CRTC Consultation: Apple Calls for Flexibility in Online Streaming Act

Our coverage of the CRTC consultation of the Online Streaming Act continues. Today, we are looking at what Apple had to say.

Throughout the CRTC consultations, certain themes are emerging.

From the online streaming side of things, online streamers are asking for flexibility which recognizes the contributions they are already making in Canadian culture and society. This was reflected in the hearings featuring Google/YouTube, Spotify, Netflix, Paramount, and Amazon.

From the traditional broadcasters and producers, however, they want to steal all the streamers investments and keep those ill gotten gains for themselves. This while holding up the streamers Canadian audiences up for ransom. This was reflected in the hearings featuring Bell, Rogers, Corus, and Shaftesbury. This under the false claims that streamers don’t contribute anything at all in Canadian society (to which there are mountains of evidence that says otherwise).

Also making an appearance is Digital First Canada that has long pushed for a regulatory system that doesn’t hurt Canadian digital first creators. At this point, though, it’s a long shot effort given that the entire point of the Online Streaming Act is to, in part, destroy the careers of Canadian creators, sacrificing those careers at the economic altar so legacy media can continue to have monopolistic powers over their audiences. Canadian creators were also present at the hearings trying to make their case as well for why they should be allowed to continue to have a career.

These themes continued during Apple’s appearance at the CRTC. The transcript that we are following can be found on the CRTC website. The opening remarks are pretty much like the other streamers remarks. Apple showcased how their services help creators find audiences. They highlighted their programs they are running to help such creators. What’s more, they highlighted their other investments they have made in Canada. The opening remarks largely were Apple trying to avoid most of the contentious issues, instead, just focusing on what they contribute to Canada.

The more “juicy” parts of the hearing came up during the question and answer phase. One of the commissioners wanted to get in to what Apple means by flexibility. Unsurprisingly, Apple more or less commented that they wanted a system that already recognizes the contributions they are making in Canada (something the other streamers had been calling for already earlier on in the hearings):

8812 COMMISSIONER LEVY: Good afternoon and welcome. Very happy to have the chance to lead off the discussion.

8813 Let’s start with your first principle, which is flexibility. You want to determine for yourself where your contributions should go, but we’ve talked a lot over the past couple of weeks about some types of content such as news which are very difficult to sustain but are, of course, extremely important to the Canadian broadcasting system.

8814 If we allow all online streamers to contribute however they want, how do we ensure that important content such as news is still supported and who should contribute to these types of content?

8815 MR. POWDERLY: Thank you, Commissioner. As a first point, I think when we say flexibility, I don’t think we’re saying it’s a free‑for‑all and the wild, wild west. I think what we’re saying is we understand that there ought to be some options at some point, but we want to work with you to make sure there’s guard rails in place and the framework gets developed the best it can.

8816 Second, on news, if I can address that for one minute, so Apple does believe in the importance of quality independent journalism and we support that in Canada today. And if I could talk about the Apple News app for one second.

8817 So Apple News is an appt that comes on our devices and, in it, you can find work from publishers in Canada and around the world. There’s over 140 Canadian publications on Apple News right now, and the way it works is a publisher chooses if it wants to publish its work on Apple News. It’s not like we go out and get it and push it out. And if they do that, they get 100 percent of the revenue generated by that article.

8818 There’s another service called Apple News+, which is a subscription service, which is really magazines and newspapers. Again, up to the publisher if they want to be in and, if they are, again, 100 percent of the ad revenue plus a share of the subscription revenue.

8819 So we are focused on supporting journalism. We think it’s very important. We have teams of Canadian editors in Toronto and Montreal who, you know, curate the sites for us and are committed to doing it.

This is definitely another pushback on the claims that streamers contribute nothing to Canada. In fact, Apple is going further in challenging the notion that news producers get nothing from online platforms by highlighting what they do specifically for news producers.

Further into the question and answer section, Apple found itself having to point out that there are major differences between broadcasters and internet services. It’s basically akin to saying that the sky is blue on a sunny clear day. The problem throughout the debate is that the Online Streaming Act thinks that the internet is no different than traditional broadcast television. The bills backers have been pushing a similar notion even though there’s evidence as far as the eye can see that the internet is, in fact, different than broadcast television.

By passing the Online Streaming Act, lawmakers generally rejected the notion that the internet is any different from broadcast television and, as such, think it’s perfectly fine to apply old, outdated, broken, and often backwards broadcast regulations onto the comparatively new internet/digital environment. This despite the many experts warning that this is a terrible idea and that lawmakers should craft a bill that actually recognizes what the internet really is. It’s a call for common sense, but lawmakers have generally rejected those calls for common sense.

So, it’s probably no surprise that Apple would be yet another voice calling for a system that recognizes what the internet actually is and regulating accordingly. From the transcript:

8837 COMMISSIONER LEVY: Next, I’d like to ask you to elaborate on how imposing lower requirements on online undertakings aligns with the trends of increased revenue and increased market share for such undertakings.

8838 You have significant market share in Canada, I would say. And also elaborate on the ‑‑ how online undertakings must contribute in an equitable manner along with other broadcasting undertakings to the objectives of the Broadcasting Act?

8839 MS. WESTIN: Thank you for the question, Commissioner Levy.

8840 So we believe that the contribution framework should be appropriate to each nature of the service and equitable.

8841 In our view, when we’re thinking about an equitable approach, it’s really recognizing that there are not only key differences between traditional broadcasters and online undertakings, but also between online undertakings themselves.

8842 So we believe that, according to the Act, the Act recognized this distinction, for example, how Canadian broadcasters should make maximum use of Canadian creators and human resources, so we believe that there should be a distinction between online undertakings and traditional broadcasters.

8843 We also understand that there are key differences. For example, online undertakings operate in a very global and dynamic and high competitive market, allow, for example, to provide access of content ‑‑ of, you know, a much larger catalogue of content to customers in comparison with traditional broadcasters, much of this content that wouldn’t otherwise be distributed in a traditional broadcaster distribution. So we believe that those differences must be taken into account in order to establish an equitable framework.

What’s probably depressing in all of this is the fact that, after years of debate on this bill, we are still in a place where people are fighting to point out that the internet is a very different medium from traditional broadcasting. You would think that this is just a given at this point that, yeah, duh, there’s a very big difference between the internet and, say, radio broadcasting. No, we are stuck with having to try and educate those in power on what the internet is. It’s pretty embarrassing in a number of ways, really. A part of me actually wonders if the Internet black box troll from the IT Crowd would work on some of the commissioners at this point.

It’s partly why I don’t exactly have high hopes that anything good will result with these hearings. In an ideal world, the CRTC would be filled with people who have actual working knowledge on how these online services and how the general internet works these days. You would think that the questions would revolve around very specific aspects of the online services offered by companies like Apple. Instead, we get comments about how they aren’t really experts on this stuff and sometimes get questions about how the basic internet works. These are really ultimate signs that the CRTC has no business in regulating internet services. The CRTC has about as much credibility in regulating internet services as I would in regulating traditional farm equipment. Unless there is a serious effort in understanding all the ins and outs, then neither of us have any business in putting our nose in places where it doesn’t really belong.

At any rate, Apple is ultimately asking for many of what the other platforms are asking for. That is a contribution system that recognizes the contributions that the platforms are already making. This as opposed to just being forced to cough up a massive stack of cash as if they were being parasites in the system all this time. It’s not an unreasonable ask. Unfortunately, the streamers aren’t exactly debating against reasonable people and organizations.

What’s more, the CRTC is dealing with organizations that can very easily just pull up stakes and leave the country altogether. This isn’t exactly territory they are all that familiar with. Normally, the CRTC can make a ruling and the companies just have to live with whatever the CRTC decides. This is because the CRTC is more accustomed to regulating companies that are based in this country. The streamers, however, don’t have to live with whatever ruling the CRTC conjures up. They can leave the country if the cost of doing business suddenly gets too high. That was plainly demonstrated when Twitch left South Korea over obvious BS “networking fees”. If streamers can do something like that in South Korea, they can certainly do so here in Canada. Whether or not the CRTC recognizes the position they find themselves in, however, remains to be seen.

Drew Wilson on Twitter: @icecube85 and Facebook.

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