Canadian Heritage Minister Steven Guilbeault is set to introduce his “Get Money from Web Giants” Internet regulation bill on Monday (update: the bill is on the notice paper, but may be delayed until Tuesday). Based on his previous public comments, the bill is expected to grant the CRTC extensive new powers to regulate Internet-based video streaming services. In particular, expect the government to mandate payments to support Canadian content production for the streaming services and establish new “discoverability” requirements that will require online services to override user preferences by promoting Canadian content. The government is likely to issue a policy direction to the CRTC that identifies its specific priorities, but the much-discussed link licensing requirement for social media companies that Guilbeault has supported will not be part of this legislative package.
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Heritage Minister Steven Guilbeault’s “Get Money from Web Giants” Internet Regulation Bill: An Unauthorized Backgrounder
Canadian regulatory hearings are usually relatively predictable affairs with scripted presentations and well-rehearsed speaking lines to most questions. During the recent two-week Canadian Radio-television and Telecommunications Commission hearing on the future of television regulation (dubbed “TalkTV” by the CRTC), Chair Jean-Pierre Blais expressed frustration on several occasions with the unwillingness of witnesses to veer much beyond their prepared notes.
My weekly technology law column (Toronto Star version, homepage version) notes that changed on the final day of the hearing, though it was Blais that seemingly departed from the script. Netflix, the online video giant that popped up in virtually every discussion, was one of the last witnesses on the schedule. The company had submitted comments to the CRTC consultation over the summer, but had not asked for an opportunity to appear before the Commission.
After the CRTC requested that it come to Gatineau to answer questions, the company came prepared to discuss the development of its business, but chafed at the prospect of disclosing confidential information such as subscriber numbers and spending on Canadian content. Blais took great umbrage at its reluctance to disclose the information, ultimately ordering the company to comply with the information request and implying that failure to do so could result in new regulation.
This week’s CRTC mandatory distribution hearing has placed the spotlight on a fascinating disconnect between the Commission and the Canadian broadcast community. Despite months of telegraphing its intent to promote consumer choice over broadcaster revenues, the first two days of the hearing have featured repeated presentations from groups who have not gotten the message. CRTC Chair Jean-Pierre Blais could not have been clearer in a speech last October:
In our decision, we noted that consumers increasingly expect to be in control of what they watch. It makes sense that consumers and the distributors who serve them should have more flexibility in packaging choices. While we acknowledged the value of predictable revenues to the programming services, we decided that the days of guaranteed wholesale rates are over. Programming services cannot expect to remain completely insulated from the growing demand for greater choice by Canadians.
He followed that up in March by telling the production community that it “will need to compete, just like any other sector.”
Despite the messaging, many of the groups seeking mandatory distribution evidently don’t get it.
The CRTC has issued the question to the Federal Court of Appeal regarding the applicability of the Broadcasting Act to ISPs.
The CRTC has released its 2009 new media decision (full decision here) and it looks not unlike the 1999 new media decision. Days of hearings, thousands of pages of submissions and the Commission has side-stepped the pressure to "do something," by maintaining its hands-off approach. It concluded that regulatory intervention would get in the way of innovation and that a compelling case was not made that additional support through an ISP levy was needed. Indeed, the decision notes that "the Commission is of the view that parties advocating repeal of the exemption orders did not establish that licensing undertakings in the new media environment would contribute in a material manner to the implementation of the broadcasting policy set out in the Act."
There is at least one very noteworthy change to the new media exemption, however. The CRTC was clearly troubled by allegations of undue preferences being granted by wireless providers (the issue raised by the Weather Network and discussed in this March column). It has therefore proposed amendments prohibiting such practices: