By Ahmad Hathout
OTTAWA – The CRTC has set Friday who will be subject to regulation under the new Broadcasting Act regulations as part of its implementation of the new Online Streaming Act, setting the threshold at $10 million and higher in annual broadcasting revenues in Canada.
The new entities will need to register by November 28, 2023, so that the regulator can keep tabs on them.
Registering requires the entities to provide their basic information like name, phone number, mailing and email addresses, what services they offer and out of where they are incorporated.
The CRTC said it will publish the list of registrants in the name of transparency.
The regulator elected to regulate at the broadcasting ownership group level with revenues from traditional services to get a bird’s eye view of a company’s entire operations, including online products and transitions to the digital sphere.
“Including revenues from both traditional and online services would allow the Commission to gain a better understanding of the Canadian online broadcasting environment and how ownership groups are adapting their activities in that increasingly digital environment,” the CRTC said.
It added that setting the threshold in this way would also disincentivize the use of accounting practices to shift money between services to reduce the revenue of other businesses.
The commission said while it recognizes that this may implicate some smaller digital outlets, it said that the burden is “very light,” given that the information collected is basic and done on a one-time basis.
“The benefits of registering undertakings in this manner outweigh the limited impact on certain online undertakings whose operator forms part of a Canadian broadcasting ownership group,” the commission said.
Exempt entities will include those that provide single activity sales such as video game and audiobook services, unique transactions, and those affiliated or not with broadcasting ownership groups that are bringing in less than $10 million annually in revenue.
The regulator said it didn’t set a lower revenue threshold – some have asked for thresholds as low as $1 million – in part because it would be administratively impractical, considering that many outlets will be sitting with very low or no revenue at all.
It argued that these outlets, which are not affiliated with ownership groups, would not “contribute in a material manner” to the implementation of the goals of the new regulations.
“A $10 million threshold would include online services offered by a larger number of broadcasting ownership groups, which would include a more representative set of broadcasting ownership groups,” the CRTC argued, adding such a threshold would not deter new services from entering the Canadian market.
“A higher level would exclude many medium‑sized undertakings, impairing the Commission’s ability to fully understand and therefore regulate and supervise these aspects of the broadcasting ecosystem.”
The decision also touched on the need to register social media platforms in order to monitor them for the time being, seeing as they play a “large and increasingly dominant role in terms of the Canadian online broadcasting advertising market.”
“The Commission recognizes that the requirement to register may need to be reviewed in the future once the Commission has collected sufficient information on these services, and once it has provided more clarity and resolved a variety of issues concerning these services,” the decision read.
But the commission reiterated that social media users – even those making above the $10 million thresholds – will not be required to register with the commission.
The decision also noted that it will require some podcasts, a burgeoning field of media, earning over the monetary threshold to register.
“Individuals that host podcasts on their own websites or make them available on a subscription service platform other than a social media service are not explicitly excluded from the Broadcasting Act under subsection 2(2.1),” the commission said. “Nevertheless, the Commission expects that such individuals (i.e., individuals that transmit or retransmit their podcasts through their own websites, or that otherwise upload their podcasts to a service available on the Internet) would not be required to register because their annual revenues, in most likelihood, would be below the proposed exemption threshold.”
The regulator also said it will require broadcast news that meet the criteria to register with the CRTC to give it a fulsome view of that industry. It will not require printed news to register simply because it does not have jurisdiction over that.
The CRTC had initially been urged to consider a subscriber-based, as opposed to a revenue-based, threshold to determine who should register. Those recommendations came from Telus and some associations and unions representing creative groups.
Telus said the process would be simpler and would be “a better indicator of relative size than annual revenues, which can be impacted by factors such as different profit margins.”
Corus opposed the subscriber threshold on the basis that there are many different service delivery and monetization models, which could mean that the system could exempt advertising-driven platforms from regulation.
The regulator went with the revenue model in part because it would “not provide an accurate understanding of the online broadcasting system” and “would not capture those online undertakings that have no subscribers, such as advertising-based online undertakings,” it said.
The commission’s implementation of bill C-11 is being done in phases.
In the winter, it will hold public consultations which “may include” reviewing the definition of Canadian content; evaluating market access, news and local programming and competitive behaviours; assessing tools to support Canadian audio content; tools to develop and support indigenous content; and protecting consumers with an examination of broadcaster codes of conduct.
