‘Outdated’ regulatory tools unsuitable for online environment, streamers tell CRTC

Online streamers continue to argue against the CRTC applying traditional broadcasting regulations on their operations, asserting that their business models and the nature of the open internet fundamentally differ from the conventional TV and radio landscape. In submissions to the CRTC’s recent consultation on the market dynamics in the Canadian broadcasting sector, streaming companies — including Netflix Inc., Amazon.com, Inc., Apple Inc., Alphabet Inc.’s Google, Paramount Global, and Spotify AB — contend that there is no justification for the CRTC to extend rules originally designed for the traditional broadcasting system to the online streaming market, despite amendments made to the Broadcasting Act under Bill C-11 which were meant to haul them in. The regulator asked stakeholders about a variety of issues related to the ways broadcasters, distributors and online streaming services interact and navigate the media landscape. The CRTC is looking at how these market dynamics affect the industry’s ability to meet the newly revised Broadcasting Act’s policy objectives, and whether it should extend or adapt its regulatory tools to online undertakings. While players from across the industry discussed a wealth of topics in their responses, the online streamers presented a unified front, continuing to challenge the idea of regulation. Central to their arguments is the fundamental difference between the open internet and the historically closed system of traditional broadcasting. “Simply put, there is no market failure or legal basis to extend the rules designed to address bottlenecks in traditional Canadian broadcasting to online undertakings, and thereby close the global entertainment market that the internet has opened,” Amazon states in its submission. “There is no basis for the CRTC to interfere with the positive effects online undertakings have had on Canadian broadcasting,” the company continued later in its submission. “Regulatory intervention risks disturbing the important gains that have accrued to artists, creators, producers, and consumers as a result of the presence of online streaming services in Canada.” Amazon, together with other foreign audio and audiovisual streamers, argues that the emergence of streaming opened up the entertainment market after previously being gatekept by a handful of Canadian broadcasting distribution undertakings (BDUs). Canadians now have greater access to and choice of programming, while producers have a better shot at reaching their audiences. The companies argue that this brings competitive and financial benefits to the Canadian broadcasting system, furthering the policy objectives in the Broadcasting Act, and warn the CRTC not to tamper with it. Apple shares the sentiment, contending that current regulatory tools were “primarily designed to address vertical integration among Canadian programming undertakings and distributors.” The company argues such tools are “neither appropriate nor relevant for online undertakings, which operate in an open network environment.” “Apple urges the commission to eschew an approach that seeks simply to project onto the online environment the past disputes from the traditional broadcasting system and extend onto a new dynamic environment an outdated form of regulation.” The Motion Picture Association of Canada (MPA-Canada), which represents major international entertainment studios and distributors — including Netflix, Walt Disney Co., Paramount, Sony Group Corp., Comcast Corp.’s Universal Studios, and Warner Bros. Discovery, Inc. — described the CRTC’s regulatory tools as “dated and ill-fitting,” calling instead for a “modernized, flexible, incentives-based framework.” “The record in this consultation provides no justification for the commission to impose dated, disruptive, and costly regulatory requirements on online undertakings,” its reply states. “Any attempt to regulate the competitive, well-functioning internet marketplace will stifle innovation, put at risk the features and flexibility that Canadians enjoy today, and undermine sustainability of the Canadian broadcasting system as markets evolve.” READ MORE: -- Audio streamers’ group, Canadian advocacy org disagree on Streaming Act ‘tax’ -- Amazon joins streamers’ advocacy group amid streaming act court challenges -- CRTC to examine CanCon rules for audio in June hearings Streamers emphasize CRTC’s ‘limited’ powers, oppose carriage rules The streaming companies all take the position that the CRTC has limited regulatory authority over online undertakings compared to traditional broadcasters, particularly when it comes to their commercial arrangements, pointing to language in the Broadcasting Act and Parliamentary committee proceedings. “In recognition of the crucial differences between the traditional closed environment and the online market, Parliament made ‘intentional decisions’ about which economic tools to use and which ‘should not exist at all in the new online environment,’” writes MPA-Canada, citing discussions during the Senate communication committee’s review of the Online Streaming Act back in November 2022. At the time, Canadian Heritage representatives told senators that the CRTC’s regulatory tools are grounded in the context of Canada’s closed broadcasting system, and that the legislation does not intend to give the CRTC the same tools it currently has. MPA-Canada argues that, according to the act, while the CRTC can make undue preference regulations for all broadcasting undertakings, it is only allowed to impose carriage requirements onto online undertakings “that provide the programming services of other broadcasting undertakings in a manner that is similar to a distribution undertaking.” The streamers assert that the CRTC can only do so “without terms or conditions,” meaning it cannot dictate the specifics of the carriage arrangement beyond just the requirement to carry the programming service. Each streaming company argues that they do not fall under that description because they are not similar to a distribution company. “We are unaware of any foreign online undertaking in Canada today that can be classified as an ‘online undertaking that provides the programming services of other broadcasting undertakings in a manner that is similar to a distribution undertaking,’” contends MPA-Canada. It argues that “online undertakings are fundamentally different from traditional BDUs. They operate in an open-access model via the public internet that is available to all consumers, rather than a closed proprietary model that is accessible only by subscribers to specific BDUs.” Spotify takes its argument against regulation a step further, arguing that regulating the terms of trade between businesses would be a violation of the constitution. “The commission's proposals in would see it imposing dispute resolution and commercial negotiation requirements on online undertakings that are plainly outside the scope of broadcasting,” the audio streamer adds. Producers, advocates challenge streamers’ call for minimal regulation The streamers faced pushback from the Canadian Media Producers Association (CMPA) and Friends of Canadian Media, with both groups opposing the streamers' stance. The CMPA “strongly disagrees” with their assertion that online undertakings are not like BDUs and should therefore not be subject to regulation. “Many of these platforms function similarly to BDUs, aggregating, distributing, and monetizing third-party content,” the CMPA wrote. It argues that, while traditional BDUs control distribution through channel packaging and pricing, streaming platforms “exercise similar gatekeeping power” by controlling “content visibility, subscription structures, and revenue models.” “The CRTC has clear authority under the amended Broadcasting Act to regulate these services, ensuring Canadian content is not disadvantaged in the digital marketplace.” The producers' association argued that market imbalances persist, requiring regulatory intervention such as codes of practice to ensure fair negotiations and equitable treatment for independent producers dealing with both domestic broadcasters and online services. Friends took a stronger stance, dismissing the streamers’ arguments against regulation as “fictions” and emphasizing Canada’s right to protect its cultural sovereignty. “The implementation of the Online Streaming Act was meant to be Canada’s long overdue notice to the foreign streamers that their rent had come due. Yet here we are, almost two years later, being forced to read page after page of foreign streamer submissions using this notice as yet another attempt to undermine the commission’s obligation and authority to implement the Online Streaming Act,” wrote the advocacy group in its reply. Friends advocates for the extension of carriage and discoverability obligations to online platforms to ensure Canadian and Indigenous content, particularly local news and content for underserved communities, remains visible Wholesale code, undue preference rules deemed inapplicable The streamers’ arguments that the CRTC’s power is limited extends to the application of the Wholesale Code, which governs commercial dealings between traditional broadcasters and distributors. They assert that it should not apply to online undertakings. Not only do they argue that the Wholesale Code only pertains to commercial arrangements and conditions of carriage regarding traditional undertakings, but they also maintain that the online streaming market lacks the issues that the Code was designed to address when it was created. Neither Prime Video nor Amazon music are “broadcasting system ‘gatekeepers,’” their parent company argues. “Streaming services do not have the control over broadcasting distribution or economic incentives to prevent programming content from reaching Canadians.” MPA-Canada echoed Amazon’s stance, explaining that “online undertakings have the incentive to ensure the widest distribution possible, so that all Canadians can access their services.” “Moreover, the commission's ‘net neutrality’ regime ensures that are unable to unduly limit access through traffic management practices that discriminate among content,” said the group. Among their challenges was also the application of undue preference principles, meant to prevent broadcasters from giving an unfair advantage to themselves, or from subjecting others to an unfair disadvantage. They again argue that these regulations are unnecessary as online services do not present the same anti-competitive concerns as traditional broadcasters. MPA-Canada highlighted instances where the undue preference framework was “inappropriately used … to address issues that are contractual in nature.” The group argues it could be used to “attack legitimate business models under the guise of alleged harms for which there is no evidence.” “Given the potential for abuse, an undue preference framework - especially one meant to address historical behaviour by legacy linear players - should not be applied to online undertakings,” the group argued. “Current broadcasting undue preference situations largely relate to linear carriage concerns such as channel placements and realignments that have no relevance in an online environment.” While they did not suggest any changes that could be made to the undue preference framework for it to work in the context of online streaming, Amazon and others urged the CRTC — if it does extend the undue preference rules — to make sure they prioritize stimulating competition. Resistance to data gathering Streaming services challenged the CRTC’s suggestion of imposing data gathering and sharing requirements on broadcasting undertakings. In its notice, the CRTC said that a lack of data, such as viewership and listenership data or program guide data, could make it harder to measure performance or create a disadvantage during commercial negotiations. The regulator asked if it should create a data-sharing framework for all undertakings. MPA-Canada returned to its position that the CRTC has “very limited powers to interfere in the commercial and economic relationships of online undertakings.” If the main goal of data sharing is to facilitate negotiations, “it would be inappropriate to mandate any such data sharing by online undertakings to other broadcasting undertakings,” the group wrote. While cautioning against potentially “unduly burdensome” data gathering requirements, Amazon raised concerns about publicly sharing its information, citing risks of harm to its commercial interests. “Amazon does not publicly disclose its Canadian financial information, program viewership or listenership data, which is generally closely-guarded and treated as commercially sensitive across the industry,” the company wrote. MPA-Canada did, however, call for program guide data, which includes details on the programs available to audiences, to be available and accessible to everyone. The CRTC will hear more arguments from different players in the broadcasting industry during a hearing scheduled to start on May 12. phalentm@thewirereport.ca

‘Outdated’ regulatory tools unsuitable for online environment, streamers tell CRTC

Broadcast |
By Phalen Tynes-MacDonald
| March 19, 2025

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

‘Outdated’ regulatory tools unsuitable for online environment, streamers tell CRTC

Broadcast | By Phalen Tynes-MacDonald | March 19, 2025

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Local providers key to broadband rollout, CanWISP told

Telesat, feds announce new Gatineau campus

Iristel, Bell still in dispute over repayments, disconnections

Ford cancels Ontario Starlink deal, bans US companies from procurement in response to tariffs

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Broadcast |
By Phalen Tynes-MacDonald
| March 19, 2025