Senate Hearings on Bill C-11 – A Look at the Fifth Hearing (First Segment)

The special coverage of the Bill C-11 hearings is continuing. This is the first of two hearings for the week.

We are now moving up to week two of the hearings. While it is unclear how many weeks this will take place, we do know that it is happening this week. Earlier, we got a chance to look over the schedule for this week and it appears to be a reasonable balance this week between those who support and those who are against. This, of course, is a follow-up to the previous week which was more heavily skewed to those supporting the legislation.

We’ve been offering wall-to-wall coverage of these hearings and you can look at the coverage of last weeks hearings below:

Hearing 1 – Privacy Commissioner and Global Affairs/Justice Department
Hearing 2 – Digital rights organizations and lobby groups (1)
Hearing 3 – Lobby groups (2) and platforms
Hearing 4 – Lobby groups (3) and lobby groups (4)

So far, we see lobbyists representing legacy corporations and their related organizations represented 4 times now – far more than any other representative. Many have openly remarked just how much access these organizations actually have over this whole process. So, it’s probably not a surprise how much there is over-representation for them in these hearings so far. It is, of course, early days, so it’ll be interesting if the hearings diversify to include others affected by the legislation – ideally some representation from digital first creators.

As always, you can follow along with the hearing we are listening to in this recording. While we will try to summarize and offer thoughts on what we are hearing, nothing will beat the actual video and transcript in terms of thoroughness of what went down. Still, we hope that this will offer some good context and insight into the hearings as they unfold.

Opening Remarks

Monika Ille of the Aboriginal Peoples Television Network (APTN) opened her remarks first. She says that she and her organization supports Bill C-11. She says that Bill C-11 updates the Broadcasting Act for today. From there, she says that there is a gap as it relates to online distribution of APTN. The gap she refers to is the fact that online platforms are not required to distribute APTN. She laments the idea that the CRTC won’t be able to determine the conditions for distributing APTN on online platforms, but rather, simply relies on ‘good faith negotiations’ instead.

As a result, she says, this will result in a path to decline for APTN. She says that APTN is not in a position to negotiate with large platforms and that the CRTC can’t set the terms for distribution of APTN. (or, you know, you could just post your stuff on YouTube? No one is stopping you.) She says that this gap must be filled.

Nancy Juneau of the Fédération culturelle canadienne-française then opened with her remarks. She says that access to creators and distributors is a privilege. As a result, a condition needs to be set to contribute back for the privilege of exploiting these goods. She says that all of this is under threat thanks to the stranglehold of large web giants. Because of this, culture, language, and minority culture is under threat as a result.

From there, she calls Bill C-11 a step forward and they strongly support it in its current form.

Marie-Christine Morin took her turn in the opening remarks and said that it is important to preserve the achievements of the work done so far in Bill C-11. She called for more protections for minority languages across the large players including the large web giants. She then started talking about Bill C-13.

Brad Danks of OUTtv then opened with his remarks. He said that in response to the changes in the world of broadcasting, companies need to invest heavily in original programming in order to remain competitive. He laments how expensive and risky such a proposition is, but acknowledge that this also opens up global opportunities as well. So, he says, that to justify the investments of this content, he must have the distribution in place to sell it to audiences.

From there, he notes that platforms like Disney+, Amazon Prime, and even Canadian streaming platforms don’t allow you to just upload your own content. You need to negotiate contracts first. They are the new gatekeepers in the system. (It’s almost as if Disney+ set up their streaming service to distribute their own content. I know, that’s just crazy talk.) He says that there are signs that the American market for streaming services is tightening, making it harder for newer services to compete.

According to him, with no requirements to offer Canadian services in Canada, there is a very real fear that Canadian services will get locked out of their own market. He says that there are reasons for platforms to not carry certain kinds of content. One reason, he cites, is that platforms don’t care about Canadian diversity. A second reason is that these services don’t want to carry content that they consider competitive to their own (as is their right as a private company). A third reason is pay for play deals where broadcasters pay for carrying their content.

In response, he says that Canada can do something to curb what he calls “market abuses”. He calls for “horse trading” deals where preferred deals can be reached so that each other’s content can be distributed on each others platforms. He says that online distribution is becoming more like traditional broadcasting. He calls for the CRTC to ensure that Canadian services are treated fairly.

After, he calls for the CRTC to be able to settle disputes among other things. He says that the CRTC “can do this”. (Only a small leap to say that because the CRTC are experts in broadcasting, that makes them experts on the internet.)

Questioning the Witnesses

Senator Leo Housakos opened up questions. He notes that multiple organizations before them today call for players to partake in the financing and discoverability of Canadian content of high quality. In reality in this digital era, Canadian YouTuber’s are among the biggest Canadian cultural exporters in the world. About 90% of their audiences is from abroad. He notes that Spotify testified that they had 2 million Francophone listeners on their platform. At the same time, no other country imposes discoverability requirements on platforms.

He then asked that if Bill C-11 is adopted as-is and other countries started adopting similar pieces of legislation, how would Canadians react? For instance, if France adopted similar laws and Canadian Francophone creators suddenly become invisible. Is this not a danger for the Francophone market?

Morin dodged the question by saying that there are challenges for content to be discoverable, but we have to focus on Canadian content as a topic. She re-iterated the demand that platforms contribute to the development of Canadian content and the livelihoods of artists.

Juneau said that the previous answer was a good answer (LOL! Welcome to Family Feud: Senate Witnesses Edition).

Senator Housakos then followed up by asking that if this legislation is put in place to reduce opportunities for artists and creators to distribute their content on the international level, then is there not a risk that other countries would respond in kind. So, if France passes a similar bill, would there not be an impact on our artists to explore and exploit the international market as they are doing now with these new platforms?

Morin changed the subject and said that when it comes to algorithms, there is work to be done. She says that works needs to be done to ensure the discoverability of Francophone content in Canada and abroad. After all, she claims, algorithms are guiding users to content against their own will. (Pretty sure algorithms don’t make users click on videos and algorithms don’t prevent people from clicking away, but what do I know? I’ve only been working with the digital environment just about my entire life.)

Senator Paula Simons asked if the networks are looking for the CRTC to mandate carriage of their whole network or working on deals to buy some of your individual programs?

Danks responded, saying that they want services like Disney+ to carry their entire network (Yeah, and I demand the same subscriber count as PewDiePie on YouTube with mandatory viewings of my video’s and ensuing ad revenue, but at least I know how ridiculous such a demand sounds.) He then admits that they have a deal with Amazon and Apple TV to carry everything (which pretty much proves that this bill is unnecessary).

From there, he admits that there is an unlimited potential for these platforms to carry content. The only limitation is bandwidth which hasn’t really been an issue for 15 years (Uh, I’d peg that to more like 5-7 years. Streaming video back in the mid to late 2000’s was still problematic and required significant compression compared to now.)

He then spoke about “fast channels” which are linear TV streams such as Pluto TV looking to add content streams – and even open to supporting his channel. However, he says, as markets mature, you get bullied out of the system and you either don’t get access or you don’t get access to fair terms. He says that laws need to be put in place saying that if they want to enter Canada, then they need to carry Canadian streaming services. He says that it’s not hard for them to do and it doesn’t cost them anything to carry their content (presumably minus bandwidth, service maintenance, database maintenance, server maintenance, facility maintenance and storage. Apparently, that’s all free these days, though.)

He says he doesn’t understand why everyone says it’s a big ask.

Senator Julie Miville-Dechene noted the mentioning of algorithms, however, she says that because of the controversy that this has provokes, the act no longer touches algorithms (the bill still dictates outcomes of algorithms. No idea why the Senator made such an assertion). She said that a Francophone work might not be watched by someone elsewhere in the world because they are not interested in Francophone content (or maybe they don’t speak French?). So, for her, there is a paradox that if this happens, the algorithms will potentially downgrade the prominence of that content. As a result, views would go down. So, the question is, how does one analyze that situation because this hasn’t been tried anywhere else in the world?

Morin responded that it is true that the legislation doesn’t allow for the intervention of algorithms, but she notes how others have commented on compulsory distribution or Canadian content requirements (are we even on the same wavelength of what is in the bill anymore?). She says that maybe this won’t go into the bill, but rather, the regulation which would have to be put forward by the CRTC (I think this is in reference to the implementation, not that this answer makes that much more sense with that in mind.)

She then admits that there is a paradox to be had here, but she admitted that she has no answer to that. (Probably because this effort creates problems as opposed to solving non-existent problems such as forcing content onto users that don’t want to watch that content.)

Senator Miville-Dechene followed that up by noting that this legislation creates distribution obligations, however, does this create problems with the USMCA trade agreement? (This is one of the golden questions about this bill and something Global Affairs earlier failed to answer) Also, is there a fund available that doesn’t exist that can be come up with so that broadcasters will have sufficient resources to survive?

Ille responded that this is something they’d like more information on. Who would be contributing to this fund and what kind of funds we are talking about. She further notes how it’s unclear about other details of such a fund. (Real big surprise she dodged the USMCA question completely.)

Senator Rene Cormier and Morin discussed appeals and engaging with the CRTC and Section 5.2.

Senator Cormier then asked about obstacles currently facing OutTV and further details about that.

Danks responded that he didn’t want to name names, but one service not a tech platform denied them outright. He then said that two equipment manufacturers out of Asia also denied their content. He offered to provide details in confidence, but it’s not something he would be willing to provide publicly. (As far as I’m concerned, that is a business decision on their part as much it is a business decision for Twitter to ban someone for harassing a user. It sucks being denied, but does that give you the right to overrule their decision on how they want to conduct business? Not really.)

Another Senator (didn’t get his name) mentioned the APTN’s concerns about Bill C-11. He asked what those concerns are and what corrective measures are being proposed to fix these concerns as well as how critical it is to address those concerns. He also asked about the impact of not addressing them.

Ille responded that linear TV is slowly fading away and that people are migrating towards the online environment. She said that APTN is not market driven and, therefore, can’t negotiate with the big platforms to mandate distribution. As a result, big platforms are only going to pay pennies and, as a result, indigenous programming is going to slowly fade away.

Senator Donna Dasko commented that they are drilling down into the incredible marketplace deeper and deeper. She then asked about further details in his position on what the CRTC should do. She said that on the one hand, what is being asked is for OutTV to be able to negotiate, but it sounds like what is being asked is for the CRTC to set the conditions for the terms of trade with online streamers. So, what specifically does he want the CRTC to do?

Danks responded that he doesn’t want the CRTC to negotiate the deals, but rather, that the CRTC has their back. Specifically, the CRTC can make sure that if the terms aren’t fair, then the CRTC can step in (so, in other words, “gimme everything I want or else”?).

As an example, he says if they approach a service and they say they don’t want to carry the content, then he can say that the CRTC mandated that they do. In response, the service says that they don’t want to pay for the content, then they can go to the CRTC and say that industry standard is 50/50, so the CRTC can say no more than 50% revenue sharing. (So, by that logic, I should demand OutTV carry my YouTube content and demand 50/50 revenue out of it as well, because I see that as fair. Let me guess, despite it basically being the same thing, the ol’ “yeah, but that’s different” excuse will get pulled out.)

Senator Dasko then asked if this would happen on an ad hock basis or if there would be a rule set out for a whole set of firms and players.

Danks responded that the CRTC should create the structure and if negotiations fail, then mediation and arbitration would then take place. He said that negotiations with platforms are easier anyway because traditional broadcasters have to contend with packaging deals as well.

Ille chimed in saying that APTN is mandatory carriage and they are hoping for an internet equivalent to a mandatory carriage and fixed rate.

Senator Bernadette Clement asked that, apart from Section 5.2, are they happy with the bill as-is. Further, she mentioned something about different stakeholders confidence in the CRTC (this got slightly clipped in the English interpretation, though it was clearly not the fault of the interpreter as the change from French to English was so quick). She asked about their confidence in the CRTC or whether the CRTC would require additional capacity to address some of the issues being raised. (This is another huge core issue about this debate.)

Juneau responded, saying that their sector is very satisfied with Bill C-11 in its current form.

Ille chimed in and said how great APTN is and how they shake up the industry. She then circled back towards the CRTC question and said that she believes the CRTC has the expertise and knowledge. She thinks they may need more resources, but she admits that she’s not an expert in that area (which is fair. You can hardly ask such a witness about the capacity capabilities of the CRTC. At the same time, this also puts into question the confidence in their abilities to regulate content the internet at all because if you don’t know about their capacity, how can you make an opinion on their expertise?)

Senator Simons commented that she understands the concerns about not wanting to be shut out of the market. At the same time, she said that she is concerned that networks present are proven, well-established networks. If the streaming platforms are being asked to carry all of these networks content, at what point can the platforms say that this is an inappropriate choice for our market? What about the question of platforms being forced to carry something they don’t want to?

Danks responded, saying that at some point, the CRTC will have to make sensible decisions. He says that OutTV is an important diversity brand, so they are the ones that get the nod to. He admits there will be other services out there, but they can go to YouTube and post their content there to gauge audience potential. The CRTC can say that ‘these 25 services are essential’, but those other services will have to negotiate on their own. He suggests that this is something that will have to be touched on further down the road.

Simons commented that the 9.1 (H) content is something that was decided that is mandatory carriage by someone. There may be kinds of content that would be a rather odd fit.

Ille responded that but they are carrying Canadian channels and that these channels are being served in the Canadian market. So, she says she should assume that those channels should be available to the Canadian audience. This is about Canadian identity and culture and that those American services need to be respectful of those whom they are serving.

Danks chimed in, saying that Sony had announced the carriage of 1,600 services in different countries. He comments that there has to be some degree of commercial viability and if they aren’t commercially viable, then they would have to get by on advertising alone. (Weird argument because the overarching theme in all of this is that the entire cultural sector is not commercially viable without intervention. So, is this not an argument against mandatory carriage of all Canadian content?)

Senator Cormier had an exchange that ultimately ended up covering what was previously discussed.

Senator Miville-Dechene asked how does one pick and choose which channel is considered mandatory carriage further down the road and how does one expect the platforms to carry such channels. The problem is that they are trying to freeze these regulations over a period of time, so the question revolves around flexibility.

Ille responded that there has to be a place for small independent broadcasters. Things like merit for a digital platform (among other things) would have to be considered. The CRTC has to be able to make these decisions.

Senator Dasko commented that one of the witnesses wrongly spoke in support about the ability to affect and change algorithms. This in respect to the topic of discoverability. She said that there has been tremendous pushback on the use of algorithms even though the bill does not require that – although the CRTC chair muddied the waters on that. She said that, in the bill, that cannot be done. (No, the CRTC Chair was correct that Bill C-11 mandates specific results of algorithms). She then asked if it is possible to achieve discoverability without intervening in algorithms.

Morin said that she’d have to get back to her on that as she doesn’t know about non-algorithm solutions.

Danks chimed in, saying that discoverability is about a whole lot more about algorithms, but he says that the whole discussion about algorithms has hijacked the discussion about Bill C-11 in a way that doesn’t make any sense (Yeah, the text of the bill and reading comprehension has a way of getting in the way all the time. How annoying!) For him, discoverability is about being treated fairly in what he believes in network neutrality principles (this is literally the opposite of network neutrality principles because this is really about preferential treatment).

He then said that he is against preferences that are applied to algorithms (LOL!). He then said that this whole discussion about algorithms is such a waste of time (I agree, let’s strip those requirements out of the bill and be done with it). The reason, he says, is that even if it is tried, he doesn’t believe it would work. He said to not stop talking about it because it’s never going to work. (weird flex to shoot down the whole premise of the bill.)

From there, he says that YouTubers are not going to be crushed as users are not going to click on those links. He said that it’s not even as intrusive as an ad appearing in front of content. Instead, he says that we have to be careful that the platforms don’t preference their content over other people’s content. He said that it simply won’t work (messing with algorithms).

Senator Housakos asked the APTN if the government consulted them before moving forward on Bill C-11. Ille responded that when the bill was known as Bill C-10, they were and that they were doing lots of meetings with Canadian Heritage.

With that, the hearing was adjourned.

Thoughts on the First Segment

After hearing that, my initial reaction was, “Wow, just wow.”

Here you have networks just nakedly demanding a massive market intervention so that all the platforms must carry the content of traditional broadcasters. Further, they were just plainly admitting that their content isn’t widely watched. This feeds into the argument that this whole legislative push is about pushing content people don’t want to watch onto users.

Further, it’s remarkable just how open they all were about demanding private streaming services to not only carry their content, but promote it on all of their home pages and demanding to be paid for it as well. It’s about as brazen as it gets in terms of demanding everyone else do all the work and they get all the rewards for it. They can talk about “fairness” all they want, but their version of “fairness” is forcing platforms to shove their content down as many throats of users as possible. The obliviousness of so many people in the room about this ask is quite stark.

Danks in particular did a heck of a job unknowingly torpedoing the justifications of this bill in the process of defending it. His defence of the bill is so bad, it is incredible. The fact that he openly remarked that services need to show financial viability to be considered for special market privileges really ran counter to the argument that without this bill, none of the broadcasters can survive. If anything, that is an argument against these networks even getting such privileged access in the first place.

Additionally, Danks was sitting there saying how it was so impossible for networks to get deals, then in the same breath, brag about how his organization has negotiated deals with a multitude of networks. The legislation is one or the other. Either his network can’t get deals done and needs a massive market intervening law to come in and get these negotiations done, or deals are being struck, meaning there is no point to this bill. It’s one or the other.

Another particularly brutal part of the discussion was Danks commenting on negotiations and the CRTC. On the one hand, he said that he doesn’t want the CRTC to do the negotiations. The broadcasters should be able to do that on their own. At the same time, he said that the CRTC should say that the platforms must carry their content, must share the revenue, and must have at least a 50/50 or better revenue split. You know what those demands are? Negotiations.

Lost in all of this is the concept of compelled speech. By saying that platforms “must” carry content (or “compulsory” carry), you are ultimately treading into the territory of compelled speech. This is because the government is effectively demanding that certain kinds of hand-picked content be promoted on a private property. If that is not compelled speech, I don’t know what is. Further, there is no argument of scarcity to justify this compelled speech much like how there was a scarcity of channels many decades ago. So, when that argument doesn’t hold, is that even legally viable.

Additionally, I found it especially telling when core concerns and core problems were essentially dodged by the witnesses. Does the CRTC have the capacity to regulate the internet? The question was pretty much dodged (spoiler: They do not.) Does the legislation violate the USMCA? That question was dodged. (Spoiler: It does violate the USMCA)

Hilariously, an argument was put forward that algorithms aren’t even part of the bill. I think the arguments went so far as to say Bill C-11 doesn’t change anything on the platforms, only that Canadian content is more visible. So, in other words, we are changing the results, but we don’t count it as changing anything on the platform because it is our content being promoted, so please stop paying attention to the man behind the curtain.

Ultimately, the witnesses were quested to defend Bill C-11. If the hope was to show the Canadian public that Bill C-11 doesn’t do the things critics say it does and does what they says it does instead, it was a complete and utter fail. This defence was a massive trainwreck whether certain senators realize it or not. It was so bad, I have to split the second segment off for another day because it took so long to describe what an abysmal effort that was. So, stay tuned for the second half tomorrow as I dissect the other half.

Drew Wilson on Twitter: @icecube85 and Facebook.

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