The Motion Picture Association-Canada (MPA-Canada) is challenging the Canadian Radio-television and Telecommunications Commission’s (CRTC) decision to have foreign-owned streamers contribute to local news production in the courts.
MPA-Canada – which represents the interests of Netflix, Disney, Sony, Paramount, Universal and Warner Bros. Discovery – announced on Thursday (July 4) it has filed two applications to the Federal Court of Appeals, one for a leave to appeal the CRTC’s decision and another for a judicial review.
Last month, the CRTC issued a decision on base contributions from foreign-owned online undertakings in Canada, which requires them to give 5% of their Canadian revenues to a variety of funds. Online undertakings affiliated with Canadian broadcasting groups are exempt from making contributions.
Audiovisual undertakings are required to give 1.5% of revenues (about 30% of their total required contributions) to the Independent Local News Fund, to be administered by the Canadian Association of Broadcasters (CAB). Another 2% is allocated to the Canada Media Fund, with the remaining 1.5% allocated to various funds, including the Indigenous Screen Office and Black Screen Office’s independent production funds.
Both applications were filed on the grounds that the CRTC did not provide strong enough reasoning for why foreign-owned online undertakings should be required to pay into local news when it’s not part of their business models.
The filings cite wording from the amended Broadcasting Act under Bill C-11, which says foreign-owned undertakings should contribute in an “equitable manner” that “is appropriate in consideration of the nature of the services provided.”
“The CRTC’s decision to require global entertainment streaming services to pay for local news is a discriminatory measure that goes far beyond what Parliament intended, exceeds the CRTC’s authority, and contradicts the goal of creating a modern, flexible framework that recognizes the nature of the services global streamers provide,” said MPA-Canada president Wendy Noss in a statement.
MPA-Canada also argued that the CRTC’s decision would lead to the unintended disclosure of confidential and commercially-sensitive financial information. Since the decision states online undertakings must contribute directly to the funds, the organization argues that these organizations would be able to calculate a company’s financial earnings based on the amount they received.
“The provision of such sensitive financial information to the CAB is particularly concerning and prejudicial since the CAB acts as a representative voice for private television broadcasters, which are both competitors to the Services’ streaming services, and content licensees of the Services or their affiliates,” read court filing.
The filings also noted that the CRTC has called for comments on the order, which is not set to be implemented until Sept. 1. The deadline for replies was July 2.
When the CRTC’s decision was first issued, Noss said it “reinforces a decades-old regulatory approach designed for cable companies,” and called for a more flexible approach in later stages of implementing Bill C-11, including the definition of Canadian content.
“The MPA’s argument that they should not need to contribute to support Canadian newsrooms because they do not produce news demonstrates the foreign global streamers’ avaricious approach to the Canadian market,” said CAB president Kevin Desjardins in a statement to Playback Daily. “The foreign online broadcasting giants are only interested in how they can use Canada to feed into their global interests, and are completely indifferent to the goals of the Broadcasting Act.”
A representative from the CRTC told Playback it would be inappropriate to comment while the matter is before the Federal Court of Appeal. The Commission has previously indicated that the base contributions decision is final.
Image: Unsplash