THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Tuesday, September 18, 2018
The Standing Senate Committee on Transport and Communications met this day at 9:30 a.m. to examine how the three federal communications statutes (the Telecommunications Act, the Broadcasting Act, and the Radiocommunication Act) can be modernized to account for the evolution of the broadcasting and telecommunications sectors in the last decades.
Senator David Tkachuk (Chair) in the chair.
[English]
The Chair: Welcome back. I hope you had a good summer and are rested up. We’re going to have a busy fall, I think.
The procedure today is to listen to two witnesses to give us an opening salvo on the communications and broadcast study. When we’re done, we’re going to go in camera and discuss future business.
We were late receiving their opening remarks. We don’t have bilingual copies. They are in English. I’m going to leave it up to committee members who are of the French language to let me know whether they’re okay with distributing them. If not, I won’t distribute them. They have a right to their own language. I’m going to ask Senator Gagné, Senator Cormier and Senator Dawson.
Senator Cormier: It should be a decision of the whole committee. It shouldn’t be on our shoulders to decide whether we receive them or not.
The Chair: It doesn’t matter to us. We’re in the English language and they are in English. I’m asking you, are you comfortable with that? They don’t have to be distributed and I’m fine with that, if you don’t mind. Senator Dawson and I are pretty sticky about this stuff. At the same time, I’m going to leave the option with you. I understand one of them even has a diagram in it. If it’s okay with you, I’ll have them distributed.
Senator Gagné: I would like a copy, please.
The Chair: All right.
Are you okay, Dennis?
Senator Dawson: Yes. If I may, when it’s government — but individuals, it’s not for us to impose on them.
The Chair: I’m not asking to impose on them; of course not.
Senator Dawson: I think we should.
The Chair: All right.
I’d like to welcome you back. Last June it was authorized at committee to examine the report on the three federal communications statutes: the Telecommunications Act, the Broadcasting Act and the Radiocommunication Act.
We’re going to begin our new special today. I’d like to welcome our witnesses, Michael A. Geist, Canada Research Chair in Internet and E-commerce Law, Faculty of Law, Common Law Section, University of Ottawa; and Dwayne Winseck, Professor, School of Journalism and Communication, Carleton University and Director of theCanadian Media Concentration Research Project.
Thank you for coming to our meeting. I invite Professor Winseck to start his presentation, followed by Professor Geist, after which senators will have questions. The floor is yours.
Dwayne Winseck, Professor, School of Journalism and Communication, Carleton University and Director of the Canadian Media Concentration Research Project, as an individual: Thank you very much for inviting me to appear today. My comments will focus on the Telecommunications and Broadcasting Acts and five main themes.
Number one, I will say that instead of the systems metaphors that lie at the heart of the Telecommunications and Broadcasting Acts that encourage us to see these as systems as part of the unified whole, I propose we use the metaphors of layers and LEGO building blocks to understand the now emerging broadband mobile and wireless centric media ecology.
Second, whereas advertising-based broadcast television and radio have seen their revenues plummet, most parts of the network media economy are actually doing well.
Third, we live in an age of information abundance but high levels of media concentration persist and levels of vertical and diagonal integration in Canada are sky-high and need to be dealt with.
Fourth, the principle of common carriage, commonly known as network neutrality, is a very good tool for dealing with these realities.
My last point is rather than adopting a single convergence act, as many suggest, I think we should maintain separate acts, one for common carrier or net neutrality-like services like Internet access and mobile wireless services on the one side, and another that combines audiovisual media and some functional aspects related to privacy and electoral advertising rules that apply to Internet services such as Facebook and Google that serve mass audiences.
The rise of the Internet-centric media ecology challenges the systems metaphor that lies at the heart of the Telecommunications and Broadcasting Acts in favour of new metaphors like layers and LEGO building blocks that capture the fact that a broadband and mobile wireless-centric media universe makes it much easier to separate the access network from the content, apps and services that are delivered over them. As Eli Noam suggests, in the broadband era, communications and cultural policy will increasingly become common carriage policy, and I agree. While it may once have been desirable to bundle carriage and content together —
The Chair: Mr. Winseck, just a little bit slower so interpretation can catch up to you.
Mr. Winseck: Instead of bundling carriage and content together as we did with cable television since the 1970s, I think those days are numbered and on their way out as people increasingly cut the cord. We need to build two new acts around this fundamental reality that separates the carriage from the content.
I think there are a lot of interest groups out there trying to frame the situation we’re in as a crisis of the media upon which Canadian culture and democracy hinges. I think this is a very misleading framework. It takes some realities, very important realities, that advertising-supported media like broadcasting, television, radio and newspapers are in real trouble, and with them so too is professional journalism. This is a reality.
If we open our eyes and we look broader at the entire media landscape, we see an entirely different picture. If we look at the networks that we use to access a whole array of audiovisual media services, journalism and content of all kinds, what we see is very substantial growth across the networks that we use to access content.
When we look at television services, you can look at the figures I’ve offered today and see the revenues growing very rapidly over a 30-year period for networks. If we fast forward and look at the content and audiovisual media production side, the television and film industries, we see that investment in film and television production in Canada is absolutely soaring. A lot of this is from foreign investment in Canada, but this is actually a good thing. It helps to cultivate a domestic television and film industry and puts a lot of money into the film and television industry in Canada.
If we look at the markets where people consume television and film, we see a similar trend. We see that Canadian television revenues have soared over the last 32 years. This is because we’ve had fundamentally new sectors added to it. We’ve had pay television services added and now we have Internet streaming television service. Basically, there is no crisis in the media.
If we look across the entire audiovisual content services, we can see the same trend. We have fundamentally new services added and most of those services are growing rapidly. Any solutions adopted at a policy and legislative level need to zero in on where there are real difficulties, and that would be advertising-supported media.
We should disabuse ourselves of the idea that this is fundamentally something we can lay at the feet of Google and Facebook. Sure, Google and Facebook have taken a great deal of advertising in Canada. They now account for three quarters of all online advertising and about 40 per cent of all advertising in Canada together.
The bigger reality in my view, however, is that overall advertising spending has actually peaked and appears to be in decline on a per capita basis and in inflation-adjusted dollars. We have a shrinking pie with intensifying competition with new media giants. That’s the reality and that’s what needs to be addressed.
I think what we also need to realize is that yes, we live in an age of information abundance. In this age, many people say concerns with media concentration are outdated. I disagree. Concerns with media concentration are real because media concentration levels in Canada and, in fact, around the world are persistently high, much higher than many people often assume.
I think where Canada really stands out, and not in a good way in this regard, is in the sky-high levels of vertical and diagonal integration. Indeed, all of our main commercial television services in Canada are owned by telephone companies. This is a unique condition unparallelled in the world.
We also have a situation of diagonal integration, which is basically where Internet service providers, mobile wireless operators and cable TV providers are all one and the same players. That means Canada, unlike the United States or the U.K. or most of Europe, does not have stand-alone, mobile-only operators like T-Mobile, Sprint, Three or Vodafone. That means the competitive pressures are reduced considerably because the companies have one eye cocked to preserving their existing investments in the wire-line infrastructure and their cable television system instead of letting the mobile networks rip and give people much higher data allowances at much more affordable prices.
These are the realities. The consequences of these realities are significant. They’ve been documented now for over a decade by a wide range of studies from the FCC, from the International Telecommunication Union, the OECD and, from here in Canada, by studies commissioned by ISED or by the CRTC, Wall Communications or from Nordicity. All of them point to several fundamental realities. We see these in the figures I’ve shown you today.
We have, for example, reasonably good mobile wireless networks in Canada, but fibre optic networks lag to comparable countries in the OECD. Fibre optics lag in Canada relative to other countries.
Prices per gigabyte in Canada are sky high. Our data allowances, data caps are extremely low relative to comparable standards. We can see these in figures 8 and 9. We see that Canada is an outlier when it comes to the prices of data and when it comes to what people actually use their mobile phones and Internet service for, data use is very low.
One of the most staggering things is Canada sits at the level of Eastern European countries or some Latin American countries when it comes to broadband or mobile wireless adoption levels. If we look at figure 10, we see Canada way down at the right-hand side ranking 26 out of 34 OECD countries. We have an interesting structure for the industries here in Canada, highly concentrated, extremely high levels of vertical and diagonal integration. My argument is we are seeing the impact of these in terms of high prices, low data caps and constrained uses of the media. This is extremely significant because it puts a burden on Canadian businesses competing in international markets and it constrains what Canadians, as citizens, as consumers, as creators are able to do with their broadband Internet connections.
We need to do something about the structure of the industry that is hobbling Canadian businesses and Canadian citizens. I suggest one of the key things we can do is adopt this common carriage principle that we have had in this country since 1890. It has been brought up to speed over the last century to mesh with the times, particularly in recent rulings by the CRTC, the Broadcasting and Telecom Regulatory policy adopted in 2009-10. We had the mobile TV decision in 2015, and then we had the zero-rating decision just last year. Each of these realize you have to separate carriage from content and basically constrain the capacity of the carriers to limit what Canadians are doing with the networks.
We’ve got some very good tools that already exist within the Telecommunications Act. Section 27 prevents undue preferences and discriminatory rates in order to level the playing field so all people are able to use the networks without discrimination and undue preference being given to align services. This is very good. This should be included in any new legislation.
I think the crown jewel of the Telecommunications Act is section 36, which restricts carriers’ abilities to influence or control the content in messages of communication. That ought to be carried forward. It also ought to be brought out of hibernation and used to its fullest extent. The fact these things are needed is underscored by the fact that the carriers are consistently trying to push the line. It was their activities that prompted the hearings that led to the Internet traffic management policies, prompted the mobile TV case that they then appealed to the Federal Court of Appeal and lost, and the zero-rating practices. Now they have the FairPlay application before the CRTC in which they seek to set up a website-blocking scheme that would block Canadians access to information over the Internet. It would be very unusual in that it would not have any court oversight and no specific enabling legislation. We need to hold the line on some of these basic things to deal with the reality.
Let me finish with some quick specific recommendations. First, instead of adopting a single convergence act, we need to keep two separate acts: one for carriage, one for audiovisual media.
Second, we need to eliminate things like section 28 of the Telecommunications Act that could be used to subordinate common carriage principles to audiovisual media policy.
Third, we need to breathe vigorous and new life into section 36 of the Telecommunications Act. Proposals to put a levy on ISPs and mobile phones to fund Canadian content should be rejected because the Internet is a general purpose network that supports a diverse array of activities that go well beyond the distribution of audiovisual media services. Because it clashes with the 2012 Supreme Court of Canada ruling that rejected the IPs, ISPs, they can be treated as cable providers under the Broadcasting Act. We should have three values that inform a common carriage principle. One is, don’t discriminate. Second, don’t use networks as choke points to chase after other policy objectives. Third, we need to respect people’s privacy rights.
Finally, we should impose vertical separation along functional lines between carriage and content. The CRTC’s current vertical integration code is entirely inadequate, not up to the task and a source of many sorrows for many independent and smaller content providers in Canada. I think we should also transfer spectrum authority from ISED to the CRTC so we have the left hand and the right-hand knowing what they’re doing when trying to use spectrum allocation as a key lever in fostering competition in telecommunications and further development of the telecommunications field.
We should make the European Union’s General Data Protection Regulation’s values, requirements and conditions — such as algorithmic transparency, privacy by design, depersonalized data, and data portability — applicable across all of the layers of the Internet-centric communications media, Internet apps and services ecology. GDPR style regulations would enhance protection and control of personal information and align Canada with its European trading partners. Such enhanced powers would also give greater enforcement powers to the Office of the Privacy Commissioner. A national data strategy harmonized across the layers of this Internet-centric media ecology would enhance the use of data by Canadians for Canadians, rather than allow such data to be controlled by a handful of vertically integrated providers and dominant Internet platforms that are able to exploit unlimited data harvesting and their data holdings to fortify their existing positions of power and dominance.
The last one is the tricky and prickly question of subsidies. First, I think we need to bring subsidies for broadband connectivity into line with funding for the CBC. That is, raise it from $2.25 per Canadian per year to something more along the lines of about $35 per year, which is what the CBC gets per Canadian. There’s a huge disparity in terms of what we give for public service broadcasting, of which I’m a strong supporter, and broadband. I only seek to illustrate the magnitude of the difference here, not to undercut funding of the CBC.
In this age, where I started out, broadcasting television and journalism are in crisis. This is a void the CBC must be fortified to fill adequately. Any discussion of cuts to the CBC or restricting the scope of its activities should be dismissed from the get go. In fact, we would do well to think about raising the CBC’s funding to something that more closely approximates the levels of funding across the OECD. That would entail at least a doubling of CBC funding.
We could imagine what might happen there for creative cultural production here in Canada and a public service remit to fit the needs of all Canadians.
I think that’s where I will stop. Thank you very much for your time.
The Chair: Mr. Geist.
Michael A. Geist, Canada Research Chair in Internet and E-commerce Law, Faculty of Law, Common Law Section, University of Ottawa, as an individual: Thanks very much. Good morning, my name is Michael Geist. I’m a law professor at the University of Ottawa where I hold the Canada research chair in Internet and e-commerce law. I’m a member of the centre for law technology and society. My areas of specialty include digital policy, intellectual property, privacy and the Internet. I appear in a personal capacity representing only my own views.
This committee’s study places the spotlight on an exceptionally important question. As the Internet increasingly serves as the foundation for telecommunication, broadcasting, commerce and culture, what reforms are needed to the current communications laws and regulations? As you no doubt know, these issues are at the heart of a current broadcast telecom review commissioned by ISED and Canadian Heritage. I think both efforts will be valuable and I hope there are ways to ensure synergies between them.
My opening remarks will focus on three issues: The dangers of treating the Internet as equivalent to the broadcasting system, the realities of how the Canadian cultural sector is succeeding online, and some suggestions on how policy makers ought to respond to the changing landscape for communications in Canada.
You’ll see that some of my themes are going to echo some of the things you just heard from Professor Winseck.
First off, the danger of treating the Internet as equivalent to the broadcasting system. With the remarkable popularity of services such as Netflix and YouTube, there is a widely held belief that the Internet has largely replaced the conventional broadcast system — just ask my kids. Industry data, however, suggests that while the business of broadcasters and broadcast distributors such as cable and satellite companies won’t end anytime soon, it is undeniable that a growing number of Canadians access broadcast content through the Internet. Yet while it may be true that the broadcasting system is, or will soon be, the Internet, the Internet is not the broadcasting system. Indeed, any decision to treat the Internet as indistinguishable from broadcast for regulatory purposes would send us down a deeply troubling path that is likely to result in less competition, increased consumer costs and dubious regulation.
For example, the CRTC recently issued a report maintaining that Internet access is “almost wholly driven by demand for audio and video content.” However, its own data contradicted that conclusion, since it noted that 75 per cent of wireless Internet traffic is not audio or video. The reality is the Internet is about for more than streaming videos or listening to music. Those are obviously popular activities. They are not nearly as popular as communicating through messaging and social networks, electronic commerce, Internet banking, online health and searching for news, weather and other information.
Why is this important? I think there are several significant problems with viewing the Internet through the prism of the broadcasting system. Most notably, the approach leads to the view that if first we regulate broadcast and secondly broadcast is now the Internet, then that leads to we must now regulate the Internet. However, given that the Internet is much more than just broadcast such efforts would, by definition, regulate far more than the broadcasting sector.
That’s not to say there should not be Internet-related regulation. Of course there needs to be laws that apply online. However, targeted regulation is not the same as broad-based regulating the Internet as if it were akin to the broadcasting system.
Secondly, the realities of how the Canadian cultural sector is succeeding online. This will echo a bit of what you heard from Professor Winseck, but more from the perspective of creating content as opposed to the success within the media sector itself.
Some of the impetus for communications law reform in Canada stems from concerns that existing regulations are failing to adequately support the Canadian cultural sector and that the Internet places its future at risk. Yet the data points to a very different reality, namely that much of the sector is experiencing unprecedented growth in the Internet era without the need for a regulatory overhaul.
For example, the days of worrying whether consumers would pay for music are largely over with the Canadian music market growing much faster than the world average, streaming revenues more than doubling in 2017, the Canadian digital share of revenues at 63 per cent, exceeding the global average of 50 per cent, and Canada leaping past Australia to become the sixth-largest music market in the world.
In fact, since the 2012 copyright reforms, music collective SOCAN’s Internet streaming revenues have grown more than tenfold. Last year it reached nearly $50 million. By comparison, in 2013, Internet streaming revenues for SOCAN were just over $3 million.
This success story is particularly notable with respect to film and television production in Canada. According to the latest data from the Canadian media producers association, the total value of the Canadian film and television sector exceeded $8 billion last year, over a billion more than has been recorded in any year over the past decade. In fact, last year virtually everything increased: Canadian television production, feature film production, foreign location and service production and broadcaster in-house production.
Canadian content production hit an all-time high last year at $3.3 billion, rising by 16.1 per cent. Notably, the increased expenditures do not come from broadcasters. In fact, the private broadcasters now contribute only 11 per cent of the total financing for English-language television production. Their contribution is nearly half of what it was just three years ago in an industry that is growing. Yet despite the privacy broadcaster decline, money is pouring in from two sources. One from distributors, who see the benefits of accessing global markets. Secondly, and I think very importantly, foreign financing, which has grown by almost $200 million in the last four years. It should be noted, of course, that the sector remains heavily supported by the public, with federal and provincial tax credits now contributing almost 30 per cent of financing.
As I mentioned, the increase in foreign investment in production in Canada is staggering. When Netflix first began investing in original content in 2013, total foreign investment in Canada, including foreign location and service production, Canadian theatrical and Canadian television was $2.2 billion. That number has doubled in the last five years, now standing at nearly $4.7 billion. While much of that stems from foreign location and service production that supports thousands of jobs, foreign investment in Canadian television production has also almost doubled over the last five years. In sum, the data confirms there had never been more money invested in film and television production in Canada and, far from representing a threat, the digital environment has provided new opportunities for Canadian creators to thrive.
Finally, what is next for broadcasting and telecommunications legislation? Given the risks of treating the Internet as the broadcasting system and the success of the cultural sector, what’s next? I’d like to quickly point to five issues to consider.
First, ensure affordable access for all. As the committee works through its study, it must keep in mind that all the benefits of the Internet depend on all Canadians having affordable access. The imposition of new taxes or fees for Internet access will invariably mean that Canadians pay more for those services. With a quarter of low-income Canadians still without access, often due to affordability concerns, and Canada with some of the highest wireless prices in the world and the lack of competition that Professor Winseck highlighted, imposing new costs risks increasing and growing the digital divide in Canada.
Second, maintain a level playing field through strong net-neutrality rules. You also heard this from Professor Winseck. Existing rules have been interpreted to include net neutrality but we would still benefit from unequivocal legislative direction to support and enforce net neutrality. Some commentators have raised the possibility that Canadian cultural policy might benefit from zero rating Canadian content, that it would not count against your data plan. In other words, rather than relying on net neutrality rules to ensure Canadian content benefits from a level playing field, perhaps we should tilt the rules in favour of Canadian content by mandating that domestic content not count against monthly data caps. I believe Canadian content can compete with the best in the world and that our regulatory rules should ensure a level playing field to allow it to compete fairly with content from around the world.
Third, Canadian broadcasting and telecommunications laws should keep pace with the changing digital environment. Rules that grant the CRTC the power to decide which channels may operate in Canada should be repealed. Instead, the commission should concentrate on consumer protection and marketplace competition. The consumer protection issues should include regulations maintaining maximum consumer choice through things like pick and pay models, truth in advertising in communications services and tough action against deceptive practices, as is the subject now of a CRTC study.
Fourth, we should reject new fees or taxes on Internet access and services. An Internet, or ISP, tax is largely premised on the argument that ISPs and Internet companies owe their revenues to cultural content accessed by subscribers and they should therefore be required to contribute to the system much like broadcasters and broadcast distributors. As previously discussed, however, the Internet is about far more than videos and listening to music.
Governments can and do support Canadian content through grants, tax credits and other subsidies, but foisting support on monthly Internet or wireless bills stretches the definition of the conventional broadcast system beyond recognition.
Fifth, we should reject calls for website or content blocking. The recent proposals Professor Winseck mentioned along the lines that have been submitted to the CRTC have been disproportionate, harmful, inconsistent with international standards and they violate Canadian norms. Indeed, website blocking would bring major costs and negative implications for freedom of expression, net neutrality, affordable and competitive consumer Internet access and balanced enforcement of intellectual property rights.
I look forward to your questions.
The Chair: Thank you very much to both of you.
Senator Griffin: Thank you. I’m from a small province, Prince Edward Island. It should be easy to get inexpensive Internet in a small, relatively densely populated province, although a lot of it is rural, yet we’ve got many rural areas that are well underserved. It’s embarrassing. It’s a shame. I also find the prices in our province are relatively high. You mentioned they are high in Canada in general. They’re higher in our province than in a lot of others. I’m very much in agreement with you both of getting a more level playing field.
You’re making recommendations here on things we should or shouldn’t do. What are the two most important things we could do that would help alleviate this inconsistency that we’re finding, especially in rural Canada?
The Chair: Mr. Winseck and Mr. Geist, both of you can take turns.
Mr. Winseck: Both the CRTC and ISED have in recent years been increasing their efforts to bring about more competitive providers of mobile and Internet services across Canada. I think the pressure should be kept up. I’m not sure if the current CRTC is as committed as recent chairs have been to promoting this goal. I think the regulators have to keep their pedal on the metal and continue to steel their spine and continue to promote an increased level of service provision to provinces like Prince Edward Island.
I think the idea of separating control over access network from the provision of services over those networks is a good idea. In this case, we are talking about something called mobile virtual network operators, those that will provide a mobile service over the networks. That would help to create service level competition without having to build redundant networks at the four corners of Prince Edward Island, which is just a silly idea. Those are a starting point.
Mr. Geist: You asked for two. I’ll start first by echoing Professor Winseck on the issue of competition. Fundamentally, this is a competitive problem and we see that. It’s great that you’re highlighting the difference between provinces. The reality in Canada is that there are different prices between provinces, and we do have provinces where there is more competition and we unsurprisingly find that pricing is better. It’s true in Saskatchewan, it’s true in Quebec, and it used to be true in Manitoba, though I think that will rapidly disappear given the consolidation in the market with Bell having purchased one of the last players in there.
What you end up with is how you foster greater competition. One possibility on the wireless side is what is known as MVNOs, mobile virtual network operators. These are operators on the existing network but can distinguish themselves by finding ways to compete. They have to still make any number of different investments in customer service, in certain network aspects and the like, but sometimes they can compete in areas where some of the existing incumbents have been earning very fat profits.
The other possibility is where competition does not work, we need regulation. We need a more aggressive CRTC. I’m inclined to agree that under the current chair we haven’t seen the same kind of commitment to date, although I suppose it is still early, that we saw with the prior CRTC commissioner who tried to put consumers and competition at the centre of some of those policies. In fact, I think we saw a perfect illustration over the last couple of months, when the government required the CRTC to conduct a study on low-cost data plans and data-only plans, the idea being that many Canadians who otherwise cannot afford these services would be happy with a plan that is data only, and they would use a number of data-based services as a mechanism for their communications.
The companies came back with plans that would be laughed at in just about any country around the world and frankly ought to be laughed at here. When the CRTC made it clear it would consider taking a stronger regulatory approach, low and behold, those same companies came back with a doubling of their initial proposal. I think those proposals are still not good enough, but what it highlights is when they are faced with pressure of real regulation, they respond. In the absence of competition, it falls both to the government and to the regulator to step up and regulate, so long as we don’t have the competitive forces we need.
Senator MacDonald: Thank you, gentlemen, for your testimony here today. There are so many questions I could bring up today.
Like a lot of Canadians, I’m very frustrated with telecommunications in this country. It is outrageously expensive. Let’s face it, it’s basically a cartel. It’s a small oligarchy.
I’ve been on this committee for a while in dealing with these issues. Is the CRTC equipped to challenge this stuff? In my time here, over the past 20 years, they seem to be as much a part of the problem as they are of the solution. I’m not convinced the CRTC has the fortitude to take on these cartels. The consumers are losing because of it.
What’s the solution besides going through the CRTC? Is it relevant anymore in terms of serving the public interest? I’m increasingly convinced it’s not serving the public interest.
Mr. Geist: I think you’re expressing the frustration that a lot of Canadians are expressing right now. I do think we have seen instances where the CRTC has made some effort to try to inject a greater level of competition into the marketplace and at a minimum try to put some of the incumbents on their heels a little bit. Some of the big steps that might be needed to shake up the industry has always been a bit too far from the CRTC’s reach or at least its willingness to move forward in that direction.
I think you can get into a reasonable discussion as to whether it falls to the CRTC or the government to do this. The MVNO is a good example. They rejected the prospect of the MVNO, so rejected that form of competition in a far more aggressive position than was necessary. They basically said no, they would reconsider it in 2020 and beyond, which puts us many years before the possibility of that.
The government came back and said they would like you to reconsider the decision. The CRTC’s response, after they considered it, was, “No, we’re happy with what we decided.” That was a pretty explicit rejection of the signal the government was sending. But in fairness, I think you can make a reasonable argument to say, at the end of the day, if you’re going to shake up the marketplace with some significant reforms, then it falls to the government to seize and take this.
We have had successive governments, whether Conservative or Liberal, over the last 10 to 15 years, and it has not taken long for them to come to the recognition and realization that this is a major issue. Our competitiveness is, in many respects, at stake, the amount we spend on communications dollars is one of the biggest aspects of many Canadians monthly spend. They talk about the necessity of change, but to date, other than playing around at the edges and perhaps allowing for a greater level of transparency, they haven’t been willing to do the deeper dive that I think would raise the objections of the incumbents but longer term for the benefits of all Canadians.
Mr. Winseck: I think the CRTC has been captured by ideas and by industry. By ideas, I mean that systems metaphor.
This idea that somehow there’s a system that somebody has to oversee and keep it all locked together so it basically becomes a preservation project, a systems integration building project. It’s that systems metaphor on both sides, the Broadcasting Act and the Telecommunications Act and the idea that they have to then be brought together at an even higher level of systems integrity that really kind of puts the CRTC in this odd position of a kind of managerial or systems administrator perspective, as opposed to what it needs to be, which is a watchdog — a tough regulator with a spine that has the fortitude to stand its ground knowing that it’s got the backing of the government of the day whilst maintaining its independence to regulate when it needs to.
I agree with Professor Geist that we have seen moments — the term of a chairperson, and when the CRTC has found its footing and pushed pretty far but always stepped back from the precipice, but even that pushing pretty far has been really good. We have had the reimposition of wholesale network regulation on the mobile wireless side. We have had the idea of unbundling the provision of television programming from control over the distribution network. We have had that line drawn in the sand about not using your control over the network to control the flow of communications and culture that Canadians are getting. That’s the Internet traffic management policy, basically the network neutrality ruling, so the ITMP, the mobile TV decision, the zero rating. The wholesale access framework and the strong locking down of network neutrality, these show what a regulator can do with some spine. I was gladdened to see the Competition Bureau actually swinging in behind the CRTC basically since about 2013-14 up until the present. I think that’s been very welcome.
I think we have a problem, it appears to me — but it is still too early to tell — in that we see the CRTC right now reverting back to mean, back to norm, the systems administration perspective. I know long-standing members of the CRTC staff, and they’ve been there for 20, 30 years. They are deeply inculcated with these ideas and are quite happy to assume that managerialist role, and it’s not a helpful one. Once you’ve put a chair in position who takes on the mandate of systems administration too, that comes from deep industry background; we are trying to push a boulder up a steep hill.
Senator MacDonald: I would like your opinion on something. It’s the control of information in the hands of a few corporations. Facebook and Google are huge, influential companies. Back in the early years of the twentieth century, Teddy Roosevelt took on the giant trusts and broke them up. They had to be broken up because they were dominating the entire country. Are we at the point where the government is going to have to break up Facebook and Google and do something to diversify the flow of information? They seem to be getting very omnipresent and very dominant. As two people who work in this field, I’m curious about your professional opinions on this type of thing.
Mr. Winseck: Since we’re playing back and forth here, I think those are legitimate questions to put on the table. I would say this idea of breaking things up, structural separation, we need it with respect to control over networks and content. I’ve called for structural separation in the telecommunications and cultural industries. What we have here are some common ideas that are portable across positions. We can transpose similar ideas or at least think about transposing such ideas on a Google or a Facebook.
There is talk in the United States, and I’m not sure how far to go with this right now, but I think the questions must be on the table and they must be considered seriously. Facebook was given a free pass when it acquired Messenger, WhatsApp and Facebook. Maybe that was a mistake. In the United States they broke up AT&T and separated long-distance and international from local. That was the biggest player in the United States and had been for a long time with deep military contacts. If they can break up AT&T, the question can be on the table with respect to a Facebook or a Google.
I would, however, say a couple of other things. Let’s be very careful and not allow ourselves to be distracted by a bunch of hand waving and the sky-is-falling people talking calamity of the Canadian cultural industries at the hand of the vampire squids from south of the border, and this vilification of demons that rests upon a total misconstruction of their place within the Canadian media economy. As I mentioned, they now dominate three quarters of Internet advertising, 40 per cent of all advertising. But advertising only makes up one fifth of the Canadian media economy. The last time I counted they ranked the fifth and ninth-largest companies in Canada. They are not the Goliaths in this landscape that many would make them out to be. There’s a productive discussion going on in this country right now with some leading scholars like Fenwick McKelvey and Elizabeth Dubois who are talking about algorithmic transparency and applying similar rules during electoral periods that apply to the mass media with respect to disclosure of advertising: who advertises, from where, during what period and what amounts. I can see those ideas being transposed into the Canadian situation.
I can also see the idea of, as I called for at the end of my presentation, the GDPR type of rules that would be transposed on all players. When you think about it, the telecommunications companies in this country have far more control over data, and they harvest subscriber data and people’s use of the network well more than a Facebook or Google, and they are able to marry that with consumer financial reporting that they get when you line up for subscriptions. As I say in my notes to you, they now integrate their knowledge of subscribers and audiences across the Internet access, mobile and television services that they provide. They know what devices you are using, from where, what apps you are using, what television programs you are watching, for how long, when, on what device, what web pages you are browsing, staying, and visiting, for how long. They’re able to integrate this with all of the subscriber information that you disclose when you sign up for service and the credit information. They were called on this during the Office of the Privacy Commissioner’s investigation of Bell’s relevant ad programming, which was merely an index for a broader process that is underway within the industry. The OPC said this was unacceptable. At a bare minimum, the consent to be enrolled in this relevant ad program was far from adequate. The scope of the data harvesting was extreme, and most Canadians, properly informed, would be alarmed by the scale.
The problem is that this has now gone subterranean, so to speak, and is set within a working group at the CRTC that is taking the basic framework and establishing industry-wide practices that would then make the information about subscribers and audiences available, not just to the vertically integrated gi ants, but would also make a common poll of harvested personal data available to all telecommunications television services providers, including the independent broadcasters.
To level the playing field on a common pool of data accumulated from Canadians I think is hardly the way we want to promote competition.
Mr. Geist: Quickly, two points. I’ll pick up from what Professor Winseck just said. It’s Rogers that knows where I am, not Google or Facebook. It’s on my phone right now. It’s Rogers and Bell and Telus that disclosed personal information of millions of Canadians upon request without court oversight until the Spencer decision from the Supreme Court several years ago. Quite frankly, given that it is a necessity to connect to the Internet but not a necessity to use Facebook, the power leveraged by the telecommunications companies, especially when it comes to personal information, is very, very powerful.
With respect to the large Internet players, the Googles and the Facebooks, I think we’re at the point where people say, “do something.” I’m not sure what breaking those companies up would mean. I don’t think it’s advisable. What we actually see taking place a lot now is the opposite. We start seeing efforts to put more and more responsibility on those companies. For example, we saw over the last couple weeks in Europe a copyright directive take another step toward passage that would mandate large platforms such as Google and Facebook to implement upload filters, filtering to try to identify alleged copyright infringement before it appears on the Internet.
There’s a series of problems with that. The systems aren’t good enough to do that. It means there will be all kinds of legitimate content that’s blocked along the way that doesn’t make it online. But even more as we try to say to the Googles and Facebooks, “You broke it, you bought it, so fix it and come up with a solution,” what we’re doing is making sure the Internet will be dominated by just those players. The costs of being able to manage content moderation or these sorts of filtering type solutions can only be borne by large giants. It means the prospect of new competitors from Canada or elsewhere will often not be able to emerge because the costs of admission are so high given the kinds of demands that we try to place on these intermediaries.
There must surely be a middle ground where we can address some of the ongoing concerns about the power or the misuse of the network without saying, “break them up” or essentially create regulators out of these companies by mandating that they do the job of what we previously would have thought courts and regulators ought to do.
Those are things like better transparency, whether it’s algorithmic transparency, or the electoral transparency so we better understand what is taking place and can take action where there may be violations, whether competitive or otherwise.
It means stronger privacy and data protection rules so we are the ones, as individuals, who ultimately control how our information is used and have greater power and leverage to say there are certain uses by those companies or other companies that we simply do not accept and have the ability to stop from taking place.
We haven’t got to the point, I think, where the kinds of rules that empower individuals are commensurate with the kind of power with those larger players. I think that would be the place to start, as opposed to the “you fix it,” which engenders a whole series of its own problems.
The Chair: Is it a question of society’s maturity about these? Google is relatively new. We used to worry about the dominance of the media companies. Now all of a sudden in the United States there’s ABC, there’s NBC, there’s CBS, there’s Fox, there’s cable. Here we have Global, CBC, CTV and all the other cable channels. It just took time for all of that to happen.
There’s got to be a lesson in there for us when we look at the Internet companies. I mean, part of the problem with Google is when you seek information you don’t know why you get that piece of information you get. You don’t know that someone is actually advertising to have that piece of information appear first. I think that’s what happens. Then there are other pieces of information that come about.
Maybe there should be a way to identify how you’re receiving the information that you’re getting. It should be identified if someone is paying for that information to appear higher on the Google information system than somebody else, because that’s what defines what I think.
We may just not be allowing enough time to take place for new players to be in the market that would fight Google. I think new players could get into the market. There are players in the market. You can go to Bing and other ways to get information and they may just get too big and fall apart like other big players do.
Mr. Geist: I’d respond with two things. First, what you’re suggesting on the advertising side does exist when Google moved towards an ad-based model. Google started out of a garage or a lab in Stanford, and initially really didn’t have a business model to speak of. It was a better search engine than we had otherwise in the late 1990s. The algorithms it used to identify what was relevant content was better than anybody else. The insight was that people who linked to other content were, in a sense, sending a message through the link that was likely to be more relevant content. They used that to create a ranking system to identify more relevant content.
After several years, you started to see the industry in search of a way of making some money and advertising became the preferred solution. At the time, U.S. regulators stepped in quite quickly to ensure that where there are paid search results that are sponsored, those would need to be appropriately identified as such. When you go on Google, and this has been the case now for well over a decade, or any other search engine, where there are paid search results, they are identified as such. They are described as sponsored and set aside, so there is that level of transparency. The actual organic search results, the results that are the most relevant that have not been paid for, is everything else after that first couple, usually.
The Chair: Who decides that?
Mr. Geist: What appears first is there usually will be a few search results that are identified as paid for. They are, in a sense, set aside and identified as advertisements. Below that are all the relevant search results and those relevant search results are based on any number of factors. That’s Google’s secret sauce. They identify what they believe to be the most relevant search results based on where you are located and any number of other different factors.
I’d argue, given how successful they’ve been, they do a pretty good job of identifying that. There is a reason that when you suggest people can use Bing most people will smirk. The reality is most of us don’t use Bing, most of us do use Google and there’s a good reason for that. It’s not because they’re big; they’re big because they’re good. We’ve gravitated to and use Google because it has been very effective in doing what it’s doing.
You also raised the question of have we, in a sense, not paid enough attention to this issue. At a certain level perhaps that’s true. Google for a long time was the do-no-evil company. Facebook was the place where everybody was gathering. I think it’s pretty clear a lot of people underestimated the risks inherent with that system — with Facebook and elections and some of the power that comes with being such a large player.
We shouldn’t lose sight of the huge amount of innovation that has and continues to take place in all kinds of different sectors. They’re big players, to be sure, and Professor Winseck did a nice job of highlighting that in Canada, relatively speaking, they’re still not that big compared to some of the other big players.
Even within the Internet space, we just had new iPhones introduced last week. It’s been 11 years since the original iPhone. My childrens’ preferred method of communication, which is Snapchat, didn’t exist. That’s true for millions of people who are using a different communication system than either Facebook or Google. Netflix, as a streaming service didn’t exist; Uber as a transport or sharing service didn’t exist. Shopify, Canada’s great Internet e-commerce success story may have existed but wasn’t anything like it is today.
The notion that it’s only been Google and Facebook that have grown and everyone else has been left in the dust is an inaccurate view.
The truth is, we rely on a whole series of different services, many of which become part of our daily existence so quickly that we scarcely notice. Yet they didn’t exist that long ago and, in fact, they are often times in competition with companies like Google and Facebook. I think that in many sectors, there is still robust competition with a lot of innovation taking place.
Senator Dawson: Chair, the second part of this meeting is to prioritize. I think we have 10 new items that have been put on the table with two great presentations. If you remember what we said in June, we want this study out before the next election. If we were to prioritize, if we want to tell the government before and we want to put it on the agenda with the next election debate, what are the priorities as far as the Broadcasting Act and the Telecommunications Act that the Canadian Senate can recommend to the government? Obviously, we’ve heard the criticism about the CRTC, and I think it’s totally justified. The CRTC has not evolved in this new environment. They took the decision 20 years ago not to get involved in the Internet and we know the consequences of that.
I also want to make a distinction. If anyone listened to French television this weekend on Prix Gémeaux, Quebecers produce 90 per cent of what they consume, which is exactly the opposite of the rest of the country. We have these uniform rules, whether it’s the CRTC, the Broadcasting Act or the Telecommunications Act that give the impression we have a uniform Canada. Prince Edward Island has a different problem. We have these big organizations that are supposed to have a one-size-fits-all model.
We want to put out a report before the next election. What would you prioritize? You’ve put seven or eight new items on the table for us. Thank you very much. I’m not asking you to do our job, but if you could, prioritize what this committee should be reporting to the government as being the top priorities that they should act upon quickly so that this issue is debated.
Senator MacDonald is not here, but if the issue of splitting up these companies is one that should be pursued, let’s do it. We need a bit of guidance. The last time we did a report was on the CBC and we didn’t even get to publish it because the election was called and it was never adopted by the Senate. I don’t want that to happen to this study.
What would you ask us to focus on if we were to put out a report as soon as we can?
Mr. Winseck: Don’t think about a convergence act. Don’t waste your time thinking about that. Anybody who tells you to transfer most of the CRTC’s authority to the Competition Bureau, I would reject that because I think the CRTC has the capacity to think about these things in terms that bring communication, culture and democracy together. The Competition Bureau is very narrowly focused. We don’t need to reconstruct the housing. That will save us a lot of time. No convergence act. That’s number one.
Number two is a strong endorsement of net neutrality. Let’s not pretend that we’re reinventing the wheel. We already have a 130-year history in this country that has locked down and clarified the principles behind common carriage and applied them across the land. We have two very valuable sections in the Telecommunications Act, sections 27 and 36. Bring them out, make them the crown jewels of a carrier act.
Third, take those GDPR-type values, regulations and responsibilities and transpose them equally across the telecommunications, audiovisual media and Internet platforms with respect to limits on data harvesting, transparency with respect to how data is collected so that we can know about how search engines are generated, how YouTube videos are generated and brought along so we can know about the RRAP stuff, the relevant ads programming. We have to get better control over our data.
Elizabeth Denham used to be the Assistant Chair of the Office of the Privacy Commissioner and is now the head of the Information Commissioner’s Office in the U.K. She told Facebook in 2009 to lock down third-party access to your access information protocol interface because you are giving unknown parties unfettered access to a treasure trove of data and this is not going to end well. Facebook cocked a snook and walked away. There is some supreme justice or karma in the world a decade later for the same woman, now situated in London and not Ottawa, to be able to use her insights accumulated over the decade to bring Facebook and Cambridge Analytica, who exploited this, to heal. She is a powerful woman now, with lots of insights. We can and must do that here in Canada. That brings the telecom providers and Internet platform providers to heel.
Next, in terms of cultural and audiovisual media services, because culture is important, we need to do two or three things. First, the common carriage net neutrality regime gives them access to all distribution networks on a level playing field or equal terms, removes the gatekeepers and gets them out of the way of their access for audiences. This is really important. When we look at small independent broadcasting companies across Canada, like ZoomerMedia,OUTtv, Aboriginal Peoples Television Network, they have been screaming bloody murder for their entire existence about having to prostate themselves before the great gatekeepers of the network media ecology. Network neutrality and the elimination of the broadcasting system idea in which everything has to work together as an integrated whole will give them the runway they need to get access to audiences and thrive and bring important culturally diverse viewpoints to people in this country.
We also need to recognize that culture is not just about commodities and marketplaces, that Canadians and all citizens around the world have never paid the full freight for a general news service. It has always been subsidized either by public funding, by advertising or by wealthy patrons. We have to pick. In a democratic society, I think we ought to give very strong public support to both a strong public service media provider that works across all platforms — that’s the CBC — but we also need to think creatively about how we can provide support for independent journalism. Those would be my suggestions.
Mr. Geist: Let me offer you two substantive —
Senator Dawson: You just add on.
Mr. Geist: I’ll build on what I’ve said already; two substantive and two processes.
From a substantive perspective, number one, it’s striking that Senator Griffin started with pricing and access issues. For a lot of Canadians, that is the fundamental question when they start thinking around telecommunications. The question for this committee to try and answer is: How do we create more competition? Not just from a carriage perspective, not just in terms of how can we ensure affordable access, whether it’s broadband or wireless, but also competition on the cultural side. The way you ensure greater competition on the cultural side, I would argue, is net neutrality. It is ensuring that level playing field so that from the largest U.S.-based service to the smallest Canadian service that wants to find a way to ensure it can find an audience both here and around the world, it’s treated on an equal playing field. It’s net neutrality that tries to do that.
The second principled substantive position for this committee is to bear in mind the Internet is not an ATM. The idea that somehow the solution for the cultural sector and various other issues is to take out the perceived profits that live in the Internet and transfer it over to other sectors through subsidies is the wrong model to take. It may have been in a model we saw on the broadcast side years ago but it’s not the right model on the Internet side. It will exacerbate the problem on affordability on the other side because it is ultimately customers who pay the price.
From a process perspective, two points. First, I mentioned off the bat that, of course, there is another study that is taking place through the broadcast telecom review panel. From a process perspective, ensure both of these works get attention. There needs to be some attention paid to how you develop some kind of synergies so that people are paying attention, and that one does not subsume the other or get lost in the process. Otherwise we run the risk of having two reports and nothing happens because nobody is paying attention to either or they don’t know where to look. I think some thought needs to be given to that.
We developed our presentations completely independently. We didn’t talk at all. Both Professor Winseck and I came armed with data telling you here’s what is really taking place in the cultural sector, and here is what is really taking place in the media sector. If I had a particular piece of advice for this committee as it conducts its study, deal with fact and not fiction. There are fictions that we tell ourselves in Canada, or that certain groups like to tell themselves: Canadian culture is under threat, that they are not seeing growth in the sector and that we need old-style regulation to save us. The data simply does not bear that out. If we’re going to have a study that lasts and has a real-world impact, we’ve got to get past some of that kind of rhetoric, into the real data towards policy solutions that reflect what is taking place, not what some people would like people to think is taking place.
The Chair: We’ve got about 17 minutes. As usual, we have really interesting guests. We have three more on the list and I’d like to get them through before 11 o’clock. Snappy questions and answers, please.
[Translation]
Senator Cormier: I will try to be brief in discussing such a complex issue. The image I have is of a million wires that are all tangled up together, and when you try to unravel them, you find others in there. So this is a very complex issue we want to tackle in the context of this law review.
What concerns me regarding the cultural sector is that Canadian producers, authors and artists should be able to distribute their works and have them be known through the Internet.
The European Union is working on a bill on neutrality and copyright. I’m wondering whether, to your knowledge, this could help us in our thinking on the revision of these three acts.
My next question is this: what should the role of the industry be in this process of reviewing the three acts? In your opinion, how should we encourage the industry to participate in the review process, given that the figures show that there is an increase in revenues? We’re talking about the big producers, but there are a lot of small producers everywhere in Canada who are trying to have greater access to the possibilities. How can we get these people involved in the current process?
I agree with Senator Dawson; we have to make this study a priority.
[English]
Mr. Geist: Thanks for those questions. With respect to what we see taking place in the EU and the passage, or at least a step towards a directive, I think it’s instructive for Canada about what not to do as opposed to what to do.
The heart of that discussion focused on two things. One, a so-called link tax, the notion or attempt to try to get people, especially large companies like Google, who may create links to news organizations to pay a licence for that. That’s been tried in a couple of jurisdictions and it’s been unsuccessful. The reality is, faced with the prospect of paying or not, in many instances people will simply walk away. There is so much choice in terms of news sources that the idea of trying to impose those fees has a negative effect. One of the things it ultimately does is hurt the players we want to try to help because they aren’t getting the type of traffic they once thought they would and some of their business model depends on advertising revenue. It runs the risk of some of the disinformation we see as people turn to other sources. Sometimes we see the disinformation sources begin to gain in prominence. I think there are real risks there.
The upload filter side, this notion of trying to stop infringing activity before it comes forward, is exceptionally difficult. Anyone who has studied this from a technical perspective will tell us that the ability to identify infringing versus non-infringing content, when dealing with parody and satire, fair dealing and the range of creativity that often new creators are building upon others simply doesn’t work well when trying to automate all of this. The risks are both to freedom of expression, where you find the ability for people to express themselves may be limited because we’ve granted that gate keeper status to large players, and it locks in those large players as dominant. There are real risks to what the EU has done.
In terms of how we ensure Canadian content gets created has been answered by the experience over the last number of years. It is being created in record amounts. We see a huge amount of investment in this sector. It gets created because Canadians are good at creating content that people want to see. That’s why Netflix has Canada as one of the top three places it invests in the world because we create really great stuff. You succeed by being competitive, not by having the toughest regulations.
That said, there are unquestionably discoverability challenges that exist. The CRTC did a report and a study on some of these issues. I have to say, it was quite striking. I participated in a couple of sideline events as part of that. You had certain groups, largely in Ontario and Quebec, that focused on how they can get more subsidies and revenues coming in directly from Internet providers. As I’ve argued, I think that’s not the way to go.
The discussion that came out of the West from many of the creators in Alberta and British Columbia wasn’t focused on those kinds of programs at all. They were focused on how they get discovered; basically exactly your question. I’m creating stuff, I don’t need the government to help me create stuff, I need to ensure that my stuff can get found on a global basis. That’s where I think we can be thinking about how we ensure that Canadian content gets found.
Part is that net neutrality piece. We keep coming back to it because one of the ways you ensure you get found is that companies that might otherwise have incentives to prioritize their own creative content, that they’ve either paid for or licensed, aren’t able to do so because they have to treat everything on a level playing field. That’s a discussion we need to continue to have to ensure creators have the tools and knowledge on how they get out there and get found, and ensure that there’s enough transparency to ensure they’re being treated fairly.
Mr. Winseck: This is part of my presentation and we heard some similar things from Michael. We have some problems in a few areas. This was my point. There is a problem when it comes to advertising-supported broadcasting television, radio and journalism. I think that’s something that’s real. I think we need to figure out ways to deal with it. I’m not afraid to shy away from the idea of subsidies. What I’m trying to do is say let’s keep this thing in proper proportions. Let’s realize we have a problem, and it is a significant problem, but its dimensions are not those of an elephant in the room around which we now have to harness the entirety of the world to rescuing a puppy. That’s where we are at in these kinds of discussions too often, as groups come in with more rhetoric than reality, very little data, and they want to harness the entirety of the Internet to the salvation of good things.
What we need is a properly scoped definition of the problem, and we need scalpels, not sledgehammers. This is consistent with what we know more broadly through the history of culture and the arts. Arts and culture do not pay all the time. There are always masterpieces and blockbusters amidst a sea of struggling artists. A decent society decides how they’re going to take care of both. That’s where we need to be. We need not and should not forget the realities of art and culture that we know from history just because we have the Internet. The Internet is not going to make this problem go away. Instead of trying to harness this massive infrastructure of the modern economy, society and everyday life to this new problem, let’s focus on some narrowly targeted subsidies.
The last thing I’ll say is when you have large amounts of foreign funds going into film and television production in places like Toronto and Vancouver, they are equipping Canadians with skills that allow them to then go on and do their own productions.
[Translation]
Senator Gagné: Thank you for your excellent presentations. These discussions are fruitful and they will surely help guide us in our study.
You both said that the Telecommunications Act and the Broadcasting Act should be kept separate. Why do the cultural groups want to see them amalgamated? What is behind their wish?
[English]
Mr. Winseck: I think it’s this idea they wish to harness the entire world to their cause. I’d love to have the entire world harnessed behind my causes too. That’s not reality.
Mr. Geist: I’ll drill down deeper on your question. I’ll try to, anyway.
I would say that we ought to start by recognizing that the purposes behind the Broadcasting Act and the Telecommunications Act are different. They are different statutes. Telecommunications is essentially a competition carriage-related issue. We know that when you build large networks that often leads to dominance by a small handful of players. You need telecommunications law to ensure there’s no abuse of that. Dwayne did a great job of highlighting some of the provisions we have around undue preferences or influencing the content or meaning of messages are mechanisms to ensure those large players don’t abuse their positions.
Broadcasting is far more, especially at a time when broadcasting was about a scarce resource, about how you apportion that resource and how you achieve certain cultural objectives. The idea of combining those two creates a challenge because in many ways they’re ill fitting. The purposes behind the two are different.
What’s happened, of course, is everything is shifting towards the Internet. The Internet is essentially the pipe for all. If all of these communications are taking place through the Internet, shouldn’t we have one law that reflects all of these activities? Your question was: Why do cultural groups focus on this issue? I would argue because they hold out the possibility that in the move to converge these two acts with these two differing purposes, that one set of purposes will swallow the other.
If the approach is that the purposes behind broadcasting swallows telecommunication, then we will turn telecommunications into a cultural policy statute. I think that’s mistaken. My phone is not cultural policy in the sense of how I connect to the network in some of the kinds of issues that we’ve talked about. Indeed, if we were to combine the two, I would argue, especially with the emphasis we’ve heard on competition, it’s telecoms that subsumes broadcast. If that’s what happens, I would say to some of those groups be careful what you wish for because some of the safeguards and provisions you have liked in the Broadcasting Act may well be lost if we move towards a single Telecommunications Act premised largely on telecommunications-style policy that suggests the way to solve even some of the cultural concerns stem from competition-related and consumer-type safeguards.
I think that’s what’s happening underneath the surface. I think it’s also why we need to be a bit reluctant to say, “Let’s just slap them together because that’s what’s happening at a technical level.” The policies are still rather different.
Senator Galvez: I have a final question. This has been very interesting. In some ways, we now have a clearer idea of what’s happening. Unfortunately in other subjects I think we are more confused.
You talked about the European legislation and you also know the Americans are trying to do some legislation. Can you tell us if you have preferences or strong points in regard to the legislation that we should imitate and emulate and things we should not try to duplicate here?
Mr. Geist: Sure. I’ll start with a couple things. I think that we’re facing a lot of pressure from the United States right now, obviously, through the NAFTA renegotiations on a number of different issues. Many of the things that they have been pressuring us on is to move away from what were well-considered and well-studied Canadian policies that better reflected our national interests. Some of the intellectual property provisions that we have on copyright, the existing term we have that meets international standards, the notice rules that we have that was the subject of a Supreme Court of Canada decision on Friday, those are the kinds of things where the U.S. would like to see us adopt their approach.
Canadian negotiators have long taken the position that doesn’t reflect a national interest. I think they are right in that regard. I hope they continue to take that position.
There is one U.S. provision that would be helpful and would help from a freedom of expression perspective, and that has to do with a safe harbour for intermediaries. There is a question people sometimes ask: Why doesn’t Canada have a Facebook or some of these large platforms? How come they couldn’t be established here? I think a good part of the reason is that the United States, many years ago, established a legislative safe harbour for the content that gets posted by third parties, not the original content. For the original content, you’re clearly responsible. But for content other people post, they’ve created immunity from liability for that third party content. It does not mean, if you get a court order, that you don’t remove the content. You clearly do. But it does mean that you’re not held to be as if you’re the publisher of what someone else had to say. You’re merely the forum.
We haven’t had that in Canada. For large players, they look at the Canadian market and say there is heightened legal risk in operating in Canada without those protections. Canada hasn’t been a place favoured to do that.
The U.S. wants to ensure its companies have the same kinds of protections in Canada. That’s actually one example where we benefit from adopting those provisions.
The Chair: This was terrific. Thanks very much to both of you for coming. At least it stimulated a heck of a lot of conversation. I don’t know if we’re further ahead, but we’re going to try to move further ahead.
Thanks so much to the witnesses. We’re going to be moving in camera to have some discussion on future business.
(The committee continued in camera.)