Gov. reintroduces Broadcasting Act update, with social media exemption

OTTAWA -- Canadian Heritage Minister Pablo Rodríguez called previous concerns over social media broadcasting regulations “legitimate questions” Wednesday as he introduced the Government’s second attempt at updating the Broadcasting Act, now known as the Online Streaming Act. The new bill brings back an exemption for social media platforms, while maintaining that the act will apply to commercial content on social media sites. Also known as Bill C-11, the act aims to bring the vast array of online streaming services like Netflix Inc., and Walt Disney Co.’s Disney+ – and certain types of content found on Alphabet Inc.'s Youtube and Facebook Inc. – under the regulatory remit of the CRTC. Under the Online Streaming Act, it will be up to the CRTC to impose conditions of service on streaming services, as well as mandate financial contributions into the Canadian broadcasting system for large streaming services, as with the previous attempt at the legislation during the previous parliament, known as Bill C-10. The CRTC will also be given powers to impose administrative monetary penalties on streamers, just as it does with broadcasters. Technical briefing materials released to reporters ahead of the legislation's tabling emphasized that the CRTC will have no direct intervention in source codes and algorithms used by the streaming services. The Government has included an exemption for content generated by users on social media sites under section 2.1 of the bill, and has reintroduced an exemption on social media platforms under section 4.1, except in cases where the content also appears on other streaming services and "is uploaded to the social media service by the provider of the service or the provider’s affiliate, or by the agent or mandatary of either of them." According to briefing materials provided by the Government, the act "will not apply to social media services except for certain commercial programs, will never apply to programs that do not generate revenues. Rodriguez said “commercial programs and platforms” will be defined by revenue or if the content can be found on other streaming platforms. He said that amateur creators who generate revenue through video sponsorship or ads from social media sites, such as YouTube, will remain exempt and that it will only apply to “professional” music, movies or series. He added that there is no threshold for when a creator would be considered a professional, but rather whether or not the same content can be found on multiple platforms. “For example, a song from The Weeknd, that plays on YouTube but that also plays on Spotify, well it’s commercial stuff and should be treated equally on those platforms,” he said. “And also some of them have specific codes that are encrypted.” It will be left to the CRTC to decide how to regulate commercial content that does appear on social media sites. In doing so, according to the briefing materials, the CRTC will consider the degree to which a certain piece of content is monetized; whether or not the content is also carries "in whole or in part" by a broadcaster regulated by the CRTC; and whether or not it has an assigned number such as an international standards organization (ISO) number. Under the bill the CRTC would decide how to weigh each factor against the others. According to government officials, this balancing test will allow regulators to exclude from regulation those content creators who produce self-made, if highly lucrative, content. “So those are the criteria that the CRTC will have to define that, and we’re giving a sandbox, a very specific sandbox to the CRTC to define,” Rodriguez said at the press conference. Former CRTC vice-chair, Peter Menzies, told the Wire Report in a phone interview that the CRTC is “not equipped at all” institutionally to regulate online platforms, arguing that the internet should not fall under broadcasting regulations. “It would take them a long time and they would have to hire a lot of people,” he said. “If they're going to make sense of this, they might even have to change a lot of the regulations that they are currently applying to broadcasting outlets, radio and television, to try to even things up because some of those rules just don't make sense,” he said. Menzies said the government should instead narrowly define which of the large companies it is seeking financial contributions from, to support the Canadian cultural sector, based on Canadian generated revenue per year and subscriptions per year. “You use this huge net and you just scoop up everything that's there. And then you sort through all these fish that you've killed, to decide which are the ones that you really want to keep,” he said. He said the proposed bill will create uncertainty and fear in the creative sector, and will take the CRTC years to get through creating regulation. “I mean they haven't yet issued their licensing decision for the CBC. And that hearing happened 53 weeks ago. So how long is it going to take?,” he said. Campaigns director for OpenMedia, Matt Hatfield, also wrote in an email that the internet should not be treated like broadcasting. “This is duct tape on a deeply flawed bill, not a fix,” he said. “A clear explicit exclusion of user generated content is an improvement, and an acknowledgement that last year’s Bill C-10 was way out of line. They screwed up, and they’re now owning it.” However, he said that treating the internet like broadcasting creates many issues in the bill, such as giving the CRTC the power to require Spotify AB or Netflix feeds to showcase a mandatory percentage of officially recognized Canadian content. “Why? Why should custom feeds that have been built around what we individually want to see be edited to add CanCon we might not?,” he said. Stakeholders will receive their own technical briefing on Thursday, but Friends’ (formerly Friends of Canadian Broadcasting) new executive director, Marla Boltman, wrote in an email that at first glance the organization is pleased that the Government is capturing online platforms when they act as broadcasters and profit from content uploaded by users, and that discoverability requirements are imposed for Canadian content. “We will now take the time needed to assess the legislation to ensure that it creates a truly level playing field. In the meantime, Friends hopes that all political parties will seize this opportunity to work together to ensure that online platforms that act like broadcasters are held to the same standard as Canadian broadcasters,” she said. An exemption for social media services was controversially removed from the Government's previous attempt at the legislation in a House of Commons Heritage Committee meaning last year. In a statement Wednesday, the Canadian Media Producers Association welcomed the introduction of the bill. “The Online Streaming Act will reinforce Canadian cultural sovereignty, requiring that foreign tech giants play by the same rules as Canadian companies,” CMPA president and CEO Reynolds Mastin said in the release. “The people who work in Canadian film and television production were extremely pleased that during the last federal election campaign, all major federal parties endorsed modernizing the Broadcasting Act to include streaming services. We encourage MPs to work collaboratively across party lines to pass this important legislation.” During the press conference, Rodriguez said once the bill has been tabled he will write to the chair of the CRTC to look at, and modernize, the definition of Canadian content, which is currently based on many factors such as if the work tells a Canadian story or the percentage of the workforce that is Canadian. The Writers Guild of Canada (WGC), too, praised the bill. “Private, English-language Canadian broadcasters have reduced their spending on Canadian television production every year for nearly a decade, while foreign streaming services have taken over more and more of the Canadian market," WGC president Alex Levine said in a Wednesday release. The Canadian Association of Broadcasters, which has pleaded for looser Canadian content regulations from the CRTC since the COVID-19 pandemic, also issued a statement supporting the bill. "The Canadian Association of Broadcasters welcomes the introduction of Bill C-11 as a critical step towards recognizing and addressing the massive impact of unregulated foreign players in our broadcasting system," CAB president Kevin Desjardins said in a release. "A decade of exemptions from regulatory oversight has given an unfair advantage to foreign streaming services, allowing them to capitalize on the Canadian market while avoiding any of the obligations imposed on our domestic broadcasting sector." – Reporting by Michael-Lee Murphy at mleemurphy@thewirereport.ca and Jenna Cocullo at jcocullo@thewireport.ca and editing by Michael Lee-Murphy

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Gov. reintroduces Broadcasting Act update, with social media exemption

Broadcast | February 2, 2022

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