Money allocation main issue as Streaming Act replies filed to CRTC

Battles over money and how to allocate it are at the forefront as the CRTC receives replies on the implementation of the Online Streaming Act, which was known as Bill C-11 in Parliament. The deadline for replies was late last month. Streamers are keeping to their arguments that the commission should go slow on assessing contribution from them. Some social media platforms want to be excluded altogether from the regime. Established Canadian telecom service providers (TSPs) are crying poor and want a lessening of regulatory burdens. They believe the streamers, most of them foreign-owned, should pay their fair share. Other stakeholders land somewhere in the middle. The Canadian Independent Screen Fund for Black and People of Colour Creators (CISF) is calling for stable funding for the Broadcast Participation Fund (BPF). It wants to see organizations regulated by the CRTC or funded through its regulatory framework, to have a 35 per cent BIPOC quota. This figure should apply to the commission itself, CISF states. Writing in support of CISF, Allison Outhit maintained that existing outlets should not be handling funds for BIPOC programing. “It is not their priority, nor their expertise, and the testimony of countless Black and people of colour creatives (as well as the BIPOC employees/boards/committees/stakeholders of the funds themselves) is that these environments, and the thinking and decision-making that they embody continue to be dominated by the systemic values that have long kept closed the gates against BIPOC entrepreneurship and creativity,” she told the commission. The Broadcasting Accessibility Fund (BAF) funds projects in English and French for content for the disabled community. It notes that more than 75 per cent of its $5.7 million budget over the last decade has been disbursed as grants to producers. The average grant is $107,000. It has $667,000 remaining in its accounts and is lobbying for contribution money to top up its funding. The Disability Screen Office expressed disappointment that so many broadcasters promised to provide greater opportunities for racialized and other minority groups but ignored the disabled. It called for new funds to be established. It praised the CBC for its representations of disabled characters in its programming. The Indigenous Screen Office is asking to be considered as a certified independent production fund (CIPF). Many intervenors supported its bid The Community Radio Fund of Canada is seeking a community broadcasting fund to be established to give money to local stations. It did not provide a number for the broadcasting fund but endorsed the $25 million suggestion other intervenors raised. Access Communications Co-operative of Saskatchewan wants to see community channels get money from existing production funds to create programming for those channels. It is also amenable to the idea of establishing a new production fund altogether for the same purpose. The Writers Guild of Canada filed a lengthy submission which estimates that $1 billion will flow to production each year. This is a good development, it added. “Art is made by artists, Canadian art is made by Canadian artists, television is a writer’s medium, and Canadian screenwriters and showrunners are the Canadian authorial voice of Canadian content,” it wrote. It chastised Rogers Communications Inc. for seeking to outsource its production to independent producers. It denounced the Toronto telecom’s filing as “obstructionism”. Other broadcasters came in for a similar spanking. “They cherry-pick from the Act and the not-yet-in-force Draft Policy Direction, seeking to have the regulatory-policy tail wag the cultural-policy dog,” the writers asserted. It criticized the Motion Picture Association Canada (MPA-Canada) for trying to get foreign location service (FLS) production counted towards Canadian content regulations. FLS is not Canadian programming, the guild stressed. In its submission, MPA-Canada decried the idea that only Canadian undertakings should benefit while foreign streamers are forced to pay contribution. Providing money to the production funds should be an option, not a requirement. “This kind of regulatory gamesmanship is counterproductive and should be ignored by the commission,” it asserted. The Canada Media Fund stated it should receive a healthy portion of the money that will be flowing in once foreign streamers are part of the Online Streaming Act’s provisions. It wants the same percentage of funding it currently gets. “In short, do not cut the pie into smaller and smaller pieces,” it said. “Make a bigger pie.” Accessible Media Inc. said the foreign streaming services have known for a long time that the legislation was coming. It called on the regulator to move without delay in establishing the new contribution levels. Many intervenors said no new CIPFs should be established or if one is, it should be limited to the Indigenous Screen Office. That stance disappointed the Black Screen Office, which is applying to become a CIPF itself. The Black Screen Office quarreled with the Writers Guild about the 10-point system currently in place for production credit. Many Black filmmakers tell stories of the diaspora and work with creators in other countries. It is unreasonable to hold them to the same standards applied to domestic filmmakers. The CRTC’s current initiative should not merely extend the existing framework to new players, Apple Canada Inc. averred. Instead it should look at how a new regime can best be implemented. Flexibility is the key, the multinational opined. It dismissed the notion that foreign companies are not pulling their weight. “The suggestion that non-Canadian online undertakings and their affiliates are not contributing today to the making and promotion of Canadian programming is a myth not based on fact,” it wrote. Pelmorex Weather Networks (Television) Inc., parent company of The Weather Network and MétéoMédia, had a series of recommendations. Canadian programming services should not be required to contribute to third-party content funds, it stated, and thresholds should be applied on a per-undertaking basis. It called for an exemption for websites and apps that predominantly feature text-based news and information. The Documentary Organization of Canada says initial base contributions for online audiovisual producers should be at least five to 10 per cent of revenues. It calls for the establishment of more CIPFs. Blue Ant Media Inc. agreed with other submissions which called for the reduction of regulation on broadcasters. It also does not want base contribution applied to those broadcasters who also must fulfill a Canadian Programming Expenditure requirement. It conceded that foreign studios have poured a lot of money into Canada in the past several years. But, Blue Ant added, that does not fall under the cultural aims of the Online Streaming Act. Blue Ant calls itself a hybrid media company. Another firm that does that is Anthem Sports and Entertainment. It is calling for funding to be available for reality television. “We believe that a dedicated, separate envelope must be a key outcome of the implementation of Bill C-11 in support of live and unscripted content, like that which our company both produces and distributes,” it said. Royalties paid for use of music in film and television productions should not be considered when assessing contribution, the Screen Composers Guild of Canada wrote the CRTC. It dismissed calls for flexibility for foreign streamers. The centre for digital media literacy, MediaSmarts, wants stable funding provided to it by the CRTC. “We were disheartened, yet unsurprised to read that digital media literacy was not a commonly raised issue through the initial interventions during this consultation,” the group wrote in its own submission. The Digital Media Association (DiMA) called on the commission not to impose any contribution amounts until it has defined Canadian content and Indigenous content. Streamers pay out 70 per cent of their revenues as royalties, it stated. Channel Zero, the owner of Hamilton Ont.’s CHCH television, accused the foreign streamers of behaving as though C-11 never passed. It dismissed claims the foreign companies invest in Canada altruistically. They only do so when it is in their interests, Channel Zero stated. It is time for the regulator to put the streamers under Canadian jurisdiction. The Directors Guild of Canada called for 80 per cent of contribution to go to the Canada Media Fund, Telefilm Canada and the National Film Board. The rest can be distributed among CIPFs. It proposed that companies with annual revenues of less than $5 million be exempt from contribution levies, those with revenues of $5 million to $10 million would pay 20 to 25 percent of revenue and those over $10 million would be assessed at a rate of 25 to 40 per cent. Telefilm Canada said it is currently funding Canadian and Indigenous films. It vows to continue to do so if it receives payments from the contribution fund. Telus Corp., like many other traditional players, called for regulatory reform. It said the CRTC should not apply contribution obligations on virtual broadcasting distribution undertakings (vBDUs) but if it did, those obligations should be restricted to the vBDU’s margins, such as revenues received from third parties. CBC/Radio Canada denounced the suggestion by foreign players that contribution be withheld until CanCon rules are set in stone. Imposition of contribution standards is a critical first step in ensuring the sustainability of Canadian broadcasting, the public broadcaster stated. Cable Public Affairs Channel Inc. also came out in favour of the commission’s timelines on contribution. It called for the establishment of a fund to support services of exceptional importance. The Canadian Independent Music Association (CIMA) wants to level the playing field up, not down. It pointed out the nuance between Canadian-owned undertakings and Canadian-based businesses. Companies which operate here but are owned by other nationals do not fall under the provisions of CanCon rules, it said. The Canadian Association of Broadcasters found fault with intervenors from both sides of the argument. It criticized the foreign streamers for wanting to delay implementation of the contribution regime. It also chastised the guilds, unions and associations for not having a true view of the dire situation broadcasters face. It called for funding for four buckets–audiovisual or music programming; news and information; marginalized groups; and public interest objectives. The thresholds for contribution should be higher than the CRTC is proposing, SiriusXM Canada Inc. suggests. It offers levels of $50 million for audiovisual services and $25 million for online audio services such as itself. It rejected the call from some foreign platforms to reassess their commitment to Canada if the Streaming Act is fully implemented. “The argument that many online undertakings provide niche and nascent service and may, therefore, be more sensitive to the regulatory costs associated with the proposed contribution framework is not a sufficient basis for the CRTC to provide all foreign online undertakings a break from making their fair share of contributions to the Canadian broadcasting system,” SiriusXM wrote. The Public Interest Advocacy Centre faulted BCE Inc. for not breaking out its revenue numbers for streaming service Crave TV. PIAC estimated Bell makes $350 million annually from the service. PIAC also agreed with MPA-Canada that CanCon rules should be in place before contribution is assessed. Friends, the broadcasting lobby group, noted that the new framework will likely not be fully in place for more than two years. It is essential that priorities be established as soon as possible, it stated. The organization accused the foreign streamers of placing as many roadblocks as it could into the system. The consortium representing foreign music labels, Music Canada, offered four suggestions to the regulator. It said broadcasting policy and government programs should not be a substitute for industry investments; new funding programs constitute an opportunity to develop Canadian talent and support the commission’s aims; copyright policy should not be confused with broadcasting policy; and current contribution rates on traditional radio broadcasters must be maintained. The Bell Fund used its reply to respond to specific interventions made initially by other stakeholders. It does not agree with the Indigenous Screen Office’s contention that board funding decisions for CIPFs have a floor of $250,000, with staff deciding on smaller amounts. Bell further stated that, in response to the Writers Guild, it frequently uses eight-point eligibility standards in its productions, instead of the minimum six-point. It does not support the Guild’s call for 10-point standards. The Rogers Group of Funds (RGF) called for foreign streamers to spend a portion of their contributions on CIPFs and for a recalibration of BDU contributions to allow more flexibility in supporting CIPFs. If offered to work with the Disability Screen Office in creating greater accessibility in broadcasting. Netflix Services Canada ULC was among the foreign companies that do not want to be forced to contribute. It backed the MPA-Canada assertion that such a plan should be voluntary. It rejected Bell’s call for programming and production partnerships between foreign and domestic broadcasters. Doing so would merely propagate the closed broadcasting system, it argued. Meta Platforms Inc., parent company of Facebook and Instagram, renewed its call for an exemption from the regime. It has neither programming or editorial control of the content placed on its platforms, it said. Alphabet Inc.’s Google called for flexibility from the CRTC. It asked for an exemption from services over which there is not programming control. Contribution should not be exclusive to existing funds. A collective of music stakeholders filed a submission under the name ACCORD. It asserted that current voluntary initiatives are not contributions; CanCon review is not necessary before contribution can be assessed; comparisons between commercial radio royalties and streaming royalties are irrelevant and misleading; and obligations on streamers should not obviate those on traditional broadcasters. The Independent Broadcast Group said there is no reason to delay the imposition of the new regime. It should be implemented by the beginning of September 2024, it maintained. Virtual BDUs should be subject to the new framework and expenditures on non-Canadian service production should not be included in calculations of contributions. Many intervenors have ignored the dire situation which faces domestic broadcasters, Bell maintained. It suggested setting the revenue threshold at $50 million. “Canadian broadcasters and broadcasting distribution undertakings operate within a highly regulated system,” the company wrote. “Meanwhile, our direct competitors–foreign online undertakings–currently have no regulatory obligations. This inequitable situation must be rectified.” Rogers is of the opinion that contribution should only be paid by foreign streamers and not domestic broadcasters. It believes the threshold should be set at $50 million. Transactional video on demand, teleshopping sites and news sites should be exempt, the Toronto telecom stated. Saskatchewan Telecommunications Holding Corp. questioned the desirability of increasing contribution on traditional players. It argued for regulatory reform. Unlike most who submitted replies, SaskTel does not wish to appear at the public proceeding on the topic. Corus Entertainment Inc. criticized the foreign streamers for seeking to shirk their responsibilities and unions and guilds for treating the fund like a milch cow. It thinks some intervenors exaggerated the benefits domestic broadcasters enjoy. Eastlink parent company Bragg Communications Inc. said small carriers like itself could be adversely affected by a new contribution framework. It said BDUs’ contribution rates should not go up in order to support new production funds. Reelworld Film Festival screens 100 per cent Canadian content from BPOC creators. It proposes a year-long wage subsidy program and equity funding for training. American broadcaster AMC Networks Inc. was among those who called for nascent and niche undertakings to be exempt from the new framework. It also called for discretion on where the funds would be allocated. American streamer Roku Inc. said its channel will need time to grow in popularity in Canada and thus should not be subject to contribution requirements. “As submitted by a number of parties (including Apple, Google and Netflix), Roku believes that the commission should approach the regulatory framework for online undertakings with fresh eyes, avoiding any predisposition to simply graft the current rules and regulatory framework for traditional broadcasters onto online streaming services,” it stated. Unifor, which represents many broadcast employees, called for a leveling of the playing field. It is not surprised that foreign streamers are up in arms about the proposed regime. “Plainly put, sometimes the parties being regulated do not like being regulated, and this is especially true for parties that are brought under regulation after enjoying operating for a long time period with little to no active regulation,” the union said. Monies raised by contribution should go to existing funds, according to the National Campus and Community Radio Association. It supports the idea of a community radio initiative backing campus, community and Indigenous broadcasting. TikTok Technology Canada Inc. called for a social media exemption. It vehemently disagreed with a proposal by ACTRA that the registration threshold should be lowered to $1 million. Programming for children and youth was top of mind for the Shaw Rocket Fund. It backs the notion of promoting digital literacy among those under 18. “Canadian and Indigenous children and youth are not a programming genre, they are a part of an audience,” the fund stated. The Canadian Media Producers Association worried about lack of data and said it could not easily assess the revenue threshold the CRTC should estabIish. It recommended the threshold be set at no more than $10 million. It believes the regulator can collect contribution as it determines what constitutes Canadian programming. Uniform base contributions are not feasible for music streamers, according to music streamer Spotify. It called on the CRTC to wait until CanCon regulations are in place. “Simply extending the existing contribution regime to online undertakings without deeper consideration will suit none of the regulated parties, will discourage new entrants and services, and will harm Canada’s broadcasting system and the public interest, contrary to the broadcasting policy objectives,” it wrote. The Forum for Research and Policy in Communication called on the commission to ignore CBC’s request for exemption as the CRTC is currently reviewing the public broadcaster’s licence renewal. Amazon was among the foreign streamers calling for the regulator to look at contribution and CanCon concurrently rather than consecutively. It also wants a flexible regime. FilmOntario came out against the proposal by several Quebec intervenors that 40 per cent of the contribution should be directed to French-language programming. It called for the CRTC to work with such CIPFs as Ontario Creates, the Canada Media Fund and Telefilm. The Canadian Association of Community Television Users and Stations (CACTUS) submitted two lengthy filings detailing its feelings on the subject. It proposed a CIPF to support community-access media which would be funded up to $70 million. The Free Speech Coalition represents the adult entertainment industry. It does not want its products coming under the purview of the CRTC. “We have deep concerns about any bill which requires significant regulation of adult media production in Canada but does not simultaneously guarantee the legal rights of those businesses,” it stated. The commission will hold a public hearing on the matter in November. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Money allocation main issue as Streaming Act replies filed to CRTC

News | August 2, 2023

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Money allocation main issue as Streaming Act replies filed to CRTC

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