August 31, 2022 VIA EMAIL: trcm@sen.parl.gc.ca Standing Senate Committee on Transport and Communications The Senate of Canada Ottawa, Ontario Canada, K1A 0A4 Attention: Vincent Labrosse, Clerk of the Committee Dear Mr. Labrosse: Subject: CCSA Submission for Consideration in the Committee’s forthcoming study on the subject matter of Bill C-11:

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts Introduction 1. As the representative of over 100 smaller, independent companies providing Cable TV/IPTV services to mostly rural parts of Canada, the Canadian Communication Systems Alliance (CCSA) is pleased to provide these comments and recommendation regarding Bill C-11:

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts (“Bill C-11”). 2. In focusing on establishing obligations to support Canadian program creation and presentation as a means to bring foreign streaming services into the Canadian Broadcasting System, Bill C-11 overlooks the similarly important need to ensure Canadians, particularly those living in rural communities, can have equal access to those ser vices. The Bill should be amended to address this need. 3.

Also, to ensure the CRTC issues its decisions in a timely manner, Bill C -11 should adopt language similar to that in the UK Communications Act which places a positive, binding obligation of promptness on the regulator. 4. Lastly, as the CRTC has also recommended, Bill C-11 needs to incorporate language contained in the CRTC’s Digital Media Exemption Order to maintain current consumer protections respecting “online undertakings”.

The Need to Require Streamers to Make their Services Equally Available to Rural Canadians 5. While a fundamental objective of Canadian broadcasting policy is the creation and presentation of Canadian programming, just as important is the objective of equal access to broadcasting services by Canadians wherever they live. In fact, Bill C-11 would strengthen this objective.1 6.

Thus, since the purpose of new legislation is to bring foreign streaming services into the Canadian Broadcasting System, it is not enough just to require them to fund Canadian programs and make them discoverable: the new legislation must also require those streamers to make their services as equally available to Canadians living in small rural communities as they make them available to urban Canadians. 7. Unfortunately, some foreign streaming services discriminate against smaller Canadian communities and rural Canadians in how they make their services available.

Unless Bill C- 11 rectifies this situation, rural Canadians will remain the “poor cousins” when i t comes to access to streaming services and the high quality, popular programs that are increasingly being migrated from legacy linear services to the streamers and their apps. Moreover, unless the Bill addresses this problem, rural Canadians will also mis s out on many of the improvements to Canadian programming choice and quality that urban Canadians will enjoy once the streamers are required to allocate funds to help make more and better Canadian shows. The Great Re-Bundling 8.

While streaming services initially pursued a “stand alone” distribution model to, among other things, distinguish themselves from linear services often packaged and sold in “cable bundles”, they are increasingly changing that approach now and instead are embracing (or at least seriously contemplating) the benefits working with service aggregators to be part of a bundled service package. 9. Bundling for streaming services both responds to consumer demand and makes a better business case than the standalone m odel.

Consumers have become tired of having to subscribe to – and pay separately for – multiple streaming services, and then search through each (again separately) to find the shows they want to watch. Instead, consumers now want the convenience of one -stop access to their chosen streaming services through a single interface. They also want to pay a single bill, utilize a universal search function and, if possible, get a multi-service discount on their bill as they currently do when, for example, 1 Clause 3(6) of Bill C-11 would amend s. 3(1)(

k) of the Act to provide that “a range of broadcasting services in English and in French shall be extended to all Canadians”, thus removing the current qualifier “as resources become available”.

subscribing to a single provider’s bundle of TV, wireless and (sometimes) wireline communications services.2 10. The standalone distribution model has also presented business challenges for the streaming services themselves. Chief among these appears to be the resulting tendency for subscribers to sign on when a new, popular show is launched, and then cancel their subscription once they’ve binged through it – a practice which now undermines the consistent monthly subscriber revenues the streamers had one planned on.

One strategy the streamers are now using to try to avoid this constant and repeated subscriber churn is to release episodes on a weekly basis rather than all at once. Another is to work with aggregators to offer their service in a bundle that provides a price discount for a long term – e.g., two -year – commitment/subscription.

Moreover, the streamers’ desire to achieve the “stickiness” that comes with this type of bundling is only expected to increase as they launch add-supported versions of their services – since advertisers will want their ads to be seen consistently and over a lengthy period of time by returning viewers. 11. Currently, there are different industry sectors positioning themselves to be the non - exclusive aggregators/bundlers of streaming s ervice, including makers of Smart TVs (e.g. Samsung, LG), connected device manufacturers (e.g., Amazon, Apple) and even department stores like Walmart.3 12.

However, given their long -standing relationships with hundreds of linear channels, their experience with bundling, their still -large customer bases and their growing broadband businesses, Cable TV/IPTV providers may be best positioned to meet the expanding consumer demand for user-friendly, cost-effective access to bundles of video programming services, whether from streamers or legacy providers.4 13. That is, if the streamers will work with Cable TV/IPTV providers. 14. So far it appears they will – but only if the Cable TV/IPTV provider is really big and serves an urban market.

See, for example, TELUS’ recently launched “Stream +” service5 and Rogers’ deal with Apple TV+.6 15. But if you live in a smaller or rural community and rely on a smaller, locally -based Cable TV/IPTV provider to get your video service, you’re out of luck.

The streamers won’ t deal with your provider because it is “too small”. 2 https://www.theglobeandmail.com/life/article-canadians-are-reconsidering-their-streaming-habits-due-to-rising-costs/ 3 https://www.nexttv.com/news/walmart-to-bundle-paramount-plus-with-walmart-plus 4 https://www.tvrev.com/news/as-tv-viewers-rebundle-can-cable-companies-mount-a-comeback 5 https://dailyhive.com/vancouver/telus-stream-plus-netflix-apple-tv-discovery 6 https://about.rogers.com/news-ideas/elevating-the-ultimate-entertainment-experience-rogers-brings-apple-tv-to-ignite-tv-and-ignite- streaming/

The Streaming Situation in Canada: Discrimination Against Rural Consumers 16. Currently, certain foreign streamers – most notably Netflix and Disney+ – make their Apps available to Canada’s large, urban Cable TV/IPTV distributors to integrate into their systems.

As a result, the urban subscribers to those large broadcasting distributors can easily switch from a linear c hannel like TSN or RDS to Netflix or Disney+ by simply clicking the Netflix or Disney+ icon in their Programing Guide: they do not have to exit their Cable TV/IPTV service and sign into their Internet service and Netflix or Disney+ account to make that switch. 17.

With Netflix and Disney+ integrated into their Cable TV/IPTV service, the results urban subscribers can get when using the push -button or voice-activated Search function of their TV service will include not just the related shows available from the ir linear channel providers but also options from the vast selection of shows available in the Netflix and Disney+ libraries. 18. Also, when Netflix and Disney+ are integrated into their Cable TV/IPTV service, urban subscribers can benefit from the convenie nce of receiving a single integrated bill for their TV/Netflix/Disney+ services. 19.

As noted, Canadian Cable TV/IPTV subscribers living in urban centres can get all these benefits from an integrated Netflix and Disney+ service because Netflix and Disney+ make their Apps available to the large broadcasting distributors serving those centres. However, Netflix and Disney+ preclude Cable TV/IPTV subscribers living in rural Canadian communities from getting the same benefits as their urban counterparts because they refuse to make their Apps available to small broadcasting distributors, many of which typically serve those rural communities .

This is the case notwithstanding that smaller distributors are also investing in the platforms which enable this seamless switching. It is even the case when the smaller broadcasting distributor is willing to pay the extra cost that may be required to take on the Netflix or Disney+ integration. 20. By refusing to make their Apps available to small Cable TV/IPTV distributors while making them available to large, urban broadcasting distributors, these foreign streamers are discriminating against Canadians based on where they live (and what broadcasting distributor they therefore rely on to get their TV services).

This reduces choice for rural Canadians vis a vis their urban counterparts in whether – and, if so, how – they can access the most popular streaming services and the most compelling content. 21. Moreover, as a result of this more restricted access, rural Canadians will have less exposure to the Canadian shows that Bill C -11 will require the foreign streamers to help create and present. And, without equal access to the Netflix and Disney+ Apps, s maller Cable TV/IPTV distributors have an even more difficult time competing against their large

Competitors and thus are less able to offer Canadians the diversity of affordable programming choices which Canada’s broadcasting policy seeks to promote. 22. In that respect, a fundamental and long-standing principle of Canada’s broadcasting policy is that Canadians should have equal access to broadcasting services, wherever they live.

Accordingly, since the goal of Bill C -11 is to bring the foreign streamers into the Canadian Broadcasting System, the legislation should not just require the streamers to contribute to the creation and presentation of Canadian programming: it should also require them to provide all Canadians with equal access to their services. 23. At the conclusion of this submission, we provide suggested language to be incorporated into Bill C-11 to address this issue. The Need to Ensure Timely CRTC Decisions 24.

It is important for both stakeholder’s ability to operate their businesses and for the CRTC’s credibility with both the public and industry that the Commission issue its decisions in a timely manner – something that it is currently failing to do. 25. In the UK, the Communications Act requires O FCOM, the regulator, to publish service standards and comply with those standards. In other words, there is accountability that is currently missing from the Canadian structure. 26. Specifically, the UK statute provides: s. 8 Duty to publish and meet promptness standards

(1) It shall be the duty of OFCOM to publish a statement setting out the standards they are proposing to meet with respect to promptness in— (

a) the carrying out of their different functions; and (

b) the transaction of business for purposes connected with the carrying out of those functions.

(2) This

section does not require standards to be set out with respect to anything which (apart from this section) is required to be done by a time, or within a period, provided for by or under an enactment.

(3) OFCOM may, if they think fit, at any time revise the statement for the time being in force under this section.

(4) It shall be the duty of OFCOM— (

a) in carrying out their functions, and (

b) in transacting business for purposes connected with the carrying out of their functions, to have regard to the statement for the time being in force under this section.

(5) Where OFCOM revise a statement under this section, they must publish the revision as soon as practicable.

(6) The publication under this

section of a statement, or of a revision of a statement, must be in such manner as OFCOM consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by the matters to which it relates.

(7) OFCOM’s report under paragraph 12 of the

Schedule to the Office of Communications Act 2002 (c. 11) (annual report) for each financial year must contain a statement by OFCOM summarising the extent to which they have complied during that year with the standards set out under this section. 27. We recommend that Bill C-11 incorporate similar language. The Need to Maintain Current Consumer Protections Respecting “Online Undertakings”. 28.

Given the intent of Bill C-11 to bring streamers into the Canadian Broadcasting System, the CRTC’s current powers to resolve disputes between programming and distributi on undertakings over wholesale contractual terms – as maintained in Bill C -11 – should be extended to clearly encompass those streamers as well . Such powers exist now under the CRTC’s Digital Media Exemption Order (“DMEO”) 7 but would seem to disappear un less Bill C-11 is amended to incorporate them.

This a recommendation the CRTC also made when it appeared before the Committee at its Pre-Hearing stage. 7 See Appendix to Broadcasting Order CRTC 2012-409, ss 9-13, https://crtc.gc.ca/eng/archive/2012/2012-409.htm.

Recommendations 29. To address the above-described concerns, CCSA recommends that Bill C-11 be amended as follows. Equal Access for Rural Canadians to Streaming Services 30. Clause 3 of Bill C-11 would expand Canada’s Broadcasting Policy objectives to cover “online undertakings”.

For example, that Clause would add s. 3(1)(q)(ii) which would provide that online undertakings which provide the programming services of other broadcasting undertakings should “when programming services are supplied to them by other broadcasting undertakings under contractual arrangements, provide reasonable terms for the carriage, packaging and retailing of those programming services.” 31. The above amendment would require online undertakings to provide reasonable terms when purchasing services from others.

Missing in the Bill, however, is the parallel obligation that online undertakings provide their services to others on reasonable terms. Accordingly, to that end and in order to extend the Broadcasting Policy objective of equal access to broadcasting services to cover online undertakings, s. 3(1) should be further amended to include the following: Online undertakings that supply their services to another broadcasting undertaking for distribution under contractual arrangements shall supply their services on reasonable terms to other broadcasting undertakings that wish to distribute their services.

Ensuring Timely CRTC Decisions 32. Bill C-11 should be amended to incorporate language similar to that contained in the UK Communications Act, as replicated above. Dispute Resolution Involving Online Undertakings 33. To ensure the CRTC has clear power to preserve or replicate the current Dispute Resolution rules and processes in the DMEO, Clause 11 of Bill C-11 should be amended to include new wording for s.10(1)(

h) which would grant the CRTC power to make regulations …for resolving, by way of mediation or otherwise, any disputes arising between broadcasting undertakings concerning the carriage of programming originated by either of the broadcasting undertakings. 34. This highlighted language would replace the narrow references to “programming undertakings” and “distribution undertakings” in the current s. 10(1)(

h) with the more

encompassing “broadcasting undertakings” (i.e., it would now include “online undertakings” as well as programming and distribution undertakings). 35. CCSA thanks the Committee for the opportunity to provide this submission. Sincerely, Jay Thomson, LL.B, LL.M, CEO