The CRTC yesterday released its much-anticipated Online Streaming Act decision that has been years in the making. Given the likely opposition from many stakeholders, it is virtually certain to lead to protracted trade and legal battles. From the moment the government introduced Bill C-10 in 2020, its goal was to impose regulatory obligations on Internet streaming services, treating them as online broadcasters and mandating that they pay into the Canadian system. This week’s ruling puts a number on the payments, building on an earlier 5% interim levy with an additional 10% in expenditure requirements. The combined 15% places Canada among the most expensive operating jurisdictions in the world for streaming services, with consequences that will undoubtedly affect consumer streaming prices. Moreover, with the streaming services already challenging the interim 5% levy in court, they will undoubtedly challenge this one as well. In fact, the battle will not be limited to Canadian litigation. The U.S. government, which has become increasingly vocal in its opposition to the Online Streaming Act, will view this decision as a provocation and escalate pressure on Canada to drop the legislation altogether. Culture Minister Marc Miller appeared to hedge in his reaction to the decision, suggesting that the government sees the headaches that lie ahead.
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How the Online Streaming Act Misdiagnosed Canada’s Broadcasting Woes
Nearly one year ago, I made my way from my home in Ottawa across the river to the Gatineau hearing room used by the Canadian Radio-television and Telecommunications Commission (CRTC) to participate in its inaugural proceeding on implementing the Online Streaming Act, better known as Bill C-11. I had regularly appeared as a witness at House of Commons and Senate committees, but this was my first time participating in a hearing before Canada’s broadcasting regulator. I came with a simple message: while the roster of witnesses was filled with cultural lobby groups and broadcasters asking for their share of the bill’s anticipated pot of gold, the perspective of consumers and the public interest needed to be heard.
My opening statement emphasized prioritizing public over private interests, which, I argued, meant putting Canadians at the centre of their communications system, as one CRTC chair once characterized it. I did not anticipate receiving a warm reception, but I was still taken aback by the frostiness toward the notion that consumers and the public interest were important considerations. Instead, commissioners pointed to the need to step in where broadcasters or content creators were struggling to succeed in the market.
The Law Bytes Podcast, Episode 205: Len St-Aubin on What the CRTC’s Internet Streaming Ruling Means For Creators, Competition and Consumer Costs
Last week, the CRTC released its much-anticipated Bill C-11 ruling on the initial mandated contributions from Internet streaming services. While the government focused on the requirement to contribute 5% of Canadian revenues, a closer look revealed the CRTC largely ignored industry data and the actual contributions from Internet streaming services and seemed entirely unconcerned by the effects on competition and consumer costs. Len St-Aubin is the former Director General of Telecommunications Policy at Industry Canada and played a role in the development of both the Broadcasting Act and Telecommunications Act. He provided consulting services to Netflix until 2020 and has since been an active participant in the debate on Internet policy. He joins the Law Bytes podcast to talk about the CRTC ruling, the state of TV and film production in Canada, and what may lie ahead for the streamers, creators, and consumers.
My CRTC Appearance on Bill C-11: Why Isn’t the Commission Concerned with Competition, Consumer Choice, and Affordability?
The CRTC’s Bill C-11 hearings are in their third and final week as a steady stream of broadcasters and producers make their way to Gatineau to urge the Commission to force Internet streamers to hand over cash in a giant cross-industry subsidy scheme designed to support everyone from small producers to Bell’s news division. As the witnesses take turns seeking the mantle that they are facing the biggest crisis (even as there is record film and television production in Canada and broadcasters stand to be the biggest beneficiary of the Online News Act), there has been practically no interest or discussion of the risks to consumers and competition that could come from significant new regulatory costs.
I set out to change that yesterday in my appearance before the Commission. It was my first time to appear as a witness before the CRTC and I used the opportunity to emphasize the real risks of reduced competition and higher costs that can come with mandated payments that exceed global standards. Further, I argued that the Commission should not establish interim payments at all, noting that it was more appropriate to address all of the outstanding Bill C-11 regulatory questions before looking to streamers to start cutting cheques.
Heritage Minister Pascale St-Onge’s Tries to Re-Write Bill C-11 History: There Is No Quick Implementation and the Government is to Blame
The government plans to release its final policy direction on Bill C-11 today just days ahead of the start of a weeks-long series of hearings at the CRTC on the Online Streaming Act (I am scheduled to appear in early December). Ahead of the release, Canadian Heritage Minister Pascale St-Onge tries to re-write history, urging fast enactment of the legislation and blaming the Conservatives for the delays. Yet here is the reality: Bill C-10, the predecessor to Bill C-11, would have become law back in 2021 had the government not opened the door to regulating user content. Instead, the bill rightly became a source of concern, leading to years of legislative delays that virtually guarantees that nothing will take effect until 2025 at the earliest.
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