By Ahmad Hathout
The CRTC on Monday approved an application by Google to be exempted from the Online News Act for a period of five years in exchange for releasing the $100 million it allocated to host Canadian news content.
The decision triggers a 60-day timer for Google to release the money to the Canadian Journalism Collective (CJC), the news rep that Google agreed to work with on the distribution in June.
Google held an open call, as it’s required under the new law, between February 28 and April 30 to field prospective eligible news businesses that want a piece of the $100 million, to be renewed and adjusted with inflation every year of the term. The process resulted in Google reaching an agreement with the CJC on June 6, to the concern of the Canadian Association of Broadcasters.
In the decision Monday, the CRTC added a condition on Google: to work with the CJC to add news businesses that didn’t respond to that open call going forward.
“Although adding other news businesses to the collective could dilute the funding available to the original members, the record supports allowing news businesses to join the collective in the future, as it would be responsive to changes in the news landscape,” the CRTC said.
“Having the CJC report on the number of news businesses admitted and its effect on the distribution of funds would allow the Commission to monitor that impact and take further action if required,” the CRTC added. This was a position most, including the CJC, agreed was doable and appropriate.
The CRTC also affirmed the two per cent ceiling on administrative expenses to be taken out of the $100 million.
“Given that 2% is a maximum amount and could be lower if the CJC’s actual expenses are lower, the Commission considers the 2% limit to be reasonable, provided the funds are used only for activities related to the distribution of funding to member news businesses and outlets,” the commission said.
“While prohibiting compensation for the CJC board members would preserve a greater portion of funding for distribution to members, it may make it more difficult for representatives from smaller news businesses to participate, as those businesses have fewer resources to pay for time spent away from their core functions,” the decision added. “Accordingly, the Commission takes no position on whether the CJC should or should not compensate its directors.”
On the governance of the CJC, the CRTC said it doesn’t think it’s necessary to “provide specific guidance on the governance structure … or its plans for the administration of the funds,” but will require annual reporting from the CJC to “ensure that funds are distributed as required…”
On the indemnity or insurance clause that allows Google to claw some amount back in the event of a breach, the CRTC capped it at no more than the two per cent allocated to administrative expenses.
“An uncapped indemnity under which Google could claim, and set off, monetary contributions destined for news businesses would not be consistent with this statutory scheme,” the commission said. “It could have severe negative impacts on news businesses and the news outlets they operate and, as a result, on the entire Canadian news marketplace.”
On public interest participation, the CRTC said it will not be directing any of the $100 million to go toward a fund to bankroll that expense, about which a news coalition warned would eat away at much-needed money.
However, the commission said Monday it is still reviewing an application filed by the Broadcasting Participation Fund (BPF), which funds such participation before the commission, to expand its mandate to include proceedings related to the Online News Act.
The regulator found that Google met the other criteria for exemption, including that it will ensure the compensation would go to support local, regional and national news content; it will ensure journalistic independence is protected; and that the money will be distributed equitably.
