By Ahmad Hathout
OTTAWA – The CRTC is being asked to raise the financial threshold for registering online services with the commission and ensure transactional video services are made to contribute to the system when it implements the new Online Streaming Act.
The commission asked the public to submit comments by last week into two out of three consultations it is holding about the implementation of the new Broadcasting Act framework, including who should register with the CRTC for the purposes of collecting data and possibility requiring to contribute to the Canadian content system.
But some of the major broadcasting players are concerned that the CRTC’s proposal to exclude only broadcasters at $10 million annual revenue and lower would capture many small players still trying to enter the market and compete.
“The threshold is too low,” Bell said in its submission, “which could impact the relevance of the registration process and impose a substantial administrative burden on smaller online undertakings who do not contribute in a significant matter to the Canadian broadcasting system.”
Bell, sharing a similar sentiment to many calling for a threshold change, said the threshold should be at $20 million per online undertaking “as it will capture only major players, without compromising the objectives behind the registration regime.”
Bell, which owns the CTV news network, also urged the commission to exempt online undertakings that primarily provide news, another point it shared with several submitters.
The content-owning telecom also said that the commission should not fixate on which online undertakings are associated with larger broadcasting groups and which stand alone as an online-focused outfit. It suggested that all online undertakings, regardless of affiliation, should register at or above the threshold.
“For example, under the proposed criteria, all online undertakings operated by a traditional broadcaster, where the whole group – both online and traditional – makes more than the threshold, would be subject to regulations and [conditions of service], even if the total revenue of the online activities of this group is under $10M, and even if this broadcaster is already contributing to the system via its current licence conditions,” Bell said.
“In contrast, a foreign standalone online undertaking, making the same level of revenue as the online undertaking operated by a broadcasting group, would be exempt,” Bell added.
While Rogers said it isn’t opposed to the $10-million reporting threshold for monitoring purposes, it said the CRTC may need to raise that for the purpose of extracting contributions. The cable company also urged the commission to significantly reduced the existing 5 per cent tax imposed on BDUs’ gross revenues and lighten the current regulatory requirements on broadcasters, which Bell said should be the priority. It also said the CRTC needs to ensure that, in implementing the new framework, the commission does not add any additional regulations or contribution requirements on BDUs.
Pure-play media company Corus, which has struggled with a tough advertising market, also said the threshold should be $20 million of gross revenues. It also agreed that all online services that meet that threshold should register, regardless of whether they’re part of a broadcasting group or are a standalone online outfit.
Google, Apple, TikTok and the Public Interest Advocacy Centre all argued that the commission should use the existing revenue thresholds for audio and audio-visual services, which are at $25 million and $50 million, respectively. Apple added that the commission should exempt podcast services and audiobooks, while TikTok said the CRTC should ensure that social media services are excluded – a sentiment the CRTC has already said it will heed. (PIAC said the commission must explicitly exclude individual creators.)
On the other end, the Alliance of Canadian Cinema, Television and Radio Artists, a union representing performers in English-language media, said the threshold should actually be $5 million. “A stand-alone service with net Canadian revenues of $5 million is significant,” ACTRA said. “As appropriate, it should be contributing to Canadian content.”
“ACTRA further proposes that services with gross annual revenues in excess of $1 million should be required to register and to provide such information about their services as the CRTC may require,” the union added.
Corus also said the transactional video on demand (TVOD) services – which the CRTC is proposing with video games could be exempt – should also be forced to contribute.
The company said there’s no reason a $300 million segment of the Canadian video services market, which includes Apple’s iTunes, Google Play, and Microsoft’s movies and TV app, should be excluded.
In agreeing that the threshold should be raised to $20 million, the Canadian Association of Broadcasters said all TVOD services either need to be regulated or not regulated. “There is no rationale for treating transactional VOD differently for regulatory purposes based on how it is delivered to the end consumer,” it said, adding all online undertakings that meet the threshold should register.
Netflix echoed similar sentiments from the Motion Pictures Association of Canada in arguing that there’s no rationale for excluding TVODs because it constitutes a “significant segment of online undertakings operating in Canada.” Netflix added excluding this group would present an “incomplete picture” of the overall broadcasting landscape.
Telus, sharing a concern of Eastlink and PIAC, said the CRTC should clarify that registering with the CRTC does not necessarily mean they will be forced to contribute to the system, so as to avoid scaring away potential online entrants. It also shared Bell’s suggestion that the CRTC register all online outfits that meet the threshold, regardless of group affiliation.
Otherwise, the CRTC is leaving a possible avenue for imbalance in the system, Telus said.
Eastlink added that any online service that competes directly with the broadcasting distribution undertakings should be forced to register, specifically pointing to direct-to-consumer streaming services like Corus’s StackTV, Bell’s TSN Direct, and Rogers’s Sportsnet Now.
Eastlink’s overall argument is that – because BDUs cannot contribute anymore to the system – broadening the system to more players would reduce the stress on the existing regulated entities.
PIAC and the Forum for Research and Policy in Communications both note a possible problem with the CRTC’s authority under the Broadcasting Act. Both organizations argue that it isn’t clear that the existing legislation gives the CRTC the jurisdiction to penalize online services or force them offline if they don’t register with it.
PIAC said the commission should, therefore, avoid onerous registration requirements or else it will face challenges on jurisdiction.
The FRPC took issue with the fact that the CRTC did not extend the deadline for this proceeding as it requested with 11 other organizations. That reality, the organization said, means the public is left with incomplete information as to the rationale for some of the proposals put forth by the commission, including why it even proposed the $10-million threshold which many disagree with.
The FRPC also said the CRTC has not explained the rationale for excluding the three categories of services – video games, online transactions and services under $10 million in revenue.
“The absence of any information showing why the three exempted classes of online undertaking cannot contribute to the implementation of Canada’s broadcasting policy risks creating the impression of arbitrary decision-making that is not based on actual provisions of the Broadcasting Act,” the FPRC said.
