CBC Swag by appaIoosa (CC BY-NC-ND 2.0) https://flic.kr/p/2mHGUXQ

CBC Swag by appaIoosa (CC BY-NC-ND 2.0) https://flic.kr/p/2mHGUXQ

News

Why the Online News Act is a Bad Solution to a Real Problem, Part Six: CBC Eligibility Harms News Competition and Its Public Interest Mandate

The blog series on why Bill C-18, the Online News Act, is a bad solution to a real problem continues with the first of several posts on the eligibility rules, starting with the decision to make the CBC eligible for the system that could lead to mandated payments. The inclusion of the public broadcaster should be opposed by its critics and supporters since it harms both competition and the public interest role of the public broadcaster. Indeed, critics will rightly note the market distortion it creates for private entities who stand to lose further advertising-related revenues to the CBC, while supporters should be concerned that the bill undermines the CBC’s claim to a public interest role and makes an ad-free version of the service even less likely. [Previous posts in the series: the risk to the free flow of information stemming from mandatory compensation for linking, how the bill encourages clickbait and other low quality news given the absence of standards in the definition of “news content”, the unprecedented government intervention in a sector where independence is essential, how the bill undermines Canadian copyright law and Canada’s international copyright law obligations, and a Law Bytes podcast episode based on my appearance before the Standing Committee on Canadian Heritage.]

The inclusion of the CBC is a function of the exceptionally broad approach to the definition of “eligible news businesses” in the bill. Rather than limit the scope to Qualified Canadian Journalism Organizations, which was the government’s approach for tax-related support, the bill qualifies any news business that employs at least two journalists in Canada, operates in Canada, and produces general interest news content. The approach has huge implications: it means there are no standards for news organizations, it could lead to foreign services forum shopping into the Canadian system, it may exclude legitimate, smaller Canadian organizations who don’t meet the employee threshold, and it opens the door to television and radio broadcasters. In doing so, public broadcasters also qualify for the system. 

The government appears to acknowledge that this could create some problems, leading to the possibility of further regulations specifically targeting public broadcasters that become eligible news businesses under the law. Section 28 states:

The designation of a public broadcaster as an eligible news business is subject to any other conditions specified in regulations made by the Governor in Council.

At the moment, there are no conditions or regulations that have been made publicly available. Instead – much like so many other issues in both Bill C-11 and C-18 – the details have been left until after the bill receives royal assent. This means MPs and Senators are again asked to vote on a bill without knowing the full implications or regulatory plans.

Yet even without the details, it is readily apparent that the inclusion of the CBC is a problem. For critics of the CBC, Bill C-18 will further distort the market by harming private sector news organizations. The private sector has been urging the CBC to exit the online advertising business for years, arguing that the robust online CBC presence diverts much needed ad dollars from the private sector. Handing over new digital payments to the CBC from the anticipated pool of Google and Facebook money is likely to decrease the amount available to everyone else. In other words, the pot of money from a settlement or through arbitration is likely to reflect the size and value of the market. If CBC receives a share, that means less money for the private sector, who suffer revenue losses due to the public broadcaster from both digital advertising revenues and from the Bill C-18 system.

The 2021 Liberal platform seemed to acknowledge the concern by committing to: 

Provide $400 million over 4 years to CBC/Radio-Canada so that it is less reliant on private advertising with a goal of eliminating advertising during news and other public affairs shows.

Yet is there any real difference between shifting from reliance on private advertising to reliance on private funding from Internet advertising companies?  It is a distinction without a difference since both distort the market for private sector news organizations.

Further, the competitive impact is even worse in smaller, local communities. Those communities have seen a plethora of new, digital-first news organizations. In many of those communities, the CBC is the primary competitor. It is hard enough for digital start-ups to compete with a public broadcaster, but to compete against the public broadcaster flush with money from Google and Facebook may make the challenge even more difficult. As a result, making CBC eligible may force the closure of new, innovative digital news companies. For those who survive, they will have no choice but to enter into the Bill C-18 system, even if they would prefer to oppose it. The net result is that the government bill isn’t really optional since smaller news organizations will be coerced into participating as a matter of survival not because of Google or Facebook, but rather due to the inclusion of the CBC.

Bill C-18 is equally bad for supporters of the CBC, who envision the public broadcaster as fulfilling an essential mandate by ensuring public access to Canadian content, particularly reliable news. It is this mandate that is used to justify spending billions of dollars on the CBC. For example, the Broadcasting and Telecommunications Legislative Review panel said the following with respect to CBC news and paywalls:

Given the public mandate of CBC/Radio-Canada, any reduction in CBC/Radio-Canada’s current level of radio and television should only take place after the CRTC has carefully examined the impact it may have on Canadians who cannot access or afford content on digital platforms. At a minimum, there must be some level of free content, both news and entertainment, on CBC/Radio-Canada’s digital platforms.

Nowhere will the role of a well-resourced public media provider be more important than in the area of news and information content. As discussed earlier, the media landscape for news and information is being transformed radically, with significant pressure on the preservation of reliable news sources at the local, regional, national, and international level. Trustworthy news lies at the heart of a fully functioning democracy. The range and extent of CBC/Radio-Canada’s current services play an important role in providing citizens with information that is vital for our democracy to thrive. In this context, CBC/Radio-Canada has a heightened responsibility to provide high-quality, accurate, and dependable news, ensuring that Canadians have access to relevant and reliable information from all parts of Canada. It is also critical that Canadians are able to see and hear a Canadian perspective on international events. A profound understanding of what is going on in other parts of the world has never been more important.

While I think the CBC has undermined this vision at times (suing to stop fair dealing use of clips in political ads for example), I’ve been supportive of a public broadcaster that fills the gaps not well served by the private sector, including enhanced access to news supported by tax dollars. These laudable goals are effectively being advanced by Internet platforms that enable the sharing and distribution of the news. Far from seeking to penalize or require payments for this form of sharing, mechanisms that enhance Canadians access to relevant and reliable information should be encouraged. 

Bill C-18 does the opposite, requiring services to pay for having advanced the public broadcaster’s mandate. Indeed, I’ve argued in the past that the CBC should be actively making its content openly and freely available consistent with open access publishing policies that recognize that the public has already paid for the content. Fulfilling that public mandate and justifying supporters view that a public broadcaster is worth supporting depends upon making the content as openly accessible as possible. Bill C-18 sends the opposite signal, raising the question of why the government would simultaneously claim to support expanded ad-free access to news from the public broadcaster but also back measures that would mandate payment for platforms that enhance that same access.

4 Comments

  1. Wondering how many of Harper’s appointees are still on the CBC board?

    • Looks like the longest serving member of the board was appointed in 2017, so that would mean that none of the members was appointed to their current term by the Harper government.

      But you managed to slip the trigger word “Harper” into an irrelevant discussion, so you are a good and faithful servant of the LPC.

  2. A very nice blog, I like the way you share very honestly and interestingly, through my blog I learned a lot of things.

  3. Don’t the CPC cronies throw out Trudeau even moreso? Methinks you’re missing the man in the mirror guy.

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