Former CRTC leaders say regulator is not equipped to oversee the Online News Act

Former leaders of Canada’s broadcasting and telecom regulator say the body is not equipped to oversee the implementation of the federal government’s legislation requiring major tech giants, such as Google and Facebook, to pay Canadian media outlets for news content that appears on their platforms.

The Online News Act, introduced by the Liberal government last week, proposes that the Canadian Radio-television and Telecommunications Commission (CRTC) administer a framework for news outlets to collectively negotiate deals with tech companies to share online advertising revenues when the parties cannot reach a voluntary agreement. Google and Facebook, two of the web giants that would be forced to provide major funding to Canada’s struggling news sector, have yet to comment on the government’s bill, nearly a week after it was tabled in Parliament.

The federal budget proposes $8.5-million over two years for the CRTC to establish a new legislative and regulatory regime to oversee the bill.

However, critics are concerned about the role of the CRTC. Konrad von Finckenstein, who was CRTC chairman from 2007 to 2012, said the proposed responsibilities for the CRTC under the bill, known as C-18, are not in an administrative tribunal’s “wheelhouse.” The CRTC regulates and supervises broadcasting and telecommunications, and its mandate clearly stipulates that it does not intervene in newspapers or magazines. Mr. von Finckenstein said the government should have proposed the creation of a new regulator devoted to the internet instead.

“The CRTC has great expertise in terms of broadcasting and telecom, but here you are really asking them to make a decision on the basis of competing businesses and whether ... the pie being sliced between them is fair or not. That really is something quite different from what they normally do,” he said.

Former CRTC vice-chairman Peter Menzies said putting the CRTC in charge of a framework for negotiating deals between news outlets and tech giants is “like putting a baseball umpire in charge of a soccer game.” He said the government, via the CRTC, has no business dictating how money is spent in a commercial transaction between two private parties.

“That’s shocking that they think they could go that far,” said Mr. Menzies, who was vice-chair from 2013 to 2017. “Trust levels in institutions are dropping everywhere and it’s very, very important for media to have high public trust levels. ... Government nosing around, however benignly they say they are doing it, is just not a good look.”

Mr. Menzies suggested the government let news organizations and tech giants negotiate their own agreements and, once a deal is reached, simply ask them to report it to the deputy minister of Canadian Heritage or the CRTC.

Last week, Heritage Minister Pablo Rodriguez said Bill C-18 seeks to address the “market imbalance” between news outlets and tech giants.

Law professor Michael Geist said that means the issue would be better resolved through the Competition Bureau rather than the “cultural regulator.” The bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses.

“You’ve identified a competition problem. If that’s how you want to address it, then bring in your competition authority,” said Mr. Geist, Canada Research Chair in internet and e-commerce law at the University of Ottawa.

Mr. von Finckenstein, Mr. Menzies and Mr. Geist also criticized the government’s proposed changes to the Broadcasting Act last year.

The CRTC said it was not in a position to grant an interview with current chairman Ian Scott, and directed questions about C-18 to Canadian Heritage. A spokesperson for Mr. Rodriguez said the CRTC knows how to administer a similar arbitration system in broadcasting, adding that the tribunal’s role will be “fairly light-touch.”

“The CRTC is a public-interest regulator that operates arms-length from the government and has served Canadians for over 50 years. With a new bill comes new responsibilities,” press secretary Laura Scaffidi said.

Media outlets say the dominance of tech companies has left few advertising dollars for everyone else. Several Canadian news organizations and the industry lobby group News Media Canada, of which The Globe and Mail is a member, have urged the federal government to follow Australia’s example and introduce industrywide measures that force tech companies to pay for content.

Bill C-18 would allow groups of news outlets, including print, television and radio broadcasters, to reach deals with tech giants. If an agreement cannot be reached, the bill would permit news outlets to go to the CRTC for mediation. If mediation fails, the CRTC would initiate arbitration, which would issue a binding contract for the news outlet (or outlets) and the digital platform.

Facebook, Google and Apple have already signed partnerships with some news organizations, including The Globe, to pay for the right to use their content. The agreements could exempt the digital platforms from mandatory CRTC-led bargaining if they meet six requirements, such as contributing to the sustainability of the Canadian news industry.

Australia has never had to use its News Media Bargaining Code, as media outlets and tech giants reached voluntary agreements. Facebook shut down news-sharing on its platform in Australia last year in response to the legislation. The tech giant eventually lifted the ban and pursued licensing agreements with publishers.

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