Comments by Vaxination Informatique tto the Senate Standing Committee on Transportation and Communications. regarding Bill C-11

An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts Jean-Francois Mezei Vaxination Informatique jfmezei@vaxination.ca Pointe Claire, Québec 04 October 2022

Table of Contents Introduction ..................................................................................................................3 Context .......................................................................................................................................................3 Executive

summary ....................................................................................................................................3 The law , democracy and courts .................................................................................4 Abuse of Policy Direction mechanism .....................................................................................................4 Jurisdiction of the CRTC ............................................................................................................................4 Petition to Governor in Council ................................................................................................................5 Definition of Program ...................................................................................................6 Definition of Online Undertaking ................................................................................9 Problems with 9.1 ......................................................................................................10 Download vs Stream .................................................................................................12 YouTube and music ................................................................................................................................12 Other Items .................................................................................................................13 Social Media ..........................................................................................................................................13 News .......................................................................................................................................................13 Heavy regulatory burden .........................................................................................14 Discoverability ........................................................................................................... 15 The Big Picture ............................................................................................................17 Scheduled vs Promoted .........................................................................................................................17 Legacy media as the enemy of Canadian culture .............................................................................. 18 Funding and Contributions ...................................................................................................................19 9 (1) (

h) funding .....................................................................................................................................20 Funding the funds ..................................................................................................................................20 Conclusion .................................................................................................................21

Vaxination Informatique 3 of 21 04-Octy-2022 C11: Introduction Introduction 1. Jean-François Mezei, dba Vaxination Informatique has participated in CRTC telecom processes since 2008 and was the author of the 2011 Petition to Governor in Council seeking the overturn of the CRTC's UBB decisions. I present as a citizen and have no affiliation with media or incumbent enterprises. 2. The following document has been modified from its original version. It has been formatted and truncated to fit the Standing Committee on Canadian Heritage page limit despite Bill C-11 requiring far greater of analysis. No executive

summary or table of contents provided due to these limits. For purposes of filling pages, certain topics are out of order. Context 3. The Internet has succeeded because of the permission-less environment that fosters rapid innovation and potential for rapid growth. When Apple launched iTunes, it went from nothing to being the world's largest music store in a few years, displacing large store chains such as Sam's in Canada, Towers in USA, HMV and Virgin Music worldwide. And more recently, it was displaced by Spotify and others who created a new subscription business models to access music. 4.

Trying to freeze a business model in a law will hinder innovation and scare capital away from Canada, especially with C-11's text capturing just about every online endeavour that has an image in it, pending exemption from a regulator to operate outside of C-11's heavy regulatory burden. 5. The wide scope of the text of the Act creates uncertainty on whether an innovative new service will be captured by the CRTC, uncertainty on whether the CRTC will grant an exemption or not. Uncertainty scares capital and innovation away.

This is what at stake with a bill so poorly written that it captures anything with image or audio, the original definition of "program" remaining unchanged in the Broadcasting Act. 6. Participants to CRTC proceedings use the exact text of the law to argue their case. The Federal Court of Appeals and Supreme court use the exact text of the law when dealing with an appeal. What some politician promised many years before is totally irrelevant, especially since the politician refused to change text after warnings, which means the text of the bill reflects intent of politician. 7.

This Senate is not called upon to examine a politician's promises or promises of a future Policy Direction, it is called upon to examine the text of the law. In this case, it needs to consider how the Broadcasting Act will be changed by C-11 instead of just considering C-11 by itself. The industry and CRTC will not be working with C-11, they will be working with the Broadcasting Act. Executive

summary 8. C-11 seeks to apply the Broadcasting Act to a much wider digital industry while limiting appeals process in all the new issues that CRTC will be dealing with. 9. Many

definitions especially that of program,broadcasting, online undertaking must be updated before bill receives royal ascent. New

definitions needed for undefined terms in bills such as streaming and Internet. 10. Without at least those changes, this bill must not receive Royal Assent as it would cause too much damage to Canada's digital economy.

Vaxination Informatique 4 of 21 04-Octy-2022 C11: The law , democracy and courts The law , democracy and courts Abuse of Policy Direction mechanism 11. A bill must be ratified by both Parliament and Senate before it can become law. Passing an incomplete bill with a promise to complete it via an Order in Council undermines the democratic process. Broadcasting Act: (existing). Policy directions 7

(1) Subject to subsection (2) and

section 8, the Governor in Council may, by order, issue to the Commission directions of general application on broad policy matters with respect to: (

a) any of the objectives of the broadcasting policy set out in subsection 3(1); or (

b) any of the objectives of the regulatory policy set out in subsection 5(2). 12. The limitations to general application and broad policy matters exist in both the Broadcasting and Telecom Acts explicitly to prevent a Minister from using the Policy Direction mechanism to change the law without due process. The submission from McCarthy Tétrault LLP (starting bottom of Page 3) as well as Telus in the proposed 2022 Telecom Policy Direction provides good background on why the limitation was put for both acts1. 13.

In the specific case of C-11, the addition of clause 7(7) grants the Governor in Council powers to enact specific regulations whose effective result is to change the law in a way where nether interveners in CRTC processes, nor Members of Parliament or Senate can challenge. 14.

And even if the Senate deems it appropriate to allow a Minister to change a law via Order in Council, it needs to consider the impact on the very sector it wishes to help when that law is changed willy-nilly with a new Order in Council issued every couple years when a minister is changed (as we are currently seeing with the Telecommunications Act). Long term investments do not happen in the face of regulatory uncertainty. 15. The addition of clause 7(7) must not be allowed. Jurisdiction of the CRTC 16. An administrative tribunal must not be able to set its own jurisdiction.

Jurisdiction must be clearly defined in the law it oversees. However, bill C-11 broadens the jurisdiction of the Broadcasting Act to essentially anything with an image or audio on the Internet and expects the CRTC to then define exemptions, define terms such as "social media" and "streaming" since the minister refused to include such

definitions. 17. Should the CRTC refuse to exempt video games (or define a "video game" properly), any challenger going to the Federal Court of Appeal on a question of law/jurisdiction would likely see the Court rule that the text of the (C-11 revised) Broadcasting Act grants the CRTC the jurisdiction to make such a decision. 18.

It gets worse when a Minister issues an order in Council to include or exclude a business sector as "Broadcasting" since there is likely no appeal mechanism for such since it would not represent a CRTC decision and as above, would be within the overly broad jurisdiction granted to the CRTC to administer the Broadcasting Act. 1 Telecom Policy Direction comments: https://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf11810.html

Vaxination Informatique 5 of 21 04-Octy-2022 C11: The law , democracy and courts The law , democracy and courts (cont) Petition to Governor in Council 19. Sections 28 and 29 allow for impacted parties to petition Cabinet to order the Commission to change, review a decision. However, 28(1) limits the scope to questions of license (Section 9). 20.

With C-11, the CRTC's role will consist not only of issuing licences, granting exemptions for the need of a licence, but will now also have to rule on whether an entity is to be regulated or not and this is outside the scope of a Petition to Governor in Council, outside the scope of appeal to FCA, (Review and Variance is not available under Broadcasting Act) 21. During Heritage Committe's truncated hearing on C-11, during Meeting 342, Mr. Thomas Owen Ripley (Associate Assistant Deputy Minister, Department of Canadian Heritage) responded to a question on Petitions to Governor in Council: Mr.

Bittle, if I understand Monsieur Champoux's reason for bringing this forward, it's to provide a greater latitude to make petitions to cabinet on certain decisions that the CRTC makes. Right now there is no definition of “decision” in the bill or the act as it currently stands. It would be generally understood in the ordinary use of language. Here the definition that is being proposed, as Monsieur Champoux said, is quite broad. The bill does not currently suggest that stakeholders should have an ability to petition every single decision that the CRTC makes to cabinet.

That is limited to the issuance, primarily, of licences. That's to avoid a situation in which cabinet could begin to substitute itself as the decision- maker for the regulator. If there's a situation in which every single decision that the CRTC makes could be petitioned to cabinet, it certainly creates risks, creating a lot more avenues for those decisions to be overturned politically. 22. Ability to appeal to the government is needed in cases of regulatory capture (which have been frequency in recent years) or where the CRTC clearly makes a decision that is against general policy objectives.

As there is no Review and Vary process for Broadcasting Act, appeal to government is the only means to address such. 23. Originally, most CRTC decisions were questions of licence as this is how it asserted its power over legacy broadcasters. With the expansion of jurisdiction to an unlicensed Internet world where there will be questions over exemptions and not licences, the above quote shows a deliberate decision to prevent challenges outside of the legacy broadcasting world, the one area where the CRTC will be making a lot of controversial decisions over the coming years. 24.

The Commission could decide that a bank's web site (has images and distributed to large number of users) should contribute to broadcasting funds since it can argue its significant revenues would represent a significant contribution to the implementation of broadcasting policy. The bank could not file a Petition to Governor in Council to have government overturn this decision. 25.

The Telecom Act does not restrict the scope of Petitions to Governor in Council, so the precedent exists to implement the same policy for Broadcasting Act, especially as the CRTC will be required to issue an incessant number of exemptions from regulation in order to try to keep up with the ever changing Internet. 2 CHCP meeting 34, June 14th, statement from Mr Ripley at 12:06 https://www.ourcommons.ca/DocumentViewer/en/44-1/CHPC/meeting-34/evidence

Vaxination Informatique 6 of 21 04-Octy-2022 C11: Definition of Program Definition of Program 26. By far the greatest flaw in C-11 is its failure/refusal to update the definition of "program" which dates back from the days when only a television could receive and display transmitted images (at 29.97 images per second) , and only radios and televisions could receive transmissions of sounds.

Current (and unchanged in C-11): program means sounds or visual images, or a combination of sounds and visual images, that are intended to inform, enlighten or entertain, but does not include visual images, whether or not combined with sounds, that consist predominantly of alphanumeric text; (émission) 27. As NTSC could only transmit images and audio, an exemption was needed because the transmission of text could only be done when it was formatted as an image (for instance channel displaying a programming guide).

This reference needs to be removed as it is yet another anachronistic inclusion in an allegedly modernized act. Channel guides are obtained not by tuning to a channel, but pressing a button and having the STB (Set Top Box) generate the display from data). 28.

Because the products of the broadcasting industry are now also transmitted over the Internet, there is an understandable desire to expand the scope of the Broadcasting Act, however the anachronistic definition of "program" ends up capturing any web site/service that contains an image or sound. (such as a bank's or newspaper's web site, as well as personal web site, podcast, audio books, art gallery web sites etc. As the Internet is constantly evolving with new services emerging at rapid pace, they become "broadcasting" by default until/unless the CRTC issues an exemption from regulation for them.

Such exemptions cannot exist ahead of the invention of a new service. Uncertainty on whether a new service will gain exemption (and how many years it will take the CRTC to process) will turn away investment. 29. In the end, any new service will need to get the CRTC's permission to be exempt from the Broadcasting Act, and this breaks the very essence of permission-less environment that has made the innovation and new business models of the whole digital economy possible. Trying to manage the rapidly changing Internet is akin to trying to herd 150 cats in a field full of catnip.

To expect the CRTC to manage this is unrealistic. 30. Therefore I propose this new definition of Program: program means video and/or audio content for which rights need to be held by a broadcasting undertaking for transmission to the public and whose production requires crews or artists be members of recognized artist or trade unions3. 31.

Combined with a new definition of Broadcasting and Online Undertaking, will properly circumscribe the jurisdiction of the Broadcasting Act to only content created by the conventional broadcasting industry instead of encompassing the whole of the Internet and expecting the CRTC to issue a constant stream of exemption orders. 3 The CRTC can maintain an official list of recognized Artist/trade unions including reciprocal agreements maintained by ACTRA/UDA with other countries.

Vaxination Informatique 7 of 21 04-Octy-2022 C11: Definition of Program Definition of Program (cont) 32. The new definition is re-enforced by the fact that in Québec, the "

Loi sur le statut professionnel et les conditions d’engagement des artistes de la scène, du disque et du cinéma"4 requires membership to a recognized union for the production of content that is part of the broadcasting ecosystem. 33. However, my proposed definition would unfortunately capture Steve Smith who purchased the rights to "The Red Green Show" and posted them to YouTube on a personal basis. It would capture his content as a "program" since the content is of a type that requires unionized tradesmen/actors to create it.

However, YouTube does not own the rights nor has it selected this content, so would not be considered an online undertaking while delivering this content. (as per my proposed definition of online undertaking). (3) Subsection 2(3) of the Act is replaced by the following: Exclusion — carrying on broadcasting undertaking

(2.1) A person who uses a social media service to upload programs for transmission over the Internet and reception by other users of the service — and who is not the provider of the service or the provider’s affiliate, or the agent or mandatary of either of them — does not, by the fact of that use, carry on a broadcasting undertaking for the purposes of this Act. 34. While this much discussed exemption appears in the proposed act, it declares that the person isn't considered a broadcasting undertaking, it does not declare that the person's content isn't a program.

So while madame Tremblay won't be a broadcaster, her cat video will be considered a program transmitted by an online undertaking for whom regulations will apply as well as obligations to contribute to media funds. This means that madame Tremblay, while not herself regulated, will see YouTube reduce her ad revenues by the percentage that the CRTC requires YouTube to contribute to legacy broadcasting funds. 35.

Furthermore, while the text of C-11 provides vague exemptions for undefined "social media", it does not cover citizens who have their own web sites, their own apps, use web hosting services etc and they become broadcasters as soon as their content has an image or audio. Consider a photographer who maintains an on-line portfolio of his/her work. Consider a videographer who maintains a portfolio of videos he has done in order to attract contracts to participate in a video project. One pays Vimeo to host such, and if Vimeo needs to contribute to funds, content creators will be charged more. 36.

This is why it is important to limit the scope and jurisdiction with the

definitions, instead of granting the CRTC powers over anything that has an image/audio and then have some convoluted exemptions that need to constantly change as the Internet evolves. 37. A BDU can simply raise its retail rates by 3% to make its regulatory 3% contributions. YouTube does not charge end users. It collects advertising revenues as well as premium membership fees to be distributed to content creators. Therefore, the contribution obligations that will be imposed will result in decreased revenues for content creators, the very opposite of what C-11 was advertised by politicians as doing. 38.

Things get complicated when a citizen posts a home video that contains commercial music which YouTube's "ContentID" detects and advertising is added to the video to pay the SOCAN royalties for the song. Does this video become "broadcasting" because of this? Consider that in some cases, the music is incidental to the video while in other cases, the individual create his own version of a music video for that song (so primary purpose is to publish that music). Some artists who own their rights will post directly on YouTube, while other go through a record company.

Independent artists will see reduced revenues from YouTube due to YouTube being forced to contribute to legacy media funds. 4

Loi sur engagement des artistes: http://legisquebec.gouv.qc.ca/fr/showdoc/cs/s-32.1

Vaxination Informatique 8 of 21 04-Octy-2022 C11: Definition of Program Definition of Broadcasting C-11: broadcasting means any transmission of programs — regardless of whether the transmission is scheduled or on demand or whether the programs are encrypted or not — by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place; (radiodiffusion) Proposed: broadcasting means any transmission to the public of programs by radio waves, distribution undertaking or online undertaking but does not include any such transmission of programs that is made solely for performance or display in a public place; (radiodiffusion) 39.

Proper

definitions of "program", "distribution undertaking" and "online undertaking" allow for far simpler more precise definition of what is considered "broadcasting" which does not need the mention of scheduled or on-demand as the are contained in the undertaking

definitions. 40. As well, anachronistic terms such as "broadcast receiving apparatus" used at a time when only televisions could display images/sounds, and televisions' sole capability was to display broadcasted content. Today, a watch, telephone or a refrigerator can become a "broadcast receiving apparatus" and displaying received programming is one of many capabilities. 41. The notion of "encrypted" dates back from the era where "pay TV" was distributed on coax frequencies that were scrambled and when you subscribed to them, an installer would come to remove the scrambler for those channels.

Another anachronistic mention. 42. It should be noted that most streaming rights include requirement by rights owner that the streamer use specific technologies to implement DRM to prevent piracy. With the Sony data breach of a few years ago, certain contracts between Bell Media and US studios were made public and they even specified which version of Flash and Silverlight were acceptable to ensure adequate DRM. Retaining the notion of encryption in updated bill would mean

interpretation in a 2022 context and this should carefully studied to ensure no unwanted side effects. Overall, its mention is redundant in defining "broadcasting" and it should be removed.

Vaxination Informatique 9 of 21 04-Octy-2022 C11: Definition of Online Undertaking Definition of Online Undertaking C-11: online undertaking means an undertaking for the transmission or retransmission of programs over the Internet for reception by the public by means of broadcasting receiving apparatus; (entreprise en ligne) Proposed: online undertaking means an undertaking which selects programs to be included in the library available to customers and obtains streaming rights for their transmission via the Internet for reception by the public.

Internet means, for the purposes of this act, a transmission whose destination is allowed to be outside the undertaking's own IP network. Streaming means the transmission of a program for the purposes of viewing during its transmission with no right to retain a copy for determinate or indeterminate periods after transmission has completed. 43. The definition of on-line undertaking restricts "broadcasting" only to activities where the undertaking chooses and gets rights to programs.

This properly limits scope to mimic legacy broadcasting and eliminates the issue of "social media" where the content is not chosen by the distribution undertaking. The wording does not use "programming control" to ensure clarity against other uses of "programming control" which can include discoverability algorithms or scheduling of when a program is aired (or released). 44.

In a hybrid case such as Amazon which not only acts as a streamer with its own portfolio of programs, but also resells additional "channels" from other streamers, these other streamers should be considered individually and they would have to make their own contributions and abide with Broadcasting Act based on their own revenues (and Amazon not including such from its own) In such cases, Amazon has retransmission rights but not rights to the content.

This is because such "channels" can be made available on many such platforms and revenues should be aggregated instead of split into many pieces of pie, each too small to merit attention. 45. The definition of Streaming is needed to exclude the purchase/rental of music and videos which are the equivalent of record/video stores which were not regulated under the Broadcasting Act. In cases where the purchased/rented program reside "in the cloud", there is usually the right to download to the device,

whereas for pure streaming, there is no such right. Streaming, rental and purchase of digital media each require different rights for the service. 46. The definition of Internet is needed to differentiate a streaming service such as Netflix from legacy BDUs who deliver the linear TV signals using with IPTV on the same connection as the Internet service. The BDU's contract with TV stations limits distribution to end users connected to the BDU's own network (originally a cable company's coax cable plant). Today, this is interpreted as users connected to the BDU intranet using IP address controlled by that ISP/BDU.

This bounds the distribution rights to predetermined geographical boundaries of the BDU's network coverage. These IPTV BDUs distribute TV channels and still have the CRTC's obligations for must carry, 9(1)h etc and thus extremely different from a streamer (SVOD) from a regulatory point of view. 47. SVOD/Streaming services are differentiated by having rights to distribute to any IP address within a country for which they have rights. The definition of Internet in the context of this Act is necessary to differentiate between "Broadcast Distribution Undertaking" and "Online Undertaking".

Vaxination Informatique 10 of 21 04-Octy-2022 C11: Problems with 9.1 Problems with 9.1 48. Clause 9.1(1) (

f) which requires a broadcast undertaking (except online one) to obtain permission from the Commission to enter into ANY contract with a telecommunications carrier is highly irregular. Even where the Commission regulates telecom rates, it is not in the business of approving contracts between a customer and a telecom service provider.

And even the most legacy of broadcasters already make heavy use of telecommunication services to link their offices, access content from the Internet such as Getty Images, newswire services etc, as well as transmitting their TV signal over telecommunication link to the various distribution services that then distribute to all the BDUs. The Commission has never interfered with such as this is just a normal customer contracting with a telecom carrier for carriage of content-agnostic packets.

What is next, forcing broadcasters to obtain permission from the Commission to obtain electrical service in their offices? 49. If the intent of this clause was to require permission for a legacy broadcaster to become an online undertaking, then this clause needs to be rewritten completely. 50. Clause 9.1 (1) (

g) requires a person carrying on a distribution undertaking to give priority to the carriage of broadcasting. Such a person cannot give priority to broadcasting if the network carries only broadcasting. If the network carries any type of content which includes broadcasting, the granting of a priority violates Telecom Act network neutrality rules and principles. The word "requires" would also require every small and large telecommunications provider to install very expensive DPI equipment to detect packet flows that are "broadcasting" and grant then priority. 51.

A number of legacy BDUs including Rogers Shaw and Vidéotron have moved their coax platform to the Comcast X1 system. As part of the Rogers-Shaw merger hearings, it was revealed that Comcast receives royalties for each linear TV channel carried by a BDU. (as opposed to a flat fee for a licence to use the Comcast X1 software). The side effect is that all will progressively move linear TV channels to applications that will appear on the set top box menus (instead of a channel number). This avoid the royalties issue.

But it also means that linear TV channels, in becoming apps, must be treated the same way as Netflix and other such apps on the same STB. As such, the damage to network neutrality caused by this clause is immense. As long as the BDU retains one legacy linear TV distribution, it remains a "person carrying on a distribution undertaking" and would be forced to violate network neutrality rules. 52. Both Broadcasting and Telecommunications acts have clauses that prevent conflict between the two. The Broadcasting Act does not apply to a Telecommunications Service and vice versa.

This was tested with the Mobile TV case both at the CRTC5 and Federal Court of Appeal6. The ruling is that when broadcasting content is transmitted over a telecommunications link, the Telecommunications Act applies to the transmission of data in a content agnostic way. This was also the basis for subsequent CRTC decision on Differential Pricing (another Net Neutrality decision). As such, clause 9.1 (1) (

g) would unravel the advances Canada has made in protecting the Internet and keeping it content agnostic, a feature which has been key to allow innovation and new industries to emerge and new competitors to emerge. 5 Mobile TV decision: CRTC 2015-26: https://crtc.gc.ca/eng/archive/2015/2015-26.htm 6 Mobile TV decision: FCA: https://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/145408/index.do

Vaxination Informatique 11 of 21 04-Octy-2022 C11: Problems with 9.1 Problems with 9.1 (cont) 53. Clause 9.1 (1) (

i) a requirement, without terms or conditions, for a person carrying on an online undertaking that provides the programming services of other broadcasting undertakings in a manner that is similar to a distribution undertaking to carry programming services, specified by the Commission, that are provided by a broadcasting undertaking; 54. A television station's programming has linear TV rights to allow distribution over the air as well as via BDUs. It does not necessarily have SVOD rights needed for an SVOD7 service.

And it is possible such rights are held exclusively by another company. (eg: APTN might have linear rights for Northern Exposure and Bell Media hoarding exclusive SVOD rights for it preveting APTN from putting the program on an online service. (theoretical example) 55. As a result, the clause needs to change to "...provides the programming the services of other online undertakings..." This means that the CRTC can only force carriage of a service that already has the rights to be on an online undertaking. 56.

Corus announced StackTV, a value-added bundle marketed as carrying its linear TV signals such as HGTV Canada which will be included in Amazon Prime's "extras". Despite use of familiar linear TV branding, this is a new service built with new rights and on-demand platform. 57. There may an instinct to extend the "must carry" policy to on-line undertakings to ensure "essential" channels remain available. However, would it be fair to force Amazon to carry service X when Bell's Crave, which doesn't already carry such channels won't be forced to carry a competitor's programming? 58.

More importantly, because the Internet fosters rapid change and innovation, Amazon Prime's business model or allowing "extras" to be purchased is not used by all, and there are many content providers who sell direct to consumers via an app that is loaded on a device such as Roku, Apple TV, computer etc. They operate their own "online undertaking", at which point, the issue becomes whether their app can be made available via the appliance's proprietary store (Apple's App store for Apple TV for instance). 59. In the case of an app, the store itself only sells the application.

In no way is this a broadcasting activity. Broadcasting happens when the application is started and connects to the content provider's server to download broadcasting content over a telecommunications link, during which, the application store has no involvement. Forcing Apple's app store to carry the OUTtv application would be beyond broadcasting. 60. It is wrong to think that one can simply transpose the forcing of carriage from legacy model onto the Internet model.

Online Undertakings are not only different from legacy television, but also different from each others because they are free to experiment and innovate with different business models which means there cannot be a single solution that fits all. 7 SVOD: Subscription Video On Demand.

Vaxination Informatique 12 of 21 04-Octy-2022 C11: Download vs Stream Download vs Stream 61. The Netflix service offers downloads for off-line viewing. Not all titles have this feature enabled and the FAQ explains why8: 62. The behaviour of the Netflix download service is in fact that of a program rental, and Netflix confirms that different rights are needed for this (rights which are not always available because exclusive rental rights may have been purchased by another media outlet). Therefore, this function should not be regulated as a streaming service because it is not. 63.

The Commission did not regulate movie rental services like Blockbuster and has no business regulating the equivalent in the digital world. 64. Consider there are services such as iTunes while also sell movies digitally, and when purchasing DVD/ BlueRay, one usually gets a coupon to download a digital copy from a service. C-11 has no business granting the CRTC jurisdiction over these activities. YouTube and music 65. YouTube has a subscription-based music service which fits my proposed online undertaking definition and is functionally similar to Spotify, Apple Music and other music streaming services. 66.

However, when it comes to the "open" YouTube environment, it becomes much harder to define the activity because in many cases, record labels (such as Vevo) upload music as a user (which might fit "social media" activity), and in some cases, the artist uploads the music on their own channel which is even closer to "social media". But in cases where a record label has negotiated a different share of advertising revenue, does this become "broadcasting" ?

C-11 doesn't even come close to trying to understand all the subtleties that exist on a single service such as YouTube, let alone the vast portfolio of different services that exist today, and will be created in the future with business models not yet invented. 67. Trying to legislate an ever changing industry with many different business models, and innovative ways to use content is never going to be easy, which is why C-11 must not try to capture all, and should focus only on a well circumscribed portion which best emulates legacy media.

It should be noted that YouTube does pay royalties to SOCAN/rights holders. So this music does not escape royalties. 8 Download FAQ: EN: https://help.netflix.com/en/node/54870 FR: https://help.netflix.com/fr-ca/node/54870

Vaxination Informatique 13 of 21 04-Octy-2022 C11: Other Items Other Items Social Media 68. Bill C-11 makes numerous mentions and exemptions based on the undefined term "social media". This is unacceptable, especially as the term's meaning is likely to evolve over the years. My proposed

definitions of program and online undertaking eliminate much of the need to refer to social media. When Twitter obtains rights to broadcast a football game live, this becomes a program and is distributed by Twitter as on-line undertaking for that activity only. When a user posts a cat video, he/she should not have to hire a lawyer to read the Broadcasting Act to go through all clauses to find the one that exempts the user but does not exempt the platform.

But what happens with Vancouver's Linus Media Group with 80 employees and revenues in the millions when they post to YouTube and what happens to their own streaming platform "Floatplane" ? 69. Legacy BDUs obtain revenues solely from subscriptions and demanding BDUs contribute to funds does not impact content creators whose business is with a television station. For sites such as YouTube, the content creator's revenues are derived from advertising revenue inserted by the platform. The rates charged for advertising are highly dynamic and auction driven.

If the platform is called upon to contribute to legacy broadcasting funds, it cannot raise advertising rates and as a result, will draw contributions from the share of advertising revenues sent to creators. Contributions to legacy funds will come from digital-first content creators. 70. Gets worse with services such as Vimeo where the creator pays Vimeo to host and distribute their videos. Contribution regime would result in creators having to contribute to legacy funds via higher payments to Vimeo. May not be what the politicians intended, but pedantically, that is what the text of the law will do. 71.

One should not apply an old policy which is incompatible to new business models. In this case, the desire to help content creators by having digital platforms contribute to legacy funds will hurt content creators. News 72. In the good old days, newspapers were published in paper only in the morning, radio provided audio news during the day, and television provided the evening news at 18:00 and 23:00. The 3 had their own distinct markets and did not compete. Today, newspapers have videos, and television stations have text articles with photos and cross ownership is frequent with shared news and web sites. 73.

Under the current

definitions of C-11, all 3 become broadcasters due to the nature of their web site which means they will be saddled with the heavy CRTC regulatory hand and obligations to fund legacy media. 74. It should be noted that the assertions that Google "steals" most of the advertising revenues are misleading. Google acts primarily as an advertising broker where it keeps only a percentage of the revenues for ads placed on web sites such as a newspaper that choose to use Google Ad Manager. Ad Brokers have existed for ages in legacy linear television.

Google and others did not steal ad dollars, they acquired a huge market share of advertising brokerage business and yes, ad dollars are spread amongst a lot more properties, not just the original CBC, Radio Canada, CTV, TVA, Global and CityTV on channels 2 to 12. It is something called competition, a concept unfortunately rarely seen in Canada and when it happens, the large incumbents complain bitterly.

Vaxination Informatique 14 of 21 04-Octy-2022 C11: Heavy regulatory burden Heavy regulatory burden 75. The current Broadcasting Act gives the CRTC powers to exclude from licensing certain broadcasters/ BDUs. This requires recurring filings by every BDUs to inform the CRTC as well as maintain their exemption if they remain under the size threshold. Because of the relatively small number of BDUs, this has remained manageable process. Another option is for the CRTC to exempt a whole class such as with its Digital Media Exemption Order which started in 1999 (and evolved over time).

Such exemption does not require reporting because it includes a complete class. 76. Politicians promise the Broadcasting Act should apply only to web giants. This implies reporting by all targeted entities of some undefined metric (revenues, number of subscribers, number of views) with all entities deemed regulated until they receive an exemption from CRTC. You impose regulatory burden on thousands of businesses when your intention is to capture only a handful. And this process will still capture all large businesses in Canada (banks, mines, etc). 77.

Under subsection 2(3) (Exclusion - certain transmissions over the Internet) of C-11: (

a) that is ancillary to a business not primarily engaged in the transmission of programs to the public 78. The use of the vague "ancillary" term will require subjective

interpretation on a case by case basis by the CRTC with no appeal possible. This basically means that an enterprise in Canada which distributes "programs" (image and/or audio on a web site) will need to file with CRTC to justify a formal exemption from regulation. How long will such exemptions take to obtain, how long will they last and how much paper work will be needed to renew? 79. For instance, a digital store with extensive photographic catalogue of items for sale would have a hard time arguing its photos are ancillary to its business as the catalogue is core to its business.

Audio book company or podcaster would equally have similar difficulty proving their audio is ancillary to their activities. With both C-10 and C-11, the government refused to update the

definitions of "program" so this problem is desired and self inflicted. (2.3) (

b) that is part of the operations of a primary or secondary school, a college, university or other institution of higher learning, a public library or a museum; or 80. So an organisation other than primary, secondary, college or university that provides on-line courses will be regulated. There are a lot of on-line educational enterprises such as udemy, Masterclass, Brilliant and many others. 81.

The text of C-11 will result in the CRTC having to impose heavy regulatory burden on a large swath of Canada's fledgling digital economy because of the lack of a clear definition to narrow the scope to the "web giants" the Minister says his law targets. 82.

It is far more efficient to define exactly who is targeted by the act rather than include everyone and provide for the CRTC to maintain exemptions on a case by case basis which would impose an undue regulatory burden and uncertainty when someone invests in Canada and having to wait a few years for a CRTC decision on whether they were granted an exemption or not. 83. It is wrong for the CRTC, the hammer, to view all media as a nail. A tool designed to regulate a few BDUs and TV stations is not the right one to manage a large number of individual and different Internet outlets.

Vaxination Informatique 15 of 21 04-Octy-2022 C11: Discoverability Discoverability 84. There has been much discussion on discoverability and algorithms. However, this misses the whole point of a new digital economy. Digital platforms are not the enemy, they provide huge new opportunities. Opportunities is plural because of the diversity of business models which require different approaches to success. Unlike the uniform business models of legacy linear TV and BDUs, there is no one-size-fits-all to regulating digital media. 85.

Canadian YouTubers have become successful because they learned to leverage the YouTube algorithm. Digital platforms have a constantly evolving algorithm based on complex parameters and sources of data. Being forced to document the specific algorithm would inhibit rapid innovation and fine tuning which is why platforms are so reluctant to discuss them. It is best to work with the system instead of against it. CRTC regulation, even when "non specific" would work against it. 86.

If a 13 year old Wyatt Sharpe can get more views for one of his programs than what CTV gets for some of its Canadian programmes, one should wonder why legacy media giants in Canada have failed to succeed in a digital economy. That is what needs to be fixed. 87. For SVOD platforms such as Netflix, the algorithm is less well known, but likely very similar in terms of presenting to a user a set of programs that are a mix of the user's preferences, watching history, trending programs on the platform and many parameters. There is no prejudice against programs that are Canadian.

There is prejudice against programs that are added to the library and have no promotion and few searches or viewers. 88. In the 1980s, Montréal group "The Box" had a music hit "L'affaire Dumoutier". The song had portions with some French, except when I heard it on a Toronto radio station with all French portions edited out. Back then, it was station managers who made such editorial decisions. 89. Digital platforms are in the business of making viewers happy.

If their marketing research showed that English Canadians resent being forced to listen to any French, they'll (wrongly) assume all those with an "English" profile setting will want to be proposed English-only content. As such, French language content is being discriminated against based on user preference. Instead of regulating platforms, why not have a meeting with platform CEOs to ask them to cater to bilingual Canadians and allow multiple content language preferences to be separate from user interface preference. This should include English, French, Cree, Inuktituk content (and others judged relevant).

Surely, they are aware Canada is not unique, especially as their home country is bilingual with English and Spanish. Users who only want English can check English only but those open to bilingual content can check multiple boxes. Switzerland and Belgium would likely be other countries with similar needs. However, regulating language of BBC, Radio France, or a streaming service from India makes no sense. There is no "one size fits all" for such a sensitive issue. 90. One should consider that neither CBC Gem nor Radio Canada's tou.tv carry each other's programming.

Perhaps this is one area where the government can intervene to make its own broadcaster merge the libraries on each service so Canadians can be exposed to both contents (and while we are at it, make those platforms also support APTN content). 91. Where a goal can be accomplished without regulation, regulation should be avoided.

Vaxination Informatique 16 of 21 04-Octy-2022 C11: Discoverability Discoverability (cont) 92. In the legacy business model, content producers declare "mission accomplished" when the sale is made to a TV station/network. The English TV station declares "mission accomplished" once the mandated CRTC quota has been reached. For them, success is defined how much of their TV

schedule can be filled with US programming. In French Canadian market, success depends on their own content being popular. They have a vested interest in making their content successful. 93. The addiction to SIMSUB is so strong that when the CRTC removed it from the Superbowl, Bell Media lobbied the then President of United States to include in the revised NAFTA deal a clause forcing the CRTC to revoke that specific decision. So when complaints are made about new platforms not prioritizing enough Canadian content, one should look first at Bell Media, Corus and Rogers Media.

Does SIMSUB really foster Canadian culture? 94. In the context of C-11, "Discoverability" and "algorithm" are seen as regulatory impositions to emulate the Canadian content quota regulations designed to put content on a schedule, something that isn't applicable to digital. Instead, a modernized policy should be to encourage content producers to leverage the algorithms to their success. C-11 focuses its changes on CRTC/Broadcasting Act and totally misses the boat on helping content succeed in a digital world.

The CRTC, an administrative tribunal, is the wrong body to participate in the promotion of content and education of content creators to best leverage and succeed in a digital world.

Vaxination Informatique 17 of 21 04-Octy-2022 C11: The Big Picture The Big Picture Scheduled vs Promoted 95. Bill C-11 does not modernize the Broadcasting Act, it extends its reach to the Internet. 96. In an era of scarcity in the number of hours of programming per week on linear TV channel, and limit of number of channels broadcasted, the CRTC's role was to ensure a minimum amount of Canadian content was placed on the linear system's schedule. It also controlled which channels could and could not be placed on a BDU system for both Canadian vs foreign content9. 97.

The CRTC also protected broadcasters from competition with tools such as genre-protection afforded to certain stations and limits the number of radio stations of a genre depending in a city's size. 98. In the past "mission accomplished" was declared when a broadcaster reached its quota of Canadian content, a quota that is now negotiated by Bell/Rogers/Corus to maximize opportunities to air US programs. Success of the content is not a consideration, especially for English television whose business model was reselling US programming with SIMSUB.

In French language television, the situation without SIMSUB is different as the business model relies on the success of locally produced content. 99. Today, the scarcity is gone and a online service's library is quasi unlimited. Ensuring presence of Canadian programming in such a library is no longer a challenge. Content producers must learn to deal with different business models. 100. The new sea of available content raises the challenge of raising one program above sea level. The so- called "discoverability". C-11 attempts to deal with the issue with the CRTC's only tool: the hammer.

And that only tool means imposing an obligation to prioritize Canadian content presented to users. In a digital era, users choose content and reject being told what to watch. 101. Consider programs such as Game of Thrones, Mad Men, House of Cards or Orange is the New Black. These huge successes were due to proper promotion via advertising, word of mouth, use of social media. Schitt's Creek overflowed CBC and became popular on Netflix (while it was on it) because of that, not because of some regulation that forced carriage and visibility. 102.

As an administrative tribunal, the CRTC is the wrong body to deal with promotion of programs. Promotion is not about imposing a policy (to not use the word "algorithm") to force Canadian programs to appear on a list proposed to users.. Promotion is about creating desire for people to want a program. This is done via different forms of advertising (including social media buzz) as well as ads on different platforms such as YouTube , Facebook and Twitter. It is when there is promotion that people starts to search for "Schitt's Creek", and that triggers the algorithms to start proposing to more and more people.

The algorithm works fine, one has to learn how to use it via promotion of content. 9 Recently, the CRTC withdrew RT and RT France from list of allowed channels on BDUs due to content. "... is not in the public interest as their content appears to constitute abusive comment". This power to block an outlet's distribution based on content, when extended to the Internet is very dangerous if/when abused.

Vaxination Informatique 18 of 21 04-Octy-2022 C11: The Big Picture The Big Picture (cont) 103. Modernizing the broadcasting industry is more than changing Broadcasting Act. It is about helping content producers succeed in a digital world, a success that is potentially far greater than could ever be achieved with legacy media in Canada. 104. Focusing on promotion of Canadian content instead of regulating platforms to force content on users preserves the permission-less nature of the Internet which is necessary for continued innovation at rapid pace of all of the digital economy.

Instead of fighting the tidal wave, we must learn to ride it to success. 105. It is defeatist to think Canadian content cannot be successful and must be shoved into people's feeds. If good content is properly promoted, platform's own algorithms will amplify the promotion and make the program even more successful. 106. The Canadian Govermnment has many programmes and institutions to help make Canadians successful. Export Development Bank for instance helps Canadian industries export. And Téléfilm Canada10, another crown corporation, has a role that fits perfectly in the need to promote Canadian content.

It just needs to be put on steroids to amplify that promotion to citizens of the world instead of promoting content only to distributors. 107. Instead of focusing on making content available, a modernized broadcasting act should focus on making content successful and that means promotion. Legacy media as the enemy of Canadian culture 108. Protecting the business model of the legacy media industry by saddling new competitors with a Broadcasting Act which is incompatible with new and ever changing business models is not the right approach. The right approach is to grant legacy media greater flexibility to evolve.

The CRTC had done so with its DMEO11 which evolved since its inception but legacy media preferred to protect their legacy revenues. The DMEO was designed to put Canadian digital streamers on equal footing with others (except for GST which is outside of CRTC's jurisdiction). "If you don't cannibalize yourself, someone else will". Steve Jobs12 109. An old company that doesn't react to a new competitor will lose customers and only has itself to blame. 110. In 2010, Bell Canada set out to spend billions to get into legacy linear television by buying CTV and built a linear BDU system.

It then spent billions acquiring Astral mostly to gain the rights to HBO programming (and eliminate the last large independent production in English Canada). In 2010. Netflix entered Canada with 0 customers. 111. To protect its investment in linear broadcasting Bell refused to cannibalize linear revenues.

So when it started CraveTV, it was an extension of its BDU service, granting access only content to which you are subscribed via BDU and limited content to "catch up" and old library rights (not current programs) 10 Téléfilm Canada "About Us": https://telefilm.ca/en/who-we-are/about-us 11 DMEO: Digital Media Exemption Order 12 From the book "Steve Jobs" by Walter Isaacson., Simon & Schuster.

Vaxination Informatique 19 of 21 04-Octy-2022 C11: The Big Picture The Big Picture (cont) 112. The CRTC, seeing this abuse of the DMEO changed the rules to nudge Canadian distribution undertakings to make their on-line service a true SVOD not tied to BDU/ISP subscription. Illico and Bell went this route, but Shomi (Rogers/Corus) chose to exit market. Yet, Bell still crippled its Crave with limited programs and quality. It stopped downgrading multi channel audio to stereo only in 2020. 113.

It Today, the very people who are "stakeholders" that want C-11 are the very people tied to the legacy system who refused to go digital and have now realised the missed the train and let foreign companies get the market. . And many blindly support C-11 based on what the Minister promises and not on what the text actually means. 114. At Heritage Committee, during the slanted hearings in June, Bell Canada complained about how these online undertakings are making it harder for it to acquire US content.

How can Bell arguing for regulations to make it easier for it to buy US content be seen as fostering Canadian cultural interests? 115. A few decades ago, linear media decided to shift the good programming to paid speciality channels so of course, the OTA channels are left with US cop shows and a couple of reality shows and decreasing interest means decreasing advertising revenues. That is their own doing. So when Bell Canada threatens to be forced to reduce its news on CTV due to falling revenues, this needs to be taken with a grain of salt.

Had it put Game of Thrones on CTV instead of a speciality channel, it would have had plenty of revenues on CTV. And if news on CTV is not profitable, how come Bell Media has an ever growing list of speciality news channels such as CTV News Channel, CP24, BNN Bloomberg (which share same news resources). 116. Nevertheless, the future of news services in Canada is a great question. This is not covered by production funds. A way needs to be found to make trusted news work in a digital environment for when linear goes away. Newspapers are moving to digital with varying levels of success and failures.

It is the wrong time to cast regulations in concrete when an industry is in flux and hasn't yet found a business model that works for news. Funding and Contributions 117. Legacy broadcasting production and distribution are deeply intertwined partly because of the very regulation that made them dependent on each other. This was made worse with vertical integrations where the large BDUs contribute to a fund that benefits their own production companies who then sell to their own TV stations.

But even prior to vertical integration, the rules on Canadian content ensured that the money stayed in Canada so contributions by cable companies would not flow to a TV network not owned by a Canadian. Vertical integration meant the money stays in the same family except for BDU-only operations that contribute to funds that help their competitors. 118. It should be noted that Bryan Adams first record label was A&M, an American company. If you want your record to sell worldwide, you need to sell worldwide rights to your music. The same goes for video productions. 119.

With the advent of foreign competition in Canada, and the phasing out of legacy linear BDUs and TV, there needs to be a complete rethink of funding philosophy that goes beyond the definition of Canadian content. As such, expecting online undertakings (even if limited to Netflix, Disney, Amazon and part of YouTube) to contribute to legacy funds is the wrong approach.

Vaxination Informatique 20 of 21 04-Octy-2022 C11: The Big Picture The Big Picture (cont) 9 (1) (

h) funding 120. The 9 (1) (

h) funding mechanism is challenging. BDUs fund CPAC which has no advertising. But most people watch via CPAC's web site which offers multiple simultaneous streams and video on demand that cover simultaneous events, something which is not possible on linear television. Yet, those who watch via CPAC's web site do not help CPAC's funding. As CPAC is its own on-line distribution undertaking (via its own web site), C-11 would capture it for contribution to funds. 121. The 9(1)(

h) mechanism is based on a per subscriber contribution which is not applicable to many open services that are ad based and without subscribers. Yet, CPAC is an essential part of democratic life and plays an important role. How should it be funded? Is it fair to impose 9(1)(

h) contributions to on-lines services that are subscriber based but not those that without subscription? There needs to be a fair way to draw revenues to fund services judged important or essential to Canada. 122. Pelmorex has its Weather Channel/Météo Média granted 9 (1) (

h) revenues which were part of an agreement for Pelmorex handling the national alerting system for linear TV, radio and cellular phones. Replacing this funding is essential because the alerting system (tornado alerts, amber alerts) is essential. 123. Other channels such as, AMI-tv, CBC News Network, Canal M, Ici RDI, Omni, TV5. Some of this funding is regional. For instance, Ici RDI gets $0.10 per subscriber in anglophone markets. The CRTC has judged these to be important enough to warrant per-subscriber revenues. All of them are seeing revenues decline as BDU subscriptions diminish. 124.

When there was a gap in federal government, the CRTC filled it using its limited tools. In this case, the 9(1) (

h) contributions was the tool the CRTC had as a condition for a regulated BDU to operate in Canada. The gap must be closed to fund the 9(1) h channels in a modern digital world and help them go digital. Funding the funds 125. The diversification of the industry makes it impossible to fund the funds (whether video or music) in a fair and equitable way, especially as business models evolve constantly and new services would be designed to avoid those contributions. Cat and mouse game. 126.

The federal and provincial governments already fund many cultural activities such as theatres, festivals, the National Film Board, Téléfilm, museums, CBC/Radio Canada as well as a number of provincial stations. There is much funding available for specific endeavours within television/movie production such as visual effects, tax breaks etc. 127. In the end, the simplest way to replace the legacy model of funding of radio/television is to rely on general tax revenues which becomes agnostic of the rapidly evolving distribution industry.

This detaches creation of content from the ever changing distribution business models and thus applies fairly to all. More importantly, it frees the distributors to innovate and evolve and compete without undue regulatory restrictions. Similarly government funding of what are know as 9(1)(

h) services would replace the currently undue burden placed on BDUs and allow these services to move to digital distribution.

Vaxination Informatique 21 of 21 04-Octy-2022 C11: The Big Picture The Big Picture (cont) 128. Involving an organisation such as Téléfilm Canada or other to help content producers not only negotiate carriage on modern platforms but also promote the content in modern ways to make Canadians and others want to view the content. The outlets and thus opportunities for Canadian content have multiplied since the days of CBC/CTV/Global/TVA. 129.

Removing funding burden from legacy BDUs will put them on equal footing with rest of industry and given them a chance to evolve from their legacy linear system to more compelling offering. 130. The goal is to get Canadian cultural products to Canadians and possibly export. A foreign enterprise such as Netflix may get the profits, but if they show Canadian culture and have paid for production is that much different than Bell sending its profits to its German shareholder13? 131.

Also, proper funding of CBC and Radio Canada will ensure their mission to create and air Canadian content and available to Canadians (and if done right, CBC/Radio Canada could also make their platform viewable worldwide and keep worldwide rights). We have CBC/Radio Canada, lets use it. Conclusion 132. As changed by the existing Bill C-11, the text of the Broadcasting Act will be unfit to allow efficient regulation. It does not match the scope promised by the Minister and no Policy Direction will change the text of the Broadcasting Act (nor can it).

Ideally, the whole Bill should be rejected and the Minister told to do his/her homework, or alternatively,

definitions must be changed to reduce the damage that Bill C-11 will do to the digital economy in Canada. Jean-François Mezei Vaxination Informatique CP 1016 Succ Pointe Claire Pointe Claire QC H9S 4H9 jfmezei@vaxination.ca *** END OF DOCUMENT *** 13 At a CRTC hearing newly minted CEO Mirko Bibic complained he had to ensure good return on investment to his German shareholder and downward price pressure due to having low wholesale prices would prevent that.