undertaking as an undertaking “connecting the Province with other Provinces and extending beyond the limits of the Province,” and that the original meaning of the word telegraph is: “An apparatus for transmitting messages to a distance, usually by signs of some kind.” Online programming undertakings therefore fall within the meaning of “broadcasting”.
Consequently, there is no real possibility of a constitutional challenge on any of the grounds identified by Michael Geist or Philip Palmer. Sure, Bill C-10 should be amended, say along the lines proposed by the Coalition for the Diversity of Cultural Expressions (CDCE) and its constituent organizations. But the baby need not be thrown out with the bath water.
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I really like the argument set forth between subscribers and streamers. These two things should be treated differently although similar they are not the same. From, Fresno Landscaping