By Konrad von Finckenstein
THE BROADCAST AND Telecom Legislative Review panel’s lengthy report is divided into institutional recommendations, telecom recommendations, broadcasting recommendations and others.
It made 46 regarding the Broadcasting Act. Apart from the recommendations on the CBC about which I express no comment, some are well thought out and would improve the present system substantially. The extension of the Broadcasting Act to “electronic communications services” on the internet is the area of greatest concern.
The Panel recommended:
- … the Telecommunications Act be amended to establish explicit jurisdiction over all persons and entities providing, or offering to provide, electronic communications services in Canada, even if they do not have a place of business in Canada.
- …the scope of the Broadcasting Act extend beyond audio and audiovisual content to include alphanumeric news content made available to the public by means of telecommunications, collectively known as media content…
The basic underlying philosophy of the panel can be summarized as follows:
- Everyone involved in electronic media communications (that is, everything from broadcasters to streaming services to newspapers to Internet Service Providers to bloggers) should be subject to CRTC regulation, and all who are in the business of creating, aggregating or disseminating content must contribute to the creation and dissemination of Canadian content; and
- Everyone involved in telecommunications must contribute to the policy objective of universal, affordable broadband access by Canadians.
Apparently, the panel viewed the whole communications scene through the broadcasting lens and it totally failed to see the internet is at the center of the communications world – while broadcasting is just one and only a minor use of the internet.
The Minister of Canadian Heritage has stated he wants legislation by June.
While this deadline may change due to the change in priorities driven by the ongoing COVID-19 pandemic, the key driver for this timeline is obviously the Canadian broadcasting industry which feels discriminated against and unfairly treated. They must comply with the Broadcasting Act while over the top services like Netflix compete directly with it, but need not comply with the Act and they don’t even have to collect and pay GST.
To achieve the minister’s goal, any legislation should solely concentrate on that broadcasting issue and avoid compromising or harming the internet. A free, unrestricted internet is a key source of innovation and vital for Canada’s economy. Amendments to the Telecommunications Act, issues such as big data, competition concerns, privacy, spectrum reform and digital literacy need more reflection and thought and should not be rushed to fix such a standalone issue.
There is an easy and effective way to achieve the panel’s objective regarding broadcasting.
At present, the New Media Exemption Order (NMEO – some call it the digital media exemption order, or DMEO) exempts the internet from the Broadcasting Act.
To remedy the situation, the government only needs the amend the NMEO to provide it does not apply to any enterprise providing electronic communications services containing audio and audiovisual content in Canada for a fee, or for free but with included advertising.
“Apparently, the panel viewed the whole communications scene through the broadcasting lens.”
These providers would then be subject to the Broadcasting Act. Let’s call these providers Over the Top Broadcasters (OTBs). The necessary, amendments to the GST and income tax legislation would also need to be made to ensure that these providers are subject to the same tax regime as Canadian establishments.
There could be a minimum revenue requirement for such OTBs before they lose the present exemption, to recognize that most innovation occurs at the edges, driven by small players. So, the non-exemption should only apply to OTBs above a certain threshold revenue.
All non-exempted OTBs would be required to register with the CRTC, as the panel suggests. The CRTC would have to create new terms and conditions for registered OTBs, applying existing terms and conditions for broadcasters, mutatis mutandis. Let’s call them the Registration Regulations. As suggested by my former colleague, Peter Menzies, an option could be given to the registered OTBs. The OTB would have the option of:
- Complying with the Registration Regulations, or
- Committing to invest 25% of their gross Canadian income in Canadian productions. (Such spending would be equivalent to the 25% Netflix purports to spend today in Canada.) Spending such an amount would exempt them from the Registration Regulations.
The requirement for being Canadian-owned and controlled would not apply to OTB as suggested by the panel in Recommendation 56.
The government should make such amendments to the Broadcasting Act and others as necessary, as well as implementing the various panel recommendations dealing with such things as:
- Timeliness of decisions
- Transparency
- Publications of Governor in Council directions
- Timelines for appeals to Governor in Council
- Exchange of data and information with the Competition Bureau and Office of the Privacy Commissioner
- Public participation in hearings
- Funding of public interest groups
- Clarifying and entrenching the role of the Commission for Complaints on Telephone and Television Services
- Additional powers for the CRTC allowing it to make orders and assess monetary penalties
- Awarding costs to public interveners
- Participation by indigenous nations
- Participation by person with accessibility issues
The panel also totally failed to address the criteria for determining what is a Canadian program. This should be entrenched in legislation. Just like income tax deduction programs, it should be based on objective criteria that a Canadian program must meet. Any broadcaster or OTB could apply and would receive support provided they meet objective criteria; i.e. criteria that can be established by facts without the requirement for any qualitative judgment. e.g. the work was produced in Canada.
Support would be on a point basis; the more criteria a work meets, the higher the percentage of support.
Also, the suggestion CRTC commissioners have one seven year term seems appropriate. On the other hand, the suggestion to de-regionalize the commissioners and create a 25 member consultative panel should be rejected. It diminishes the regional influence and creates 25 inside influencers with no accountability.
Making such amendments to the Broadcasting Act would create an effective broadcasting system without subjecting the whole of the internet in Canada to the Broadcasting Act. It would answer the concerns of present broadcasters regarding the unfair competition with broadcasting delivered over the internet, it would ensure that OTBs would contribute to the creation and dissemination of Canadian content.
Konrad von Finckenstein is a former CRTC chair (2007-2012) and is a member of the board of directors of the Public Interest Advocacy Centre.
