Senate Hearings on Bill C-18 – A Look At Hearing 9 (Segment 2)

We are continuing our special coverage of the Bill C-18 senate hearings. This covers the second segment of hearing 9.

(Note: This hearing took place before it passed the House of Commons and Meta’s announcement that it will block news links. Comments and analysis will rewind things and pretend that the bill hasn’t yet passed along with the events that unfolded afterwards.)

We are getting close to the end of these hearings now. We are now rounding the final bend on the track and getting ready to head down the final stretch. We’ve heard a lot of stuff at the Bill C-18 hearings at the Transport and Communications (TRCM) committee. Some things more interesting than others. So, we’ll find out what was said closer to the end.

Before we get into this hearing, we wanted to showcase the previous hearings we covered to date.

Past Hearings Covered

Hearing 1 – Heritage Ministry officials / Lobbyists (1) / Konrad von Finckenstein
Hearing 2 – Missing/Not Available
Hearing 3 – Michael Geist / Peter Menzies / Lobbyists (2) / The CRTC
Hearing 4 – Alphabet / Google / Meta / Facebook
Hearing 5 – Lobbyists (3) / Lobbyists (4) / Western Standard
Hearing 6 – Lobbyists (5) / Lobbyists (6) / Dwayne Winseck
Hearing 7 – Lobbyists (7) / Digital News Organizations
Hearing 8 – Australian lobbyists / Lobbyist (8) / OpenMedia / Internet Society Canada Chapter

We also covered the first segment of hearing 9 and, well, let’s just say it was a bit of a swing and a miss. It might have been interesting to hear the perspective of indigenous organizations, but the problem is that the witnesses that happened to be there was, well, seemingly less than perfectly well informed of what this bill is about. Still, the questions were quite thought provoking and, at the very least, added a lot of food for thought in this debate, so it wasn’t a total loss.

Now, we move on to this hearing. As always, the video we are following can be found here. We’ll offer a detailed summary as well as thoughts and analysis in brackets. This along with some concluding thoughts. Feel free to watch the hearing yourself or read what we have to offer below. So, with that, enjoy!

Opening Remarks

David Skok of The Logic opened with his remarks. He said that they are an independent small business with no lobbyists, no trade association backing, and no allegiance to any startup or legacy interest (you are a lobbyist). In over 25 years in working in the media, he’s been in the middle of the evolving relationship between big tech and publishers – which brings him to Bill C-18. He asks the senate to please approve this legislation without delay (because he can’t destroy his own business fast enough, no doubt). While it is not a perfect bill, it will level the playing field (it will not) in three key areas.

First, Skok said, Bill C-18 is a backstop forcing publishers and platforms to come to the table for fair and equitable agreements that don’t privilege only those with negotiating power (no, it screws over publishers much more equally.) Secret deals already exists between big tech and their chosen news companies, significantly distorting competition and further tilting the playing field in the platforms interests (and Bill C-18 makes this problem worse). That’s not just in Canada, by the way. Around the world, big tech is throwing money at their preferred publishers in an effort to avert legislation. In the process, they are picking winners (Bill C-18 also picks winners and losers, but puts that power in the hands of government), hindering competition and innovation in an industry that citizens rely on for information.

Just last month, Skok said, it was reported that the New York Times received $100 million from Google over three years. As a colleague from the Globe and Mail told this committee that it’s deal with Google gives them tremendous benefits, not just in terms with cash, which they used to fund their operations and hire staff from other news outlets, but also preferential visibility in Google search and consulting on optimizing their products for mobile.

Despite their best efforts, Skok commented, The Logic has not struck a deal with any of the big tech platforms included in Bill C-18 (I’ll give him credit for one thing: They put forth an effort which is more than what I can say for a number of other lobbyists waiting for the bill first before negotiating – which I’m sure will prove to be a terrible mistake.) As a result, for the last two years, the have faced a competitive disadvantage in the war for talent, resources, and distribution against already well resourced incumbents like the Globe and Mail and the New York Times. Bill C-18 seeks to rectify this imbalance (private deals between private parties is not a “market imbalance”).

Second, Skok opined, Bill C-18 is about fairly compensating news publishers through commercial licensing deals for the use of their fact based journalism (that is a lie). A critical need with the rise of artificial intelligence (Bill C-18 fails to address artificial intelligence). Increasingly, search engines answer users questions with integrated content on their own sites vs links that drive us back to a publishers website. This requires search engines to harvest factual information, lift it without permission (this is disinformation) to keep users engaged on their sites. That would be fine if publishers were fairly compensated for it (even in those circumstances, there is an argument for fair dealing here. Further, Google links back to the original sources anyway). If not, some would argue that’s theft (those “some” would be morons who don’t know how copyright law works).

Skok droned on by saying that big tech should want licensing deals now because it alleviates some of the long term copyright challenges and expensive lawsuits generative AI is sure to spark later (except that AI generated work cannot receive copyright protection. Further, facts cannot be copyrighted. Finally, there is a strong case that AI training is fair use. So, as usual, Skok doesn’t know what he’s talking about.) Just as syndication deals work today, if you licensed content, you are free to use it. If you don’t, you can’t. (There’s a difference between republication of work under a licensing agreement and relaying facts in a new written work. We’re comparing apples and oranges here.)

Third, Skok said, every day that this legislation is delayed is another day closer to the extinction of Canadian news rooms (first, this is pure hyperbole, second, Bill C-18 is likely to be the partial cause of such an event). Now, with a level playing field, The Logic can continue to grow and and fill the voids left in our news deserts. However, we also can’t ignore the devastating impact of these job losses which are wiping away decades of journalistic experience and people they can hopefully hire and then grow with their team (that is an excellent argument against Bill C-18). The rebuilding has to start now.

Skok then said that he does not blame big tech for building a better mouse trap. Technological progress has allowed journalism to be read by more people than ever in its history, but that doesn’t mean that big tech should be dictating how journalism should work in this country (it never has). He’s watched this happen for far too long, most recently, with the testing of news blocking on Canadians (who would’ve thought that actions have consequences???). Whatever the tactic, platforms have defined the rules of engagement and distribution of journalism without bearing any of the costs of its collapse (actually, platforms have programs funding journalism. Second of all, it’s not their job to pay for all of the production of journalism. That’s the news companies job.)

Skok asked, would he like more transparency in this bill? Yes. Would he like more platforms included in this bill given the AI copyright issues. Of course. But they have already lost two years and with the pace of change, nothing will ever be perfect in legislation (We’re not even shooting for perfect here. Bill C-18 is a bad bill, through and through.) Bill C-18 opens the door for greater progress for journalism, serving as a step to more fair, proportionate and more fair and equitable licensing structures with platforms (you keep thinking that.) He urges senators to pass this legislation quickly so that Bill C-18 can receive royal assent and he can get back to doing the work that he loves (filling out resumes when his company collapses after getting blocked from platforms. Yeah, sounds like a world of fun, there.) Building a business that provides high quality reporting to Canadian’s across the country.

(Not really a huge surprise. Skok is a first rate moron, so it’s not surprising that he doesn’t know what he’s talking about. The lies and disinformation was a nice touch to that dumpster fire of a speech.)

Ben Wood of AllNovaScotia then opened with his statement. He said that he would like to propose and amendment to Bill C-18 for targeted financial support for small to medium news organizations since evidence from Australia suggests that a disproportionate amount of the benefits from the legislation could flow to the handful of large news organizations that already dominate the domestic market (he is correct on the projected flow, though the PBO would have also proven his point as well).

Wood went on to talk about his paywalled service. He said that their growth has been a slow process because they know that giving away information for free, even relatively small amounts for promotional purposes, halts subscription growth (ehh, each to their own on the business model). hence, they don’t post any stories on social media and aren’t Google searchable. He said that they have slowly grown without making a single Twitter or Facebook post in over 22 years.

That said, Wood continued, Bill C-18 is not going to be a game changer for them because they will not post their articles out of their hard paywall. They do not give away their content, the lifeblood that sustains them and a link to a hard paywall will never go viral. But the legislation will provide a shot in the arm for the largest news organizations in the country which posts content for free, in which they compete with, for new hires and subscribers.

These large organizations, Wood said, with dedicated social media staff, free content, and lots of general interest stories that should perform well under this proposed system. This being the case, they say small and medium news organizations, including subscription based players like them, may be damaged by Bill C-18 unless the government ensures some sort of continuation of a level playing field. One such option would be the continuation of the Canadian Journalism Labour tax credit that was introduced by the federal government in 2019 which could instead be targeted to small and medium sized qualifying news organizations or capped to a certain amount per organization. Something that would lower the overall cost of the program.

Another option, Wood continued, would be a fund topped up by the social media companies and the government. One that, like the Labour Tax Credit, could be administered by an independent body. Making deals tied to the pay rolls spent on journalists could also work as long as there is fair and increased support for small and medium sized players and new market entrants. It should also encourage those organizations which are hiring more journalists and paying good full time salaries or supporting more freelancers, not just making more links on social media.

Wood said that digital news organizations tend to spend a greater share of their budgets on journalist wages than more complex journalism organizations that has distribution, printing, and sponsored content and other divisions. So, each dollar distributed to these smaller players should fund more journalism. Targeted support for small and medium sized organizations will also encourage podcasts, newsletters, and emerging business models that may not fully benefit from links deals with internet giants. In their view, targeted support for these organizations is critical to the new journalism Canada needs and it must be written into Bill C-18 to offset the uneven playing field it may create.

(Essentially, Wood is calling for a fund model. I’m honestly OK with that. Others have called for that already. It’s weird that he’s calling for this perpendicular with the legislation, but there it was. I suspect he’s going to feel smug if the platforms pull the plug on news link and he’d completely insulated from the damaging effects of that.)

Jeanette Ageson of The Tyee opened with her remarks. When Bill C-18 was introduced, their coalition of over 100 independent digital publishers quickly formed to discuss their concerns with how this could play out for the smaller publishers in Canada. Right away, they saw that the legislation could disproportionately the large legacy news organizations and give crumbs to smaller newer entrants and possibly leave out many altogether (Ageson is not the first witness to bring up this concern in these hearings). They’ve heard that in Australia, smaller publishers did eventually get deals with the platforms that they are happy with, and that is encouraging, but she also understands that deals with many of these smaller publishers were delayed.

Initially, Ageson said, the platforms were not responsive to requests for negotiations and eventually, a billionaires charity needed to step in with funding to help a smaller group of publishers negotiate a deal (I believe this is in reference to the Minderoo foundation). So, alls well that ends well she supposes, but if we are to be modelling their approach after the Australia code, let’s also look at ways to avoid that same pattern. Small publishers in Canada are already contemplating if they need to start fundraising for professional negotiators to ensure they get a good deal (don’t bother. The platforms will probably not play ball with Bill C-18. I would focus on fundraising to bolster your operations instead.)

Ageson continued by saying that most of them have small teams with very modest resources and they don’t have the surplus capacity or the funds to have hire teams to help them in the process. That’s why their coalition is advocating for measures that lower the bar for negotiations by ensuring transparency and fairness as part of Bill C-18. (This strikes me as a good idea that sounds good on paper, but a potential nightmare to implement.)

As the bill was considered by parliament, Ageson continued, they spoke at committee hearings and achieved an amendment to make eligible, very small news rooms who might include the owner of the publication as one of the working journalists. So they are pleased with that. But as far as they know, there hasn’t been any movement on ensuring that details of deals would be publicly available or that deals need to be made according to a fair formula across publications (that would be a nice adjustment in the bill). It appears that it will be up to the CRTC to determine fairness, but we won’t be able to tell if they’d agree with that assessment.

At this time, Ageson said, it would be helpful if we were able to know if the terms reached in Australia, but those details are under strict NDAs (Non-disclosure Agreements). There’s no doubt that Canadian journalism is in trouble with thousands of jobs lost and a drastic reduction in public interest journalism available to people in Canada. Yes, a big part of that is the advertising that has supported journalism has been disrupted, but that doesn’t tell us the whole story about what is going on in the industry. In a very challenging and quickly changing industry, small independent news rooms like The Tyee has sprung up and many of them are stable and growing, but not at the pace to replace all the jobs lost since the heyday of newspapers to be sure.

But, Ageson continues, there is something there. They are doing something right. They are experimenting with new business models including earning support directly from their readers. The Tyee, for example, is supported by nearly 10,000 individual donors, making up half of their overall budget. They also crucially have core operating support from a major donor who has allowed them to invest in quality and attract a loyal and paying audience. She’s not saying that if left completely alone that the current market conditions will produce a high level of accessible public interest journalism in communities large and small across Canada. She doesn’t think that is necessarily the case or it might take a very long time to get there.

Ageson said that she does think that having trusted solid journalism is too important to let die if it’s not profitable. However, we don’t want to end up in a situation where these news innovators have delayed or unfair deals from Bill C-18 just because of their relative size or lack of incumbency status (it will invariably happen because despite the larger players insistence, this is a bill for the highly profitable news corporations, not for smaller players at all. If it was, we would have, at minimum, an opt-in system in place so that we can make the choice for ourselves on whether we want to participate or not.) Having timely access to the information about the deals reached through Bill C-18 and what the terms are could mitigate this as well as establishing a fair funding formula based on editorial expenditures. They welcome conversations in this process.

(A number of these ideas would actually improve the bill. Transparency would actually help build trust that these deals are fair. What’s more, a funding model that everyone abides by would actually allow for some fairness in the process. So, not bad suggestions for improving the bill in my mind.)

Questioning the Witnesses

Senator Julie Miville-Dechene turned to Skok and said that he has a specialized media outlet in technology and tech issues, is he sure that he is covered by the issues with the platforms because they are really talking more about public interest news here (interesting that the Section 27 provision of ‘not a particular topic’ has cropped up so unexpectedly) and secondly, she would like to hear his comments about the latest actions by Facebook because if he depends on Facebook to reach a wider audience, especially if he is specialized in technology, she’d think that could be a problem (I would concur with that concern). She knows that he has had different opinions about Bill C-18. He is supporting it now, but he had some concerns about the wording, so those are her three points.

Skok replied by saying that, first off, he is eligible under QCJO (Qualified Canadian Journalism Organization – so that would negate the other part of Section 27). They have a bureau there in Ottawa, for example, that has two reporters. So, they do cover civic issues such as this hearing that they are at (It’s not exactly necessary at that point. The two journalists sounds like it would make them more qualified, but as long as you are covered under the Income Tax Act that satisfies Section 27 of the bill, that’s good enough to be scoped into the bill. You don’t need anything else.) Although he’s not involved in that, but they do cover these things.

Skok continued by saying that they also have 5 bureaus across the country and their journalism- his view has always been that local journalism has always been about being locally relevant, not necessarily locally based. So, there are stories about Sidewalk Labs in Toronto, for example, that their journalists covered which was ultimately a national story that started as a Toronto story. That before any of the local outlets covered it, so he would argue that they are not as specialized as they first seem, the thing on that he would say is that he thinks as innovation happens, what starts today as specialized needs to be given time to flourish and grow and they have every intention to grow as a publication, but they need a level playing field in order to do that, so they could take on more as time went on.

Skok said that in terms of Facebook’s action, the direct impact on their business would actually be negligible because he, like his colleague (Wood) did not build their business on the backs of social networks or search engines. In fact, they didn’t ask for any of this, but they got dragged into it because of the licensing deals that were struck by others that would put them at a competitive disadvantage (don’t worry, in the likely event that the platforms pull the plug on news links, those licensing deals are probably going to be toast too. Tada! No more competitive disadvantage!)

Skok continued by saying that he would say that the impact on society concerns him quite greatly. Losing factual information in a sea of disinformation by these actions is not a good thing. His own personal opinion is that these actions should leave no doubt that these are private companies who are only responsible for their shareholders and, as such, they need policy makers like the senators to bring them in line and he’d also say that if this is how a company like that negotiates with a G7 country, senators can only imagine how those negotiations went with a small business like theirs (Yeah, and I would like to initiate negotiations with The Logic for all the traffic and money that I feel I should be getting instead of him. What do you mean there is nothing to negotiate? Competitive disadvantage! Level the playing field! Where’s the government? I demand free money and fame now!!!)

So, Skok opined, he would just add one last thing on that, the government does have some levers to play here. Last year, according to the governments own advertising report, $54 million was spent on programmatic advertising on Google SEO search engine with Facebook. He thinks that $54 million gives the government more leverage he would ever have (Uh, $54 million would probably account for Googles budget on paper clips. That is not leverage, that is a fart in the wind. The platforms would not miss that money. Again, Skok has no idea what the heck he is even talking about.)

Senator Miville-Dechene said that, regarding the bill itself. (translation cut off some of this. Took some of the cut off audio from the floor audio) We are now at about 700 million cover the bill itself. Does that make sense?

Skok replied by saying that, well, ironically, when the bill was being debated in the other place, the platforms were going around telling publishers – small publishers – that they wouldn’t be included in the bill and that they needed to rally (I think Skok is confusing this with the Bill C-11 debate. Google got small time creators to rally against Bill C-11 because their livelihoods were about to get killed by that bill.) and yet then they sat here and testified that now there’s too many (there are too players scoped into the class of those eligible. Again, it doesn’t look like Skok knows what he’s talking about.) So, it’s not really for him to decide where it’s too many, but he would argue that the platforms themselves have not been congruent in how they responded to that (No, I think you’re just not remembering events correctly.)

Senator Paula Simons said that as a former journalist, the three of them there gives her a much needed boost in confidence that journalism is not dead. She’s a big fan of The Logic and the Tyee and Wood needs to start a publication in Alberta so she can be a big fan of him too. It does concern her that we have created this Rube Goldberg device with all of these complications and, Skok, she is still not certain that The Logic is even covered as a business publication (it’s, admittedly, a small detail in the bill, but the Income Tax Act part of Section 27 does, I believe, cover his organization). She’s just wondering Ageson and Wood because they haven’t had a chance to answer a question yet, what else could the government do that would’ve been a more simpler and practical way, do they think, to support the kinds of journalism that they do and, in Woods case, really local value local journalism that they desperately need and, in The Tyee’s case, a lot of long form investigative work particularly about environmental issues.

Wood responded by saying that, like Skok said, there is a large advertising budget which would help. Advertising is only a small part of their business. They also have many subscribers within this federal governments departments which is great. They love their support. But the federal government already created, what he thinks, is a much less flawed program in the Canadian Journalism Labour Tax Credit. It’s transparent. It is tied to the wages of journalists. So, you can hire journalists and get a percentage of their wages credited back. So, it’s tied to employing more journalists and having more people ask more questions around this country; versus this legislation which he is not sure if it’s tied to posts or links. He doesn’t know if AI can posts these links (it’s links. You got the correct answer in there as far as I’m concerned.) That program was great. It was arms length. It was administered by an independent panel and he thinks that a continuation of something like that would’ve been more appropriate and more effective (I 100% agree with him on that).

Ageson said that there’s all kinds of things that the government could do in the future which is a fascinating conversation that they could also have. Buy yeah, something like the Labour Tax Credit which has been very helpful for news organizations including theirs. Yeah, diversion of digital advertising dollars to publications that run advertising, for sure. Setting up a fund – there’s certain models for funding that she finds really interesting.

For example, Ageson continued, there is certain revenue streams created by legislation. She’s thinking of the one in BC called the Law Foundation of BC and the Realestate Foundation of BC. From what she understands, they make their money from interest aimed on the transactions that go- that are involved in legal cases and realestate transactions. So, legislation was created to divert interest, which essentially belongs to nobody, into a fund to fund public interest legal work. And also, for the Realestate Foundation, she thinks land use policy work and policy to do with housing initiatives to the housing. So that’s a very interesting model that can be looked at as well.

Ageson said that the tax that creates a fund, in that situation, they don’t know how successful that would be either and she’s not a specialist on this, but could we run into international trade law? That might be fruitless, so, she’s not quite sure. She has all kinds of ideas for things that she could do (she giggled while she said that). They could be there for a while, but those are just a few things that could be done.

(There’s a plethora of choices out there that would easily be better than what was put forth by Bill C-18. This includes an endless list of potential fund models. So, it’s expected that someone like her could have a million ideas there. Don’t blame her in the least on that.)

Senator Peter Harder turned to Skok and said that some of the critics of the bill have said that the bill itself is a threat to journalism (it is. I’m glad a criticism was finally properly acknowledged by this senator, however vague that might have been), the independence of journalism. What’s Skok’s sense of that and, related to that, there’s some concern among critics of the role of the CRTC in “meddling” in journalistic independence (he sort of got that criticism right). Could senators have Skok’s view on the independence issue as it pertains to this piece of legislation?

Skok responded by saying that his understanding of the legislation is that the CRTC is a backstop. It allows, first, form a collective that they so choose that they then negotiate directly with the platforms and, by the way, just in terms of the negotiations, if they join a collective, the collective defines how they distribute those funds. It’s actually quite elegant. It’s not- so the collective will then dictate, OK, if it’s about number of journalists, then the collective will distribute those funds based on those journalists. For some of the noise around the CRTC, he would say look, he was in broadcasting or he was in print or in digital, it hasn’t, to the best of his knowledge, and when it has, people have been terminated by jobs when they’ve gotten involved. (this really didn’t make much sense to me)

But, Skok continued, he would also argue that if he had a good deal with Google or Facebook right now that he has been sitting on for two years, and he knew that deal was going to be disclosed at the CRTC, maybe his next deal won’t be as good because there’s no way the platforms would want to provide that level of support for all 700 organizations. So, he thinks it’s a bit cheeky, quite frankly, and an interesting tactic to say that the CRTC is the problem here when some are sitting there with deals and haven’t disclosed themselves how much those deals are for. (Yet, Skok himself doesn’t want those details disclosed because he is worried that he might not get as good of a deal later on. Funny how that works.)

Senator Andrew Cardozo said that, like Senator Simons, he is amazed, he has a lot of respect for what the witnesses are doing. He thinks that they are really at the front line of the future of news in this country. So, thank you for doing that and being there. Skok, he takes his point that it’s better to go with the bill that they have than not (Honestly, no. The bill needs to be scrapped before it blows up the news sector.) Skok probably understands the unpredictability of politics between this house and the other and we never know what can happen when senators send it back with amendments. He understands that people would rather have this and move along. After giving a shout out to The Tyee, he asked the witnesses if they could take a minute to talk about their thoughts on artificial intelligence and how that is going to affect their publications in somewhat the context of this bill. Does it make any difference if journalism is going to change hugely in the days and weeks and months ahead with ChatGPT and all the rest.

(A lot of the doomsday scenarios envisioned by things like ChatGPT is overblown. Specifically, the concerns that it is going to be the end of humanity. There have been a lot of experiments, testing to see if things like ChatGPT can replace things like journalists. At one point, CNET tried to quietly use AI to write its content, but that wound up being a complete and total disaster because it was incapable of discerning truth from fiction. Though AI might write convincing sounding content, accuracy of that content is not really a thing these days. Though AI may some day assist writers and make publications better, they won’t be replacing news writers any time soon.)

Skok replied by saying that as he said in his opening remarks, these algorithms or these generative AI platforms need to harvest the information from somewhere and they are harvesting it from factual information in order to do it. So, on the one hand, he would argue that they are not, as of yet, being fairly compensated for that (not relevant to the question). While Bill C-18 is not a panacea on that front, it’s certainly a start to be able to accomplish that in getting some licensing fees (not really). He’s not the first to say that. News Corp has said that, Wall Street Journal has said that as well. The other thing that concerns him about that is the flooding of the zone of not truthful stuff that will be out there. It’ll certainly allow news outlets that are not really news outlets to flourish with cheap flooding of the zone of misinformation.

So, Skok droned on, he thinks that it makes this legislation even more vital to happen now because whether he is competing with another outlet or not, we all serve, he believes, a vital role to in our democracy to provide truthful information in a sea of disinformation. (The problem is that this bill does nothing on the subject of artificial intelligence. It never ceases to be ironic that those who are complaining loudly about disinformation and saying that Bill C-18 is important to put a stop to it are so often the very sources of disinformation on this topic, polluting the public discourse in the process.)

Ageson said that she completely agrees with Skok that the advent of generative AI makes something like Bill C-18 even more urgent (you fool!). It sort of erases the pushback to Bill C-18 which is that publishers will benefit from traffic being sent to their sites and then it’s up to them to monetize (no it doesn’t. The bill doesn’t address artificial intelligence. Also, that is, in fact how the internet works today. The pushback is still intact.) It also displays the kind of entitlement that a lot of these platforms have had – or assumption that news organizations can survive with having their business models completely disrupted because they will ingest their content and then display it without any compensation (That is entirely misleading. The platforms are not taking whole content and reposting it. They are linking to it which is well within the boundaries of fair dealing.)

Ageson continued by saying that it also displays this sort of idea that news and facts are just lying about and that they exist without reporters actually going and reporting, making phone calls, showing up, doing interviews, bringing facts into being rather than just having them lie around as if there is no labour involved in making that happen (Familiarize yourself with the phrase “gather the facts”. Reporters do not make the facts, we seek it out and uncover them. How on earth did you make it this far as a reporter and still find yourself making these ludicrous comments?) So, she thinks that the rise of generative AI means that legislation likes this needs to happen (what a train wreck of an answer!)

Wood responded by saying that he’s got a couple of different points with AI. He thinks it’s important to note, and Ageson touched on this in her answer just now, you have to look at what a journalist does to add value. Picking up the phone, working the phones, having sources, showing up, like she said. These are the things journalists should be focused on and low hanging fruit like baseball scores and weather and traffic jams, that is going to be taken over by AI. So, he’s an optimist there. He thinks there is always going to be jobs for journalists – good journalists with good sources.

Wood continued by saying that the other thing he should say about AI is close the door. The reason that AI can come in and harvest the information on their sites, regurgitate their stories, go through your back files, is the openness of your websites. He thinks that the rise of AI is a discussion that all news organizations need to have in terms of how they present their information and some of the steps that they could take on the technology side to protect the life blood of their organization. Their back files and all of their information.

(OK, the only half way sane response to that question. Wood does, however, touch on something that does bear repeating. That is the concept of the websites. If you don’t like your content being shared on other platforms, stop sharing it. If you don’t like your content being linked to on Google, use Robots.txt to block the spiders. The concerns of platforms “stealing” your content can all be solved by really simple and basic steps. You don’t need legislation for this by any stretch of the wild imagination to solve these problems. Now, I personally fundamentally disagree with Woods constant assertions that news must be hidden away and locked away from public view at all times. I don’t believe that serves as much of a public good here. At the same time, Wood does at least point the finger where it belongs: on the news sites themselves. Don’t like a certain reuse? There’s a technological solution to that. Legislation, again, is not needed. This isn’t rocket science.)

Senator Rene Cormier turned to Ageson and said that she expressed serious concern about the small organizations that are excluded from the bill. He heard what she said, but he would like to ask her whether the amendment that restricts the number of journalists or includes two whether the owner is one or not. Does Ageson feel that’s sufficient? If not, what would she propose?

Ageson responded by saying that that is an amendment that they fought for in parliament because, before, it said that the organization needs to regularly employ two journalists that are at arms length from the owner. So they- you know, provided the perspective that many startup organizations only reach that point in their third or fourth year of operation and, often, it is a journalist who starts the news organization and they are doing everything in the beginning. So, it’s appropriate that they be included in that. She thinks- it also happens in very small and early stages of organizations is that taking on an employee is a big responsibility and it’s not to be taken lightly.

So, Ageson continued, often times, in the beginning, people are working with freelancers because that is the only sustainable or responsible thing to do at that point. So, a further evolution might be to consider the work of freelancers or contractors and not just employees in the production of news.

Senator Cormier said that his second question is for Skok and Ageson. If he read correctly in the other place, Skok said that he felt that Bill C-18 would provide greater transparency and would work against the NDAs (Non-Disclosure Agreements). Does Skok feel that the report that came out is sufficient? He would ask Ageson, she, in contrast, was concerned about the NDAs. Does she feel that the independent auditors report should have other measures implemented as a result.

Skok replied by saying that he would say that there was an amendment done near the end of the bill in the House which would at least give the arbitrators the information so that they can know what the deals are – in which case, they can adjudicate fairly. That was one of his concerns from a transparency lens because how do you make sure you have equitable deals? That amendment is a great thing. In terms of the public’s right to know, he, as he said in his opening remarks, he would love for this to be all public (nice change of comments compared to earlier on in the hearing.) They have nothing to hide. They show everything they have on their website. They disclose of their funding to the best ability that they can as a private company. He would love to do this as well.

However, Skok said, if it’s a choice, and he thinks it is at this point, to get this thing done or have that greater transparency, he would take the get this thing done (Boo! The correct answer is greater transparency!) because, as he said, they’ve been at this massive disadvantage for two years to their direct competitors. (Sad watching someone who claims to be a journalist shun transparency so much.)

Ageson responded by saying that she thinks that transparency would make this bill stronger. She understands that someone will be able to see all the balance of the deals and try to provide a fairness lens, but she doesn’t know what fairness lens that person is using. She doesn’t know what their basis of fairness is. It would be preferable if those involved in the deals and the public could also agree that they think that is fair – whereas they would have to take someones word for it that they think that is fair based on criteria she doesn’t know. She admitted that she lost her train of thought at that point.

Senator Cormier said that his question was really about the independent auditor. Does she feel that the report is adequate or should there be more clarity about the content? So, he’s really talking about the reports and what they should contain.

Ageson responded by saying that it’s hard to know because she doesn’t know what would eventually be in the reports. She doesn’t know if it would have just an opinion, right? If someone says that they are the auditor, they have reviewed these bills, they think that they are fair, or, if they will disclose actual real numbers. She thinks- it’s tough because you would need to- she means, it would be helpful to know in your two or three or four how many journalism jobs have been retained or grown as a matter of coming out of Bill C-18.

But that might, Ageson continued, you know, need to involve a level of news reporting from organizations that they might not want to share, but as a way around that, you could, just sort of, disclose, the amount that went to each news publication and on what terms and how those agreements were reached (this is a faceapalm worthy answer because that’s the system the bill already envisions. Senator Cormier is hoping for more and the concern is that the money would just get pocketed by executives and hedge fund managers. The transparency needs to show that the money did, indeed, go to journalists and the production of journalism. That would instill confidence in a system that is already envisioned to be opaque and secret.)

Same with Skok, Ageson said, they also disclose all of their finding. It’s a matter of importance because they try to build trust with their readers. So, they are not required to disclose all of that, but they do that proactively. She also doesn’t want to be in a situation where she is under an NDA and cannot share that information with their readers. She thinks that would damage the trust that they have built over the years.

(Voluntary disclosures is not a bad thing. I don’t mind them at all. However, voluntary disclosures is a band-aid solution to the transparency issues with the bill. There needs to be a better system underpinning the bill that does ensure fairness such as a formula that is applied equally to everyone, transparency reports that show that the money obtained through deals actually went to the production of journalism and not some sort of stock buy back program. What’s more, if the news organization themselves are disclosing this, there’s no guarantee that the numbers aren’t, well, creatively inserted into such reports. On an individual news organization level, that’s not such a big deal, but on an industry wide scale where government is mandating payments, the public needs that level of transparency to have trust in the system.)

Senator Pamela Wallin turned to Skok and said that a quick point at the beginning here, can he explain to her why he believes Bill C-18 will curb disinformation or misinformation? We don’t even have definitions of those words, actually, but how does he think that would work? (That is actually a really good question.)

Skok responded by saying that it’s a very industrial answer which is they need more journalists, they need more journalism jobs. They need more fact based journalism. In 2008 and 2009, when they laid off a lot of journalists, what they really gutted was that mid level editor and copy editor and fact checker. He thinks that the thing that has been really slow to be replaced is that. At The Logic, that was the first things they hired. They have a ratio of two reporters to every editor. They do that for a reason. When they publish something, it has gone through the ringer before it has gone out. So, really, his industrial policy answer is more journalism jobs will have more fact based reporting and editing.

And, Skok continued, he also deeply worries, as he touched on in the very beginning, is that the talent pool of young, up and coming journalists who get their training at a small town community newspaper and can go somewhere else, that’s gone and it’s only going to erode further unless they stem that tide (That may need solutions, but Bill C-18 is not a solution. Bill C-18 only adds fuel to that fire.)

Senator Wallin said that this is a self regulated business, really. There is nothing in the legislation, as he sees it. She just didn’t want to leave that impression on the ground that somehow, there is a mechanism directly to stop misinformation and disinformation.

Skok replied by saying that he believes that there are other pieces of the legislation about that and he can’t speak to those (ehh, not that I’m aware of.)

Senator Wallin said that she would like to go to Wood on this question: for those of us who were journalists in an earlier life, it’s troubling that they see journalism – she means, journalism has always been dependent on others – the kindness of others to exist, whether it was the advertising revenues that came from the newspaper or television station or whatever. Then, going to direct government funding of journalism, she found very very troubling and now, forcing these deals between journalists “news operations” and big tech doesn’t give her any more peace. Wood seems to have found a model that he thinks could work which is, sort of, back to the future, let subscribers decide. If you have an audience to support your content, you will succeed. If you don’t, you won’t.

Wood responded by saying that what he guesses he should start off by saying is that he doesn’t support government subsidies for private news organizations (fair enough). He’s suggests that this support to address the uneven playing field that he believes this legislation could create given that there is so much uncertainty in this legislation. They don’t know if Google and Facebook are going to pull out of news in this country (very likely). They don’t know if there is going to be major delays for small publishers to get deals. They don’t know if they will get good deals or bad deals because while many news organizations from Australia spoke to senator last week (reference to hearing 8, segment 1), they weren’t able to describe any of the deals that they had made.

Wood continued by saying that the targeted supports will de-risk this period of one or two years after this legislation comes out for smaller players – small and medium sized players. They actually spoke out against the Canadian Journalism Labour Tax Credit when it was first proposed. That’s on the record, but they had to take it to remain competitive – and now it feels like a bit of deja vu. He’s in this position again where this legislation coming down. It looks like it’s coming and this targeted support for smaller diverse voices in the media landscape could help avoid some of the increased concentration among some of the largest players. So, he just wanted to get that on the record.

In terms of transparency, Wood said, and he knows that Skok shares this on his website, but a minority shareholder in The Logic is PostMedia (that explains a lot) and its a material investment and he knows that Skok is there as part of a cross section of the new and emerging media players, but he does have that investment from PostMedia. He thought that was something important to note (Skok looked really uncomfortable in that moment).

Senator Wallin said that yeah, and so she guesses she will go to the Tyee as well and just say, does Ageson share those concerns expressed by Wood that funding, whether from government or forced negotiations through big tech still puts Ageson in a compromised position?

Ageson replied by saying that they have a very different model. They don’t have a hard paywall and they are a non-profit organization, so their entire model presupposes that journalism is worthy of public and private support. The devil is in the details with how those deals are set up and independence clauses. She actually believes that Bill C-18 provides more independence from the platforms (Hahaha! No.) She, she can’t-

Senator Wallin asked how is that? What does Ageson mean? How does it make Ageson more independent?

Ageson replied by saying that because if the deals are mandated to be in place – like, right now, the platforms can go to publications individually and they are atomized because they are- the deals are under NDA. They are not allowed to talk to other news organizations about what’s in the deals. Also because there is these massive platforms and you are only one little small being. You don’t really have much of a negotiating position. The terms of the deals are, right now, are take it or leave it. There’s not much to be done there to assert a better position. If the deals are mandated to be in place, then you actually have a stance to say, well these have to be in place, so let’s talk about what is in those deals and then you don’t have the ability for the platform to come to you and say, we don’t like this critical reporting you are doing, we’re pulling funding and we don’t have to tell you why. We don’t have to give a reason. It’s just gone. Whereas if they are mandated to be in place, it means that you are not actually under that threat of funding being pulled because of bad coverage.

(This is one of those moments in the hearing where what was said is so wrong that it’s difficult to really begin explaining why the witness is wrong. First of all, the deals that were already struck happened because of the threat of legislation. If there was no threat, there would be no deals at all. Second of all, there really is nothing to negotiate. There shouldn’t be a requirement to pay for linking at all period. It’s insane the original deals were made in the first place. Third, there probably won’t be that disadvantage should the platforms pull the plug and make the media much worse off than before. Everyone would end up suffering equally anyway. Fourth, the more players you add to being qualified, the higher the risk the platforms pull the plug.)

(This isn’t just here, but elsewhere as well. Even if you somehow managed to pull off the miracle of getting the deal in place, that deal will always be on shaky grounds because publishers in other countries are going to want their pound of flesh as well. This will only encourage an across the board drop in news links further down the road. The funding being pulled won’t likely be because of bad coverage. It’ll likely be because the platforms will eventually tire of paying out hundreds of millions over content that barely means anything to them. The more these deals succeeds, the higher the risk it will all come crashing down afterwards. The argument for a return on investment is already highly questionable in the first place and all you are doing is tacking on more and more liability. The platforms are big, but their wealth is by no means unlimited. They won’t stay this wealthy just by giving that wealth away for no real good reason. Whether it’s the business that realizes this is a horrible idea or the shareholders. Sooner or later, questions are going to be asked.)

Senator Jim Quinn said that one of the things he worries about local news. How that’s going to be sustained. He sees this bill as a step in helping to ensure that local news will continue to have a space. But, some of the things that have been said here, he’s just a little bit confused on. One is that- Skok listed the three benefits. The second one was the licensing deals negotiated and it will help to avoid legal action down the stream. During that, Skok said that info is lifted without permission from time to time and he assumes that’s for everyone. He’s not sure if Wood’s organization has had news content lifted, but it goes to the other premise that people should be paid for their work. So, there’s that part of it.

Then, Senator Quinn continued, the other part that they’ve talked about is the competitiveness of their business. Journalists are in different organizations. PostMedia may be in a better position to hire people from smaller folks, making it more difficult to maybe find people. Then, we’ve also talked about the fear of disproportionate distribution of whatever the funds are to big guys vs little guys. Yet, we talk about deals – fair deals – and this is a question for everybody. A deal in a competitive environment, why would you want to have- why would anyone want to have a commercial deal shared with others who they are competing against? He’s just a little confused of this coming out of a business environment, he’s a little confused by that. Maybe each of them could comment on that and help him better understand that.

Skok responded that he’s hap- on the issue of transparency, as he said, right now, for them, it’s getting the deal- getting this legislation passed through (not the question). If there are commercial deals, great. He thinks the backstop if it goes to the CRTC, that’s when it becomes another issue (also not the question). He just also wanted to address the comments about PostMedia (a little frazzled, are we?) They have several strategic investors because they believe in a news ecosystem that is small players, large players. Some of which are- yes, PostMedia is an investor in The Logic, but so is Tiny Media which he believes is a part of Ageson’s group (implicate the Tyee in the process, good job) as well as Jessica Lesson and the information out of San Francisco, so, he is the controlling shareholder of the company and as his mom likes to say, nobody tells him what to do. So, really, there’s no worry about that (Uh huh, sure.)

So, Skok continued, really, it’s about the larger ecosystem and he does think that a loss of a small publisher in a small town community is a loss for all of us because, from his perspective, running a business, where is he going to recruit his next generation of talent? (Again, not the question.)

Senator Quinn asked if he is correct in saying that Skok would support the statement that this bill goes a long way in helping to ensure that they have that small town regional presence.

Skok replied by saying that, certainly, from some of the testimony that they’ve heard, he would argue yes (LOL! Yeah, they are going to be first in line to the slaughter.)

Senator Quinn asked if Wood had any comment on that.

Wood replied by saying that he thinks that it’s certainly going to inject a lot of money into Canadian journalism at least, based on what the projections they’re seeing. His concern is the concentration of that in some of the more powerful news voices that have scale, that have social media, specific staff, departments that work at that, you know, just economies of scale. Also, are more likely to sign deals earlier while smaller players sort of languish for a certain period of time.

(This is a very fair concern to have. Indeed, the Australian model has suggested that there are a number of small players still, years later, trying to navigate and break through the bureaucratic process of trying to get in a position to negotiate. Some players have gone so far as to give up because the process of trying to be able to negotiate was just too much work in the first place. I don’t see anything in this legislation that says that the Canadian experience would be any better. The larger players will use their CRTC point people to quickly get the organization through the process swiftly while the smaller players will get left behind, trying to work out which forms to fill out and which process to use. Just ask any ordinary person who has had to navigate a CRTC process. The website is anything but easy to use and I suspect trying to get into a position just to bargain for a smaller player won’t be any easier than me trying to participate in a public consultation by that regulator.)

The larger players, Wood continued, will be more insulated from revenue losses should Facebook actually pull out of the market. The smaller players will certainly be hit by that – many of them. In terms of, he thinks they were talking about sharing of resources. He knows that the Local Journalism Initiative was a program brought in where you could get a reporter subsidized by the federal government, but then you would have to share that coverage with other media organizations and, yes, that’s a program that they did not use because they have to make exclusive stories that are worth paying for.

Wood continued by saying that there was another arrangement for the proposed sharing of CBC articles or CP articles across smaller players to support them. Again, all of their stories have to be exclusive and they have to be first in order for it to have value.

Senator Quinn asked Wood if any of his content ever been uploaded to his knowledge?

Wood replied by saying that, no, no tech giants have ever pulled any of their stories, but a couple of journalists have tried. We’ve all been there, though.

Senator Quinn said that he’s been a subscriber for years and the wall was always there- (time expired)

Senator Donna Dasko said that her question is for Ageson mainly and back to this transparency issue. Let’s assume that there will be no transparency. They are not going to change the way the bill is and, basically, what you see is what you get in terms of transparency. So, what does Ageson think the impact of this is going to be? Does Ageson think it’s going to lead to the larger organizations getting more than they should (probably)? Does Ageson see a downward spiral, for example, the way the smaller organizations are going to be treated? What is the impact of the lack of transparency, assuming it’s not going to happen?

Ageson responded by saying that here is something that could happen, smaller organizations band together to form a bargaining unit, which is great. They set up to negotiate with the big platforms. Say that the larger organizing block is already achieved deals. They don’t know what’s in them, they don’t know the terms. In their negotiations with the platforms, they say, as part of their negotiations, they demand to see the terms and payment amount of- for the larger publications and they say that is not possible. Sorry, can’t do it.

So then, Agweson continued, they are operating in the dark a little bit in terms of establishing fairness for their organizations. It would make it hard to know. Then the only person that would get to know that would be someone at the CRTC who would then make an assessment of if it’s fair or not and they would just have to take their word on that.

Senator Dasko then said, so, does Ageson think that it’s going to lead to more arbitration? Does Ageson think it’s going to lead to smaller news organizations wanting to take it forward in terms of a complaint or dissatisfaction with the deal? Is that would be what Ageson is looking for is that information- is that what Ageson is saying is part of the impact?

Ageson responded by saying that it could be, then also, their organizations are small- you know, they don’t have big staff, you know. She runs many different hats at The Tyee. She is running around doing many different things. They will all make a decision on how much time to devote to this and whether they have the resources in time to mount a dispute, you know, mount a complaint. So, if they just had access to information about what the deals are and what the terms are, they can avoid a lot of that – and if the intention of this bill is to, you know, provides support of- or the journalism industry based on the quality of content that they put out there, let’s make sure they get that outcome without having to be in years of disputes and then just throw up their hands and just say, well, they don’t know if what they got is fair or not.

Senator Dasko said that, as she said, she doubts whether transparency is going to be forthcoming if you know what she means in terms of the bill (which honestly sucks for everyone involved. No transparency means less faith in the process, more confusion for anyone who is bargaining, and an all around more crummy system where corruption can run rampant. At the same time, I guess I’m not surprised either. This is, after all, a very corrupt and rotten bill, so why bother making it marginally better in the first place?). Her other question is for Wood. Just to clarify, Wood talked about the need for targeted supports. So, essentially, is Wood agnostic about Bill C-18?

Wood responded by saying that if there was a button he could push that would make it disappear, he would push that button (I don’t blame him at all. The threat to his competitiveness and the fact that he would be hard pressed to even derive any value from deals when his web presence is non-existent are two big understandable motivating factors there.)

(Everyone in the room laughed)

Senator Dasko said, alright, that’s not agnostic (she laughed some more).

Senator Bernadette Clement, the witnesses business models are all so different. She finds that really interesting. She worries about the number of people who do not seek out the news (What??? I share a worry with Senator Clement? I guess there’s a first for everything!) and expect the news for free (well, that ruined that). Like healthcare, we all know nothing is free, but they expect it. So, they will want to come upon that without paying for it (it’s a tall order to get people to read it for free these days, so I doubt that’s really a big worry in the grand scheme of things). So, for those witnesses who have paywalls, and they are not necessarily using social media, how are they able to get out there and attract the people they need to be reading what sounds like really excellent content?

Wood responded by saying that they have almost 17,000 paying subscribers across Canada now and a lot of them, they phoned up and said, hey, twe just wrote about them, do you want to read it? Maybe you should subscribe (Hopefully, they didn’t contact the police afterwards and made things a bit more awkward after.) It worked and also, word of mouth. People are talking about it. They have a premium news product, they have a great team there. This is in-depth balanced exclusive journalism. Those are important stories you can’t find anywhere else and people talk about it.

Sometimes, Wood continued, the people who talk about it are on the floor of the legislature and they are holding up their iPhone and saying ‘this was in All Nova Scotia today’ and they want to know why this happened. So that’s how their part of the media ecosystem filters out to the wider society. So, they are more than just informing their subscribers indirectly, but they are also just supporting journalists- over 40 journalists in 6 cities now, writing these stories and, at the end of the day, it’s $13 a month to get access to all six of those news bureaus. Everyone pays the same price from the premier all the way down to every other subscriber and not all of their subscribers are corporate titans. Lots of people are just really really interested in how things work.

Their interested in policies, Wood said, they’re interested in people primarily. People that are running business, trying new ideas. It could be someone opening a hot dog stand down the street all the way up to someone trying to propose a multi-billion dollar hydrogen export facility. People are very interested in news. Jesse Brown talked a bit about this last week (reference to hearing 7, segment 2) where the news environment has always been funded by a small group of Canadians and it may be less than 10%, but it creates all of this news that we get to use that informs decision makers and helps set policies and holds people in industries to account.

Skok said that he’s watched, in his years of journalism, as tech platforms define the rules of engagement, whether it was first click free which demanded that if you wanted to be on search, you had to give the first click free. Then it was flipping the algorithm on a dime that you wanted to pivot to video and media had to quickly scurry to adapt or die (I don’t think that the choices were that extreme). So, at The Logic, they decided that they had to move completely away from that to a direct relationship with their readers and they did that through e-mail and community building. As Wood speaks to, they just came off of a road show of sorts doing events and meetups for their subscribers from five different cities across this country.

And, Skok continued, that word of mouth, he likes to equate it to they are like a band on tour. Maybe not at Taylor Swifts level yet, but going from town to town, driving around and getting word of mouth. That relationship building really does help.

With that, Senator Leo Housakos adjourned the hearing.

Concluding Thoughts

Honestly, as much as I am totally polar opposite to his insistence that news has to be locked away from the public, Wood was seemingly the only reasonable witness in that panel. Ageson started off reasonable, then she hit that moment of suggesting that journalists create facts, then it was all downhill from there for her. Skok was not a surprise at all to me. I expected him to be useless in the hearing and he pretty much met that expectation in my books. It was, admittedly, rather interesting when Wood pointed out that Skok was funded by PostMedia which would explain both his position and access to these hearings in the first place, so watching him squirm like that when that was aired out in public was amusing to me.

I probably said it before in my analysis in other hearings, but I’ll say it again here. One thing I am looking for in these hearings is whether or not there is, in fact, a compelling case for Bill C-18. So far, the whole field of lobbyists have really come up empty here. They had all the access in the world, all the kicks at the can in the world, all the swings of the bat in the world, and one by one, it was swing and a miss, swing and a miss, and yet more swings and misses. I sure heard a heck of a lot of talking points, but every talking point I’ve heard in support of the bill really lead nowhere and is easily dismissed with one fact of another.

Wood, at least, added an interesting perspective in all of this. If you don’t have a presence online and all of these organizations are snagging all these massive pay days, how are you supposed to really compete with that if you actively chose not to have an online presence? Is it necessarily fair that everyone else is pulling in all these thousands or millions of dollars while you get punished for deciding to be not actively participating in the online ecosystem? This bill is, allegedly, about “saving” journalism and fairness and being equitable, well, how is that any of the above for journalism?

Another thing I’ll say is that I’ll give Wood props for at least acknowledging the threat that the platforms could leave. The other two witnesses seemed to be in denial and assume that deals are just a sure thing no matter what so long as the bill passes. I find the position, and I’m being really generous here, extremely presumptive. They are assuming that the platforms have practically already said that they would go along with this whole shakedown or blackmail or whatever other way you want to accurately describe it and the only question at that point is “how much”? You’re getting ahead of yourselves on that one.

If you wanted a compelling reason that Bill C-18 is the definitive choice to cure the woes of the media landscape, you simply didn’t get it here. I admit I didn’t expect any new revelation on this one and I wasn’t surprised that a revelation never came.

Drew Wilson on Twitter: @icecube85 and Facebook.

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