J-Source publisher and co-author of upcoming book ‘The End of the CBC’ breaks down the regulatory recommendations that have industry watchdogs in a tailspin

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The original rationale for government regulation of broadcasting was simple: the airwaves belong to the public and space is limited. 

So government needs to enforce how that space is shared, who shares it and what responsibilities come with private interests having access and being able to make money using this public resource.

That worked for a long time, even when the Broadcast Act was last overhauled in 1991, but the arrival of the internet created chaos for regulators. 

Anyone can now be a broadcaster. The technology to do it is cheap and easily available with almost no capital or physical investment and the limited space on the airwaves has been replaced by unlimited online real estate, giving both producers and consumers instant access to global media. New entities have emerged to supplant the traditional radio, television and print media.

The way to address that chaos, suggested by the Broadcast and Telecommunications Legislative Review panel commissioned to overhaul the Broadcast Act for the 21st century, is equally simple: everyone should be regulated. That includes news organizations that produce online content, it said in its report tabled Jan. 29.

Why? Here’s the panel’s rationale:

“While Canadians continue to rely on Canadian news media, they are increasingly accessing content online, including through social media platforms. Advertising revenues are moving away from traditional outlets, such as print newspapers, conventional television and radio stations, towards online media aggregation and sharing services, given the superior ability of these services to attract customers.”

In other words, regulation is required because innovators have been too successful at attracting audiences and advertising from traditional media.

That’s the problem with the whole panel report. It views the world through the eyes of producers of content for traditional media at the expense of consumers in a world where new forms of media dominate the landscape. The panel proposes a world where producers will be sheltered to produce – but who will consume? It seems oblivious to the reality that audiences — not producers of content — now call the shots and they have less and less interest in the world of regulated media.

As the report itself notes, in 2014, 79.8 per cent of households subscribed to cable television. That had fallen to 72.5 per cent by 2018. It would be dramatically higher for those under 35 as the report says 80 per cent of those in the 18-34 age group subscribe to a video streaming service and more than 50 per cent of that age group also subscribe to a music streaming service. 

For the record, here is what the Broadcast and Telecommunications Legislative Review panel recommended about the news media:

  • It called for a new model that “would bring all those providing media content services to Canadians . . .  within the scope of the Broadcasting Act and under the jurisdiction of the CRTC.” Additionally “any media content undertaking with significant Canadian revenues delivering media content by means of the internet would be required to register” with the Canadian Radio-television and Telecommunications Commission.
  • “The CRTC must be able to monitor and address issues concerning news content made available by means of telecommunications, regardless of format. This would include online versions of newspapers.”
  • “The  CRTC should continue to have the flexibility to define what constitutes news content over time, as lines blur between what is thought of as news and information.”
  • Noting the imbalance in bargaining power between powerful social media companies and news media organizations, “news content creators are unable to individually negotiate terms over the use of their content by social media platforms. The CRTC should also have the jurisdiction to determine or approve terms of trade when it considers that it is necessary to address an imbalance of power in news content.” This could include compensation and making social media audience data available to the news media.
  • The five-year labour wage subsidy announced in last year’s federal budget for newspapers should be extended indefinitely and “should apply to news delivered over all platforms and in all formats.”
  • “A new independent arm’s length program could be established to support the production of news including local news, on all platforms. It would be open to all media curation undertakings whose primary purpose is to provide a service for the dissemination of alphanumeric news content over which it exercises editorial controls, providing they respect the principles of ethical journalism and editorial independence.” It would be funded by various levies charged to existing broadcasters and social media companies.
  • The CRTC will require these companies to include “links to websites of Canadian sources of accurate, trusted and reliable sources of news with a view to ensuring a diversity of voices; and prominence rules to ensure visibility and access to such news sources.”
  • On the HST/GST, “Consistent with actions taken by some provinces and many other countries, we recommend that sales tax be applied equitably to media communications services provided by foreign online providers. This would eliminate the disadvantage to competing Canadian providers.” 

The panel also made recommendations about the CBC, including removing references to radio and television in its mandate to allow CBC/Radio-Canada “to provide a wide range of media content that informs, enlightens and entertains on multiple platforms and media,” all of which would fall under the CRTC’s oversight.

Additionally it wants governments to provide the CBC with five-year funding commitments. (In December the Liberal government extended indefinitely the $125 million annually the Trudeau government gave the CBC for five years in 2016.)

The report also called for an elimination of advertising on CBC/Radio-Canada over five years, starting with news. That would be welcome but as a recommendation it is of little value without any suggestion to how to achieve it. 

The CBC proposed ending television and online advertising in its submission to the federal government’s cultural policy review committee in November 2016, asking for $318 million in extra funding to implement it. The Liberal government ignored the request.

The panel report justifies its regulatory expansion into online news by the repeated reference to the need for “accurate, reliable and trusted” sources of news content. The phrase appears 18 times in the 120-page report. 

The term is never defined nor is there any explanation how — in a world most consumers see as flooded with free news (to the point where only nine per cent of Canadians express a willingness to pay for news online) — access to “accurate, trusted and reliable” sources of news is somehow threatened.

Some, and perhaps all, of the report’s recommendations dealing with news may be dead within days of arrival, thanks to an amateurish first response to the report from the new federal Heritage Minister Stephen Guibeault. He initially seemed comfortable with regulating everyone, only to recant as Prime Minister Justin Trudeau subsequently stated the government did not plan to license news outlets or regulate news content.

So what does it plan to do as we approach the 30th anniversary of the legislation that still governs broadcasting in the country?

On the news and information front, perhaps it should start with greater consideration of consumers and finding out what they think they are missing currently and what, if anything, they believe they need or want but may not be finding despite the access provided by the internet. Then consider how to achieve it. As it relates to global social media, the answer is likely multinational action such as some steps under discussion by the OECD, whether that is revising copyright rules or taxing revenue in the country where it was earned —all expected to be resisted strongly by the United States.

Regulators can become captives of the industry members they are regulating: witness the Boeing 737 MAX and the Federal Aviation Administration in the United States. But it’s hard to make that argument in this case. There are few common interests among the legacy and new media the panel proposes to regulate, so it’s tough to make an argument the panel has been captured by the industry.

In the end, it is difficult to avoid the conclusion that the prime beneficiaries of the panel’s report are the regulators themselves, struggling to avoid extinction by the internet.

Professor, School of Journalism and Communication, Carleton University, Publisher J-Source