OPINION: Distribution Issues – The Hole in Bill C-11

Submitted by:

Brad Danks, CEO OUTtv
Monika Ille, CEO APTN
Luc Perreault, Strategic Advisor, Stingray Group

The Senate Transport Committee is starting its clause-by-clause review of Bill C-11, an Act to amend the Broadcasting Act. Hours of Committee time have been spent on the scope of the Bill and how it would apply to digital first creators and social media platforms. This is understandable and appropriate.

Far less time has been spent on a weakness in the Bill that will have a much more profound impact on the Canadian broadcasting system and the content Canadians can access. This weakness is how the Bill treats the distribution Canadian programming services and apps by OTT platforms and virtual BDUs.

Independent broadcasters of all stripes, public interest services like APTN, AMI, and TV5/UNIS, the Canadian Association of Broadcasters (CAB), FRIENDS, distribution companies such as TELUS, Bell and Canadian Communication Systems Alliance (CCSA) and the CRTC agree (though sometimes on different points) – the Bill needs to be fixed to address distribution issues. What are these issues?

First, public interest services like APTN rely on distribution orders made under section 9(1)(h) of the Broadcasting Act. The CRTC requires these services to be distributed and, often, it sets terms of carriage. Bill C-11 would not permit the CRTC to set terms of carriage in an online environment. Instead, these services would have to negotiate “in good faith” with the massive global platforms like Google, Apple and Amazon – and also with the emerging Canadian virtual BDUs that are just over the horizon. This is a two-tier approach and it will – without any doubt – weaken public interest services and the broadcasting system.

Non-commercial services – with important public mandates and which, by their nature, provide less commercially oriented content – will always be at a profound disadvantage in any negotiation with any platform. This is why CRTC distribution orders, setting terms, have always and will continue to make good policy sense.

Second, Bill C-11 takes away the CRTC’s existing authority to engage in dispute resolution involving online services. This is a highly concerning omission. This will leave the CRTC with limited practical authority even as global platforms gain an increasing foothold in the Canadian market. Let’s not kid ourselves – they will become dominant.

Heritage officials rationalized this omission by suggesting that the CRTC’s existing dispute resolution authority was put in place because of Canada’s concentrated and vertically integrated traditional broadcasting market. They suggest the online world is somehow different. This is not the case.

The CRTC’s existing authority dates from the 1991 Act. This authority was put in place long before the current levels of vertical integration and concentration of ownership in the broadcasting industry. The CRTC’s dispute resolution authority recognizes the inherent tension between distribution entities on the one hand – and programmers seeking access to distribution on the other. Vertical integration, as such, makes this relationship even more fraught. But there is always tension.

In any case, the idea that dominant global platforms don’t raise as significant or even greater access concerns for Canadian services than cable or satellite companies is not credible. Timothy Wu put that issue to bed long ago in his book The Master Switch – and regulators around the world are now grappling with access issues involving global platforms.

The CRTC’s dispute resolution tool is essential to resolving gatekeeping issues in the broadcasting distribution environment, online or not – whether it is a programming service seeking to access a key platform on fair terms; or a distributor seeking access to key programming content.

These issues are endemic in any network environment including the Internet and compounded in Canada by the high level of concentration of ownership and cross-ownership in the communications sector and the unequalled scale of the global web giants. To think otherwise is naïve. The CRTC should have the authority to resolve disputes in an online environment to serve the public interest.

Third, the CRTC should have general authority to regulate questions surrounding the carriage of Canadian and other services by online distributors. In the past, this authority has been essential to cover activities such as ensuring local television services are distributed locally; providing access to distribution platforms for multicultural Canadian programming services; providing access to distribution platforms for independent programming services; ensuring fair treatment of services and protecting consumers during disputes (e.g. the “standstill rule”); and providing for other consumer protections. It is due to the CRTC’s authority to regulate distribution that we have the diverse broadcasting system that we have today. Bill C-11 takes it away.

Meanwhile, in the United States, we see that the FCC continues to consider whether online distributors should have obligations to distribute local television services to support ownership diversity in that market. In the United Kingdom, the government has released a white paper that contemplates giving Ofcom (The Office of Communications) express authority to require carriage of UK services by online platforms and dispute resolution powers.

In Canada, we are going in the other direction – and for the life of us we cannot understand why. Why would we eviscerate the CRTC’s authority at a time when Canadian programming services are facing the daunting challenge of surviving – and thriving – online?

Canadian services develop, produce and exhibit an incredible range of Canadian programming – in English, French, Indigenous languages and a wide range of third languages. They serve all Canadians in our society. Canadian services employ thousands of Canadians and contribute billions to our economy.

Global platforms like Disney+, Netflix, Amazon and others are no substitute for the diversity, depth of content and economic benefit provided to Canadians by Canada’s own broadcasting services. We cannot rely on foreign services to do what Canadian broadcasters do.

The objectives of amending the Broadcasting Act should include making it better to create opportunity for Canadian services to thrive in an online environment. The objectives should include futureproofing Canada’s cultural sovereignty in our own media.

The changes to Bill C-11 that we have proposed to the Senate Committee are targeted, modest, and absolutely fundamental to the future of Canadian broadcasting.

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Since 2016, Brad Danks has been the CEO of OUTtv Media Global Inc. (OMG), the world's largest producer and aggregator of original LGBTQ+ film and television content. Brad began his career as an entertainment lawyer with a distinguished practice that included working for many U.S. and international studios, broadcasters and financiers. He joined OUTtv as COO in 2006 where he worked to grow the business in Canada until becoming CEO in 2016. He was instrumental in initiating OMG's international expansion, developing platform partnerships with Amazon, Apple, Roku, Tubi, Fuse, Showmax, 7plus and TVNZ. Headquartered in Vancouver, Canada, OMG owns the brands OUTtv and FROOTtv, serving many territories around the world including Canada, the United States, the United Kingdom, Australia, South Africa, New Zealand and across Europe. Brad is an adjunct Professor of Law at the University of Victoria, frequent speaker, writer and guest lecturer at conferences and academic institutions on the evolving media landscape.