Bill C-10 and the Future of Internet Regulation in Canada

On the surface, the aim of Bill C-10, the Broadcasting Act reform bill, is to bring influential streaming television, film and music services such as Netflix, Crave, Disney+ and Spotify under the Broadcasting Act and the authority of Canada’s communication and media regulator, the Canadian Radio-television and Telecommunications Commission (CRTC). While public reaction would usually be staid and limited to specialists, the bill, tabled in the House of Commons by Minister of Canadian Heritage Steven Guilbeault in November 2020, has ignited a fierce debate over the future of internet regulation and media and cultural policy in Canada.

Given the core flaws this debate has identified, this much is clear: the government should drop the bill and start over. When it does, it should do two things: trim its sails on the content regulation front and tailor its approach to more closely follow the lines of the European Union’s 2018 Audiovisual Media Services Directive (AVMSD). Following the AVMSD will help to keep the focus of regulation fixed on a clearly specified set of broadcasting television and video-on-demand (VOD) services — whether people access those services over cable, satellite or the internet. Continuing to push Bill C-10 is a fool’s errand and could set an entire new generation of internet regulation off on the wrong foot.

The Aims of Bill C-10 and the Potential for Salvage

Bill C-10 is an attempt to bring internet-based audiovisual media services under the democratic oversight of a legitimate government, but its scope is ill-defined. Are Google, Facebook and TikTok’s activities sufficiently similar to those of broadcasters to be included? As a memo from the Department of Canadian Heritage shows, even those crafting the bill don’t know. The memo, obtained by National Post journalist Anja Karadeglija, states that what will be defined as a regulated online broadcasting service “is something that the CRTC will need to work out over time, and injects further uncertainty into the analysis.” Consequently, the memo continues, the discussion around this core issue — just what constitutes broadcasting and a broadcast program — is “necessarily speculative.” This is the taproot of the controversy that has engulfed the bill, and is ultimately why it should be abandoned.

But Bill C-10 includes features that might be worth salvaging in a new, redoubled effort to regulate the digital giants. For one, it is premised on the idea that as “big tech” firms take on more important roles in society, the scope of their public obligations should increase correspondingly. This is much better than the untenable current state of private global companies unilaterally and unaccountably setting the terms that govern the marketplace for media and cultural goods and how we communicate with one another online.

Moreover, in contrast to those who cry “compelled speech” at the mere mention of regulating the internet, it is important to realize that a handful of massive global companies are not the internet. In fact, the attempts of a handful of global internet giants to remake the internet in their image by, for example, substituting their own proprietary technical code and business models for the open code of “the original internet” can actually be seen as anti-internet.

In addition, despite cries to the contrary, Canada is not an outlier when it comes to taking bold public policy measures to rein in big tech. Indeed, there have been a dizzying number of similar public policy initiatives taken by governments around the world in recent years (as my ongoing tally of such efforts, compiled with University of Fribourg professor Manuel Puppis, highlights). While Bill C-10 is all about media and cultural policy objectives, it also gives us a glimpse of how the government might approach other parts of its digital policy agenda.

Read charitably, Bill C-10 simply clarifies that the CRTC has the authority to regulate online television and radio broadcasting services. In so doing, it formalizes what the CRTC has claimed to be the case since 1999. Cast in this light, Bill C-10 aims to play catch-up by imposing public obligations on large internet services engaged in broadcasting activities that are more or less equivalent to those applied to cable television, broadcast television and radio services since the 1970s.

Crucially, and first, the bill requires that all “broadcasters” operating in Canada disclose basic information regarding corporate ownership, revenue, expenditures, catalogue titles and subscriber numbers, as well as other data related to their operations. This data provides Canadian regulators and policy makers with a picture of global companies within our borders. It will also ensure that we never see another moment in which a global player like Netflix can defy a request for basic information from the CRTC regarding subscriber numbers, revenue and the volume of Canadian titles in its catalogue. This was the case, for example, in 2014, when the then CRTC chair, Jean-Pierre Blais, clashed dramatically with Netflix’s director of global public policy, Corie Wright, on this very point. Of course, better access to information would also be a benefit to academics and other researchers, who often find it extremely difficult to acquire reliable data of the type being discussed here.

Second, requiring online VOD services like Netflix and Crave to have mandatory funding obligations, similar to other pay television services, is also a good idea. However, advocates of Bill C-10, such as Bell Canada Enterprises (BCE), the Writers Guild of Canada, Unifor and Liberal MP Julie Dabrusin, are demanding the adoption of contribution levels that are pegged to those of Canada’s largest broadcasting television and radio groups, which require 20–30 percent of revenue to be reinvested in Canadian content (CanCon). These demands are neither realistic nor equitable. Instead, funding commitments and quotas imposed on online streaming services should be consistent with the decades-old expectation that cable system operators and VOD services in Canada should reinvest five percent of their revenue into original productions or up to twenty percent as is the case for linear pay television services (once news and sports programs are stripped out of the equation). This would put an end to the regulatory holiday in place for all online VOD and streaming services, including BCE’s Crave, Quebecor’s Club illico and Rogers Sportsnet NOW.

It is important to bear in mind that these discussions are occurring at a time when Canadian television services owned by the likes of BCE, Rogers, Shaw and Quebecor have significantly reduced spending on original program production. Nonetheless, spending on television and film production in Canada continues to hit record highs, year after year (except during the early part of the pandemic in 2020), driven by investment from television and film studios in the United States as well as from Netflix, Amazon Prime Video, Apple TV and so forth. This is an outcome that should be met with celebration, rather than the constant naysaying it tends to get from cultural nationalists (Serra Tinic discusses why so-called runaway productions are overall a good thing for Canada).

Third, Bill C-10 also enables a novel application of the “broadcasting distribution undertaking” (BDU) concept (cable television, in everyday parlance) and its related “must-carry” rules. This move sees app stores, such as Google Play and Apple’s App Store, as well as digital platforms, such as Amazon Prime Video and Apple TV and iTunes, operating in a way similar to cable television, IPTV (internet protocol television) and direct-to-home satellite providers (all BDUs in official CRTC-speak).

The idea that these same services should also have limited must-carry obligations when it comes to, for example, CBC/Radio-Canada services, emergency messages, and services oriented toward people with disabilities, or racialized, Indigenous and other communities is a defensible one. Now that capacity issues are largely a thing of the past, and storage and bandwidth costs are marginal enough that they, effectively, cost nothing after the original investments are made, if Canada were to tell Amazon and Apple that they had to carry, say, the CBC, the Aboriginal Peoples Television Network and OutTV (Canada’s only LGBTQ+-themed network), both companies could make it happen at very little cost.

Of course, doing this would mean that the giant corporations that own and control the digital means of communication would be compelled to carry a range of speech on terms set by the state that they might not otherwise offer. That is fine. Telephone companies, for example, must carry all legal content, and any claims to “free speech” they have made to avoid these common carrier obligations have been dismissed out of hand. That should be the case with respect to a limited must-carry regime for digital platforms as well. Such measures are also consistent with historical precedents that have sought to enable more speech and greater public participation in society and its communications systems, and to use communication and media policy to promote such compelling public interests rather than relying on the exclusive rule of the market.

Why Bill C-10 Should Still Be Abandoned

There are several compelling reasons why we should go back to the drawing board with this legislation.

Bill C-10’s conception of broadcasting threatens to swallow the whole of electronic communication, with potentially grave threats to free expression as a result. The principal failure of Bill C-10 stems from its attempt to extend the concepts of broadcasting and broadcast programs to all pictures, video and audio transmitted over the internet to the public, unless the CRTC or a Cabinet directive says otherwise. This represents a reckless imperial overreach.

Under Bill C-10, people’s everyday expressions, which include pictures, audio and video, are magically turned into “broadcasting programs” when transmitted by third parties — for example, social media firms — over the internet, unless the CRTC or a Cabinet policy directive says otherwise. Section 4.1 in the bill was originally intended to provide iron-clad protection against just this prospect, but an amendment removing that clause in early May also removed those reassurances.

This is the case because Bill C-10 takes the definition of broadcasting, a small carve-out since the early twentieth century from the broader formal definition of telecommunications, and makes it the centrepiece of internet regulation. As a result, unless the CRTC says otherwise, any entity that “transmits” video, audio and pictures over the internet could be treated as a broadcaster (i.e., it is not just Netflix, Crave, Disney+ and Amazon Prime Video, for example, that are swept under the definition of broadcasting).

The result is a massive expansion of the concept of broadcasting, the Broadcasting Act and the CRTC’s mandate. That the CRTC, an arm’s-length regulator, would be the arbiter of the details of Bill C-10 introduces massive risk and uncertainty, as the memo from the Department of Canadian Heritage mentioned earlier observes.

Bill C-10 represents a blow to democratic accountability: the CRTC is not the virtuous super-regulator that its advocates imagine. These uncertainties raise fundamental questions regarding the political legitimacy of our relationship with our regulators. Since the formation of the first regulatory agency in Canada — the Board of Railway Commissioners in 1903 — parliamentarians have been uneasy about ceding too much authority to unaccountable technocrats. This concern is typically addressed by Parliament creating the rules, and having regulators apply and enforce them — backstopped by the potential for appeal of regulators’ decisions to the courts and/or Cabinet. Bill C-10 flips this arrangement by giving the CRTC extraordinary rulemaking power.

This worry is intensified by the conditions under which Bill C-10 mandates the CRTC to strike individually tailored “service agreements” with the corporations under its remit. Bill C-10 only requires the CRTC to give a “reasonable opportunity” for other broadcasters and “interested parties to make representations to the commission with respect to a proposed order” (section 7(4)). This would pull back public participation in regulatory proceedings by a half century, to before 1976 when the CRTC limited participation to only those with a “material interest” in the matters before it. The rule was changed thereafter to ensure the commission heard from a wider range of public interests before making decisions in the name of the public’s interests, thereby democratizing communications and media regulation in Canada.

Having studied the CRTC for 30 years and regularly participated in its proceedings over the last decade, I do not believe the commission has the capacity, resources or leadership to do what Bill C-10 requires of it. The bill asks Canadians to trust the CRTC, and to put aside concerns that the institution will act in the interest of corporate actors over the public. Its track record, especially under its current chair, offers very little reason for such optimism. Rather than take the CRTC at its word, Parliament must democratically set the guardrails for regulation of the internet, protecting Canadians from what could be an uneven track record from our regulators overall (Michael Geist’s list of recent actions by the CRTC is illustrative of this point).

Bill C-10 mobilizes a flawed and constrained conception of communication on the internet. That all forms of online expression beyond simple text should be regulated like broadcasting, and digital platforms that engage in “content aggregation” and transmission of content over the internet regulated as broadcasters, flows out of the conceptually dubious and badly flawed sense of the facts found in chapter three of the report Canada’s Communication Future: Time to Act published last year.

The core problem is that the definition of content aggregation has no clear edges. Consequently, it could sweep any and all kinds of communications transmitted over the internet under the Broadcasting Act and into the CRTC’s jurisdiction. Libraries, book publishers, newspapers, music distributors, video game publishers, and even the defunct video rental outlet Blockbuster could all fall under the label of broadcasting if their content is transmitted over the internet. Conjoined with the established definition of a program in the Broadcasting Act, the result is a sprawling concept that transforms the aggregation and transmission of audio and visual content over the internet into a program and a potentially regulated broadcasting activity, again, unless the CRTC says otherwise.

In an attempt to allay such concerns, a draft policy direction has already been crafted by the government to ensure that video games do not fall under the CRTC’s authority. But what about everything else just mentioned? As the Canadian Heritage memo referenced earlier stated, it’s all uncertain, and open to speculation. That the proper application of Bill C-10 hinges on a hundred hypothetical carve-outs should be enough to stop the effort dead in its tracks.

Bill C-10 embodies an attack on common carriage and net neutrality. Redefining so much of our electronic communications as broadcasting would also push aside some of the powerful tools in telecoms regulation that have been fashioned over the last 150 years, including the critical concept of common carriage, or net neutrality. After all this time, common carriage remains the Swiss Army knife of communications and media regulation today because of its power to:

• put concentrated economic power under public regulatory supervision;
• recognize gatekeeper power over the flow of human expression, information, commerce and culture, regulating that power to ensure that no undue or unjust discrimination takes place;
• dismiss common carriers’ claims to free speech in favour of the expressive rights of the people, content and services that must pass through the carriers’ gates;
• subject the complex technical systems, interoperating networks and devices that underpin our economy, society and democracy to public oversight, forcing these systems to open up their “black box” technical systems to public scrutiny; and
• impose strong privacy and data protection obligations on common carriers.

Prioritizing a broadcasting model over a careful use of ideas from alternative traditions like common carriage could come at a steep cost, including the loss of the above tools. Those tools, in turn, have applicability not only in the context of the online broadcasting/audiovisual media services debates now raging, but also across the government’s digital policy agenda.

While Minister Guilbeault says that Bill C-10 does not undermine common carriage (Open Parliament), this reflects a myopic view. The reality is that common carriage and broadcasting regulation are like oil and water. Common carrier principles command that “thou shall not exercise undue discrimination,” whereas Canadian broadcasting policy is based on the exact opposite idea: “Broadcasters shall discriminate in favour of a particular kind of content.” By putting the latter principle at the front of the line, Bill C-10 bends the arc of communication policy away from common carriage and toward control over content, that is, broadcasting programs (broadly construed).

Minister Guilbeault also overlooks how the subordination of common carriage to broadcasting would rob us of the former’s powerful and time-tested, useful tools. Moreover, given that many of the advocates of Bill C-10 have attempted to create many exceptions to common carriage — or turned a blind eye to threats to it — in the name of promoting Canadian broadcasting without much success for the past 25 years, their assurances about their respect for net neutrality now ring hollow. This is also a problem because the tools of common carriage are arguably much better suited to dealing with many aspects of digital platforms than the more narrowly focused emphasis that Bill C-10 supporters put on fostering “good content” and suppressing “bad speech.”

The common carriage approach also complements a progressive view of “discoverability” that Fenwick McKelvey, communication studies professor at Concordia University, has articulated and that could serve as a core policy principle not only for audiovisual media and broadcasting, but also potentially across a wide swath of the digital platform policy agenda. Rather than forcing CanCon to rise to the top, as a broadcasting-led Bill C-10 would do, this vision of discoverability opens up to public scrutiny the complex technical communication and media systems that regulate, influence and shape our access to the world around us. We need “discoverability” rules not to hit our quotas for CanCon, but so that we can shed light on how these systems work and spot the potential for discrimination, unfair or anti-competitive behaviour, and even systemic risks.

By undermining common carriage and its impoverished view of discoverability, Bill C-10 denies Canadians a more powerful set of tools than the limited ones that have dominated discussions of “cultural policy” so far. A more powerful set of tools would also benefit a wider range of actors — creators, program services, regulators, scholars and the public — and could be selectively ported across multiple policy domains related to, for instance, ongoing policy discussions regarding compensation for news content, data and privacy protection, the pending online harms bill, and website blocking by internet service providers and other online intermediaries, as well as investigations of market dominance.

Bill C-10 Is a Missed Opportunity

Beyond the flaws within the bill, Bill C-10 also leaves a number of pressing regulatory issues unanswered. Bill C-10 does nothing to address problems of market concentration across the communications and media landscape. Indeed, the entire debate revolves around the “web giants” while curiously turning a blind eye to the big five vertically integrated communications and media conglomerates in Canada: BCE, Rogers, Telus, Shaw and Quebecor. These five companies have revenues that are more than seven times the combined revenue of Google, Apple, Facebook, Amazon, Microsoft, Netflix and Twitter from their communications and media-related operations in Canada. In fact, BCE’s revenue is single-handedly more than two-and-a-half times that of the “big six” US internet giants in Canada combined.

With the exception of Telus, these communications and media companies own all of the major commercial television and radio broadcasting services in Canada, an exceptional situation that has only been cemented in place over the last decade or so and that is also unique by international comparative standards. Despite the public policy record for Bill C-10 and the broadcasting and telecommunications policy review that informs it groaning under the weight of the submissions made by Canada’s biggest communications and media conglomerates, they are conspicuously absent from the public debate and media coverage.

Bill C-10 also speaks only obliquely and hesitantly about “encourag[ing] … a wide range of programming” and merely adds language about serving Canadians with diverse racialized identities, abilities and sexual orientations and Indigenous peoples rather than concrete measures to maximize the diversity of who gets to speak in Canada and on what terms (section 2(2)). This is a long-standing weakness of the Broadcasting Act and Bill C-10 does nothing to address it, lending the impression that such words are just window dressing rather than a real commitment to social justice.

Further, Bill C-10 does nothing to rein in the “surveillance capitalism” model that underpins the activities of the web giants and their Canadian counterparts. The bill leaves a well-known absence of strong privacy and data protection measures in the current Broadcasting Act untouched. In contrast, the Telecommunications Act has an explicit set of privacy and data protection rules to complement general privacy law. This absence is consistent with the approach to privacy that gave us the current Canadian Consumer Privacy Protection Act (Bill C-11), a “step backward overall for privacy,” according to Daniel Therrien, the head of the Office of the Privacy Commissioner of Canada.

Ultimately, Bill C-10 is a poorly drafted bill characterized by a dangerous level of government overreach that simultaneously leaves the power of both the web giants and domestic communications and media conglomerates unscathed. Favouring an opaque technocratic approach to internet regulation over a democratic one, Bill C-10 seems to be more interested in hitching private power to a few public interest goals than in exerting a serious effort to establish the first plank of an emerging, multi-pronged approach that could make the digital public sphere more accountable, responsive and democratic.

An Alternative Path Forward

In trying to impose a poor solution in the place of a well-crafted one, Bill C-10 runs the risk of foreclosing alternative paths that are simpler, more effective and more legitimate from a political point of view. The most obvious example — and the one closest to the original objectives of the current broadcasting reform bill — is the European Union’s AVMSD.

For one, the AVMSD is based on a clear distinction between linear scheduled broadcasting services offered by both public service media entities (for example, the BBC) and commercial audiovisual media services, on the one side, and VOD services, on the other. Linear broadcasting services are subject to fairly heavy scheduling and financial contribution obligations relative to the public obligations that VOD services must meet, as is the case in Canada already, as discussed earlier. By definition, VOD services under the EU framework do not distinguish between whether the service is accessed over cable networks, direct-to-home satellite, IPTV or the internet. The rule is “technology neutral.”

Unlike the European Union’s AVMSD, Bill C-10 is not technologically neutral and contemplates new rules for services delivered over the internet versus those accessed by other means. As a result, the CRTC could end up regulating the same service differently depending on whether a person accesses the service over the internet or cable television. This would add greater uncertainty and confusion for companies such as OutTV, for example, which could face one set of rules when audiences access its services over traditional cable systems and another set of rules when they use its mobile application to watch RuPaul’s Drag Race over the internet and their mobile devices (OutTV holds the rights to the program in Canada).

Another key feature of the AVMSD is that the sharp line that it draws between the scheduled flow of broadcasting programs and VOD services also means that the latter are treated as if people are gaining access to a catalogue of television and film titles. Consequently, cast in these terms, VOD services are seen more as publishers than broadcasters, which behooves regulators to tread lightly with respect to freedom of expression. As a result, VOD services are subject to lighter catalogue quotas, prominence requirements and funding obligations. Bill C-10 erases such nuanced but critically important distinctions in favour of turning everything into a monochromatic view of broadcasting.

Lastly, the AVMSD takes a more hands-off approach to social media and user-generated content and, therefore, is more in tune with people’s right to express themselves freely online. This is because the directive draws a sharp line between the broadcasting and VOD services it covers, and the social media services and user-generated content that are beyond its reach. In contrast, Bill C-10 leaves this line blurry, uncertain and speculative, with final outcomes turning on determinations by the CRTC or a Cabinet policy directive.

It is also essential to recognize that while the Liberal government is unfolding its expansive digital policy down several paths, Bill C-10 lacks a sense of being part of an integrated and coherent whole. The AVMSD, in contrast, has a more holistic and integrated relationship to culture, society and the economy as part of the European Union’s Digital Economy and Society Index. That initiative, in turn, is comprised not just of the AVMSD, but six other planks addressing privacy and data protection, common carriage, competition, mobility of intellectual property rights, telecommunications affordability and open data. This initiative also represents a fuller picture of how digital communications and media services fit into every nook and cranny of people’s everyday lives.

Ultimately, Bill C-10 is not an ambitious and imaginative approach to the digital policy issues of our times. Instead, it is the stump of an old idea about broadcasting stuffed into shiny new rhetoric about web giants and what it means to be Canadian in the digital age.

The policy agenda it represents embodies the agenda of those who have pushed to regulate the internet by the standards of broadcasting for the past 25 years. Canadian telecommunications giants closed ranks as they took control of the main commercial television services in this country. To date, these groups have failed to capture and subordinate the sweep of communications policy to the constricted remit of broadcasting regulation, but Bill C-10 may finally deliver.

Instead of following through with the wish list of monopolists and cultural nationalists, Canada has an opportunity to create a future of internet regulation that centres on democratic accountability and the interests of Canadians. By killing the bill and committing to starting over, the government could take the first step toward that future.