Canadian Heritage Minister Pablo Rodriguez introduced the much-anticipated sequel to Bill C-10 yesterday. The minister and his department insisted that the new Bill C-11 addressed the concerns raised with Bill C-10 and that Canadians could be assured that regulating user generated content is off the table. Unfortunately, that simply isn’t the case. The new bill, now billed the Online Streaming Act, restores one exception but adds a new one, leaving the door open for CRTC regulation. Indeed, for all the talk that user generated content is out, the truth is that everything from podcasts to TikTok videos fit neatly into the new exception that gives the CRTC the power to regulate such content as a “program”.
To be fair, the government has tried to assuage some concerns. For example, the CRTC won’t regulate specific algorithms as part of its discoverability orders and the bill emphasizes the importance of freedom of expression. However, by leaving much of the original regulatory framework in place and removing some earlier safeguards, the CRTC has been granted enormous regulatory power over Internet services around the world given that the bill’s jurisdictional scope features few boundaries.
Three issues in Bill C-11 immediately stand out. First, the question of regulating user generated content, referred to in the bill as content uploaded to a social media service. Canadians will recall that Bill C-10 originally excluded regulating individual users as broadcasters (section 2.1) and their content as programs (section 4.1). The government removed the content exception last April, meaning that while users would not be regulated like broadcasters, their content could be treated as a “program” subject to CRTC regulation. These regulations included discoverability requirements that would allow the CRTC to require platforms to prioritize certain content (and effectively de-prioritize other content).
So how does Bill C-11 address the issue? As a start, the section 4.1 exception for treating user content as programs subject to potential regulation has been restored. When combined with the return of section 2.1 exempting users from being treated as broadcasters, the government is now claiming that it “listened, especially to the concerns around social media, and we’ve fixed it.” But dig a little deeper and it turns out that the bill is not quite as advertised. While Section 4.1 was restored, the government has added 4.1 (2), which creates an exception to the exception. That exception to the exception – in effect a rule that does allow for regulation of content uploaded to a social media service – says that the Act applies to programs as prescribed by regulations that may be created by the CRTC.
The bill continues with a new Section 4.2, which gives the CRTC the instructions for creating those regulations. The result is a legislative pretzel, where the government twists itself around trying to regulate certain content. In particular, it says the CRTC can create regulations that treat content uploaded to social media services as programs by considering three factors:
- whether the program that is uploaded to a social media service directly or indirectly generates revenue
- if the program has been broadcast by a broadcast undertaking that is either licensed or registered with the CRTC
- if the program has been assigned a unique identifier under an international standards system
The law does not tell the CRTC how to weigh these factors. Moreover, there is a further exclusion for content in which neither the user nor the copyright owner receives revenue as well as for visual images only.
All of this may seem complicated, but the bottom line is the CRTC is empowered to create regulations to treat content uploaded to social media services as programs with three criteria to consider (Rodriguez described it as a “sandbox”) and content that is only comprised of images or generates no revenue is excluded. That means non-commercial user generated content is out, but the government clearly has a particular issue in mind, namely music on Youtube. Indeed, Rodriguez specifically cited the example of treating a song on Spotify and the same song uploaded to Youtube in an equivalent manner.
The problem is that the government has not limited Bill C-11 to that individual use case. Instead, the three criteria can be applied broadly to many other issues. For example, TikTok videos are uploaded to the service and may generate indirect revenue, the content is available on licensed or registered services, and the music likely has a unique identifier. The same is true for podcasts, which can generate revenue, are often available on registered platforms, and may feature an identifier. Given the broad scope, any podcast platform could be caught by the rules and the individual podcasts would be treated as “programs” under CRTC regulation.
What can the CRTC do from a regulatory perspective to these programs? The two major powers – both holdovers from Bill C-10 – require platforms to make contributions to be determined (likely financial payments) and to enhance the discoverability of Canadian content. On the discoverability front, the bill makes it clear that the CRTC should ensure that any orders are “consistent with freedom of expression enjoyed by users of social media services” (Section 10.1) and it shall not make an order “that would require the use of a specific computer algorithm or source code” (Section 9.1(8)). Left open to the CRTC, however, is the ability to require platforms to prioritize some content over others, whether that is a particular podcast, music genre, or video content. Similarly, the Commission may not tell the platform specifically how to adjust the algorithm but that is a distinction without a difference since it can issue orders on the end result as it is presented to subscribers or users.
In fact, Bill C-11 actually expands the CRTC’s powers over user generated content and online undertakings in another important way when compared with Bill C-10. As Bill C-10 made its way through the legislative process, new provisions were added to limit the scope of CRTC orders and regulations over online undertakings and user generated content (Sections 9(3.1) and 10(4)). Those limits have been removed from Bill C-11, which once again opens the door to a far more aggressive CRTC regulatory approach. This includes the prospect of CRTC standard setting as it advances its new media regulation agenda.
Views on the scope of this regulatory approach may vary, but it is undeniable that: (1) regulating content uploaded to social media services through the discoverability requirement is still very much alive for some user generated content; (2) the regulations extend far beyond just music on Youtube; (3) some of the safeguards in Bill C-10 have been removed; and (4) the CRTC is left more powerful than ever with respect to Internet regulation.
Second, in addition to the continued regulation of some Internet content as programs under CRTC rules, the remarkable scope of the bill also remains unchanged. Readers may recall an internal government memo that identified a wide range of targets for Bill C-10 regulation. In fact, the memo noted that bill could cover podcast apps such as Stitcher and Pocket Casts, audiobook services such as Audible, home workout apps, adult websites, sports streaming services such as MLB.TV and DAZN, niche video services such as Britbox, and even news sites such as the BBC and CPAC. The potential scope for regulation is virtually limitless since any audio-visual service anywhere with Canadian subscribers or users is caught by the rules. Bill C-11 maintains the same approach with no specific thresholds or guidance. In other words, the entire audio-visual world is fair game and it will be up to the CRTC to decide whether to exempt some services from regulation.
Third, the uncertainty found in Bill C-10 is also largely unchanged. Bill C-11 tries to include some criteria for defining key provisions such as the user-generated content exception and what constitutes a Canadian creator, but ultimately there’s still no easy way to identify Canadian creators when it comes to user generated content, podcasts, or other similar content. Some key terms such as ‘social media’ are widely used in the bill but not defined at all. Simply put, no one knows how these companies will comply, much less how users will be identified as Canadian for the purposes of the law. The benefits themselves are also uncertain since the CRTC is left to determine many of the requirements in processes that may take years to complete.
There was an opportunity to use the re-introduction of the bill to fully exclude user generated content (no other country in the world regulates content this way), limit the scope of the bill to a manageable size, and create more certainty and guidance for the CRTC. Instead, the government has left the prospect of treating Internet content as programs subject to regulation in place, envisioned the entire globe as subject to Canadian broadcast jurisdiction, increased the power of the regulator, and done little to answer many of the previously unanswered questions. The bill is not ready for prime time and still requires extensive review and further reform to get it right.