Opening Remarks to the Senate Committee on Transport and Communications on the Online Streaming Act Dwayne Winseck, Ph.D., School of Journalism and Communication, Carleton University and Director of the Global Media and Internet Concentration Project, October 18, 2022 Framing the Issues: 1. Today, instead of “a free and open Internet” we have a centralized Internet ruled by a relatively small number of access network operators, search engines, social media services and digital media content aggregation & distribution platforms. 2.

Consequently, many democratic and non-d emocratic governments alike are re-asserting their authority to regulate Internet services and to deal with enduring communication and media policy issues. Some of these efforts are good, others terrible; the best have been well thought out and are being revised as they evolve. The Broadcasting Reform Act could be one of the latter, but it is not on account of fundamental flaws in seven areas. 1. The bill’s intent to bring Netflix, Crave, Disney+ and Spotify under the Broadcasting Act and the CRTC’s authority is fine.

The problem is that the lines between what and who is in- versus out-of-scope is unclear. The definition of a broadcast program sweeps in a far more diverse range of people’s online communications than it should, and leaves it up to the CRTC to decide what it will regulate and what it won’t? At present,

section 4 is at war with itself on account of these problems and with the rest of the bill. Consequently, users could be regulated instead of capturing just large streaming services and platforms.

2. Clear thresholds based on market capitalization, revenue and audience size are needed to draw lines between what streaming services are covered and which are not. The European Commission’s Digital Markets Act and Digital Services Act, and several bills before Congress in the US, offer useful guidance on this point. 3. Bill C— 11 does not deal with market and gatekeeping power but should. The network media economy in Canada is large, complex and growing fast. It doubled in size from $45 billion in 2000 to $94.5 billion last year, as Figure 1 on the next page shows.

It is one of the top eight- to ten-biggest communications, Internet and media markets in the world. Most sectors are thriving and vibrant, as Figure on page 4 shows.

Figure 1: Growth of the Network Media Economy in Canada, 1984-2021 ($ millions) Source: Global Media & Internet Concentration Project <gmicp.org.

Figure 2: The Evolution of the TV Industry in Canada , 1984-2021 ($ millions) Source: Global Media & Internet Concentration Project <gmicp.org>.

Online aggregrators and distributors have emerged as significant players in Canada. In 2021, Google, Amazon, Apple, Facebook, Microsoft, Netflix and Disney combined had revenues of $15 billion from their media and Internet services in Canada— a 16% share of the $94.5 billion market. They have been steadily chipping away at the high levels of concentration in the media economy, and the TV marketplace specifically, giving people more choice, while program services now have more doors to knock on. They have also snuffed out competition in other areas, i.e.

Online Advertising, where Google, Facebebook and Amazon accounted for ~90% of the market. That said, the big six Canadian companies— i.e. Bell, Telus, Rogers, Shaw, Quebecor and the CBC— had combined revenue of $65.3 billion last year, or 69% market share— roughly four-and-a-half times that of the US “big tech” giants.

Figure 3: Top Communications-Internet and Media Companies in Canada, 2021 ($ millions) Source: Global Media & Internet Concentration Project <gmicp.org>.

In short, there are both well-established and new instances of substantial market and gatekeeping power. Bill C11 should confront this reality but does not. Just as the CRTC regulates the terms of trade between vertically-integrated BDUs and programming services, Bill C11 should expand the Commission’s capacity to do so for online aggregrators and distributors. This could include thresholds and asymmetric obligations for players with significant market and gatekeeping power, subject to periodic review.

This goal would be to create a “fair carriage” regime based selectively on “common carriage” and “must carry” principles, with a focus on: • terms of hosting, access, carriage, distribution • distribution of revenue; • a redefined concept of discoverability. The concept of discovery has been hijacked by the idea that it is all about promoting Canadian content. Instead, a better view would seek to open up and discover what’s inside the complex technical and economic blackboxes that now comprise our communications systems.

The idea that companies’ algorithms and source code should be ‘off-limits’ should be a non-starter (sec. 10(8)). The principle of “fair carriage” would aim to constrain gatekeeping power while promoting access to the content of small players and furthering the democratic values of pluralism and diversity. Similar principles could also apply to the Internet advertising system and serve as a unifying thread between C11 and the Online News Act (C18). 4. C11 sets out some minimum information disclosure requirements but punts the details to the CRTC to work out.

Information disclosure obligations should apply to billing systems, technical interfaces, APIs and set-top boxes, and be based on the reality that knowledge about audiences is a valuable resource.

5. Data and privacy protection should be included in the Act given how valuable personal and audience information is. 6. I am a fan of the CRTC, but C11 over-estimates the Commission’s abilities, independence from corporate influence, and commitment to public interests. Punting so much to the CRTC also means that the contentious debates now taking place will shift to inside the Commission, depriving the bill of the public scrutiny and legitimacy it deserves.

The bill is at odds with international human rights standards that frown upon standards for freedom of expression, privacy and data protection, etc. being set by regulatory tribunals vs government and Parliament. 7. C11 unwisely expands the scope for ministerial intervention in matters before the Commission.