Making a Monster

The final report of the Broadcasting and Telecommunications Legislative Review Panel, grandly entitled Canada’s Communications Future: Time to Act (the “BTLR Report”) has already attracted its share of commentary, much of it, but by no means all, sharply critical. As Michael Geist has explained, the report articulates

a vision of a highly regulated Internet in which an expanded CRTC … would aggressively assert its jurisdictional power over Internet sites and services worldwide with the power to levy massive penalties for failure to comply with its regulatory edicts. 

The discussion has mostly focused on the wisdom of the BTLR Report’s 97 recommendations for regulating the way in which Canadians engage with the online world, and also on their impact on freedom of expression. But one aspect of the report ― indeed, not merely an aspect but a fundamental element of the report’s underlying philosophy ― has, I think, received less attention, although Professor Geist alludes to it with his reference to “an expanded CRTC”: the report’s commitment to administrative power. This is, perhaps, a less obvious issue, but we should not underestimate its significance. If followed, the report’s recommendations would not merely expand the CRTC, but make into a bureaucratic behemoth. We must not let this happen.

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The BTLR Report recommends multiple amendments to the legislation governing electronic communications in Canada that would tend to produce the “highly regulated internet” to which Professor Geist refers. Yet the striking thing is that most of the proposed changes do not describe the regulations that they call for with any precision. Instead, they say that the CRTC should be given vast powers to bring into being the report’s imagined brave new world.

The CRTC would be givens new powers to make rules of general application. Most ominously, it would be given the ability to regulate “media content undertakings” ― that is, all manner of entities creating their own content, whether written, sound-based, or visual, as well as those providing platforms for the content created by others, everything from a humble podcast to giants like Netflix, Facebook, and YouTube. These “undertakings” would be required to register with the CRTC, which would be

enable[d] … to establish classes of registrants, to amend registrations, and impose requirements — whether through conditions of registration or through regulations — on registrants (Recommendation 57)

These requirements could, in particular, include “codes of conduct, including provisions with respect to resolution mechanisms, transparency, privacy, and accessibility”. (Recommendation 74) At the same time, the CRTC would be given

the power to exempt any media content undertaking or classes of media content undertakings from registration in instances in which — by virtue of its specialized content or format, revenues, or otherwise — regulation is neither necessary nor appropriate to achieve media content policy objectives. (Recommendation 58)

In other words, the CRTC would decide ― with virtually no guidance from legislation ― both what the rules for “media content undertakings” would be an who would in fact have to comply with them at all. In particular it would be to

impose discoverability obligations on all audio or audiovisual entertainment media content undertakings, as it deems appropriate, including …  prominence obligations [and] the obligation to offer Canadian media content choices(Recommendation 62). 

The CRTC could impose similar requirements on “on media aggregation and media sharing undertakings” ― again “as appropriate” (Recommendation 73). The CRTC would also be directed to “intervene, if necessary … in order to respond quickly to changes in the communications services, improve transparency, and promote trust” in the face of technologies that “combine algorithms and artificial intelligence with Big Data” (Recommendation 93).

The CRTC would also be empowered, and indeed required, to regulate behaviour of individual market actors. It would be given the remit “to ensure that rates are just and reasonable” in “key electronic communications markets” (Recommendation 29). Indeed, in a rare instance of seeking to restrain rather than expand the CRTC’s discretion, the BTLR Report suggests that the ability of the CRTC to “forbear” from regulating the justness of rates should be eliminated (Recommendation 30). The CRTC would also be given the power to “regulate economic relationships between media content undertakings and content producers, including terms of trade” (Recommendation 61). In relation to CBC/Radio-Canada, the CRTC would be tasked with “overseeing all its content-related activities” (Recommendation 83).

But the report would not only have the CRTC make the law for the online world. It would also be given a substantial autonomous power of the purse. It would be given the power to designate “from an expanded range of market participants — all providers of electronic communications services — … required contributors to funds to ensure access to advanced telecommunications”. (Recommendation 25) Among the requirements the CRTC would be able to impose on those required to register … would be “the payment of registration fees” (Recommendation 57). It could, further, “impose spending requirements or levies on all media content undertakings, except those” mainly providing written news (Recommendation 61), “some or all” of which it could use to fund “to the production of news content” through “an independent, arm’s length CRTC-approved fund for the production of news, including local news on all platforms” (Recommendation 71).

The CRTC would acquire additional adjudicative powers too. For example, Recommendation 38 suggests that it should resolve disputes over the location of telecommunication infrastructure. More significantly, it would be both prosecutor and judge when “imposing penalties for any failure to comply with the terms and conditions of registration” imposed on “media content undertakings” (Recommendation 57), with “resolv[ing] disputes” among which it would also be tasked (Recommendation 61). Not that this adjudication would necessarily look like that done in the courts, since the BTLR Report would empower the CRTC “to issue ex parte decisions where the circumstances of the case justify it”. (Recommendation 75)

The prophet of the administrative state in Canada, John Willis, described administrative agencies as “governments in miniature”. One hesitates to describe the law-making, trade-regulating, money-grabbing CRTC envisioned by the BTLR Report as in any sense miniature, but it sure looks like a government unto itself, albeit a rather undemocratic one. In addition to the Commissioners who would exercise legislative, executive, and judicial powers, it would have a sort of representative body, the Public Interest Committee, “composed of not more than 25 individuals with a wide range of backgrounds, skills, and experience representing the diversity of public, civic, consumer, and small business interests, and including Indigenous Peoples”. (Recommendation 15) It’s not quite clear who would be appointing these people, but it certainly does not seem that, despite their supposed mandate to represent the public, they would be elected. Not to worry though: there would also be funding, out of fees collected by the CRTC, for “public interest interventions” (Recommendations 12 and 13), in case, I suppose, the Public Interest Committee doesn’t sufficiently intervene to represent the public interest. And, in addition to the prosecutorial and judicial functions of the Commissioners, there would be

an independent, industry-funded, communications consumer complaints office with the authority to investigate and resolve complaints from individual and small business retail customers of services covered by the respective Acts,

whose “mandate and structure” the CRTC would “create and approve” (Recommendation 96).

Meanwhile, outside control over this machinery will be be reduced. The Commissioners, who are currently appointed to renewable five-year terms, would instead serve for seven years, with no possibility of renewal (Recommendation 4). A limited form of Parliamentary supervision, the laying of government “directions” to the CRTC before the Houses of Parliament would be abolished in the interests of swift regulation (Recommendation 6). And, of course, given the vagueness of the legislative guidance to the CRTC and the breadth of its mandate, it is unlikely that the courts would intervene much to police its regulatory activities.

To sum up, the CRTC would be put in control, with very few restraints, of Canadians’ interaction with the online world, and with one another. Who can speak online and on what conditions ― the CRTC would have control over that. How much they have to pay for the privilege, and where the money goes ― the CRTC would have control over that. How disputes among them, and between them and the CRTC itself, are to be resolved ― the CRTC would have control over that too. The only “checks” on it would come from handpicked representatives of the “public interest” as the CRTC itself conceives it ― not from Parliament or the courts.

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The empowerment of the CRTC proposed by the BTLR Report is, of course, no accident. It proceeds from a specific philosophy of government, which the Report describes quite forthrightly. According to its authors,

The role of government is to establish broad policies. The role of regulators is to implement those policies through specific rules and in a transparent and predictable fashion. Legislation is the key instrument through which government establishes these policies. It should provide sufficient guidance to assist the CRTC in the discharge of its duties, but sufficient flexibility for it to operate independently in deciding how to implement sector policy. To achieve this, legislative statements of policy should set out broadly framed objectives and should not be overly prescriptive. (46-47)

In other words, government ― Parliament is left out of the equation entirely, as if it has nothing to do with legislation ― should mostly leave the CRTC alone. Indeed, it is important to preserve “proper balance between the government’s role in policymaking and the regulator’s role in implementing those policies independent of government influence”. (47) And, judging by the amount discretion ― to make law and dictate the behaviour of individual organizations, to levy fees and spend money, to identify, prosecute, and condemn alleged offenders and to adjudicate disputes ― the BTLR Report would vest in the CRTC, the “balance” is really all on the side of the regulator.

This is the philosophy the BTLR Report would impose on the 2020s and, perhaps, beyond. It ostensibly envisions “the CRTC’s shift toward a future-oriented, proactive, and data-driven style of regulation”. (44) But its ideology comes, not from the future, but from a distant and, as article on “The Depravity of the 1930s and the Modern Administrative State” by Steven G. Calabresi and Gary Lawson about which I blogged here shows, detestable past. As Professors Calabresi and Lawson explain, President Franklin D. Roosevelt’s

administration and a compliant Congress created a vast array of new “expert” regulatory agencies, many of which followed the “independent” model by insulating the agency heads from at-will presidential removal, and many of which contained (and still contain) statutory authorizations to the agencies so vague as to be literally meaningless. … These agencies, controlled neither by the President nor by Congress, made life-altering decisions of both fact and law subject only to deferential judicial
review. (829)

This is the governance model proposed by the BTLR Report. Its original backers

fundamentally did not believe that all men are created equal and
should democratically govern themselves through representative institutions. They believed instead that there were “experts”—the modern descendants of Platonic philosopher kings, distinguished by their academic pedigrees rather than the metals in their souls—who should administer the administrative state as freely as possible from control by representative political institutions. (829)

(For more on the beliefs of 1930s pro-administrativists, see also this post by co-blogger Mark Mancini.) Judging by their proposals, the views of the authors of the BTLR Report are rooted in just this kind of thinking. They mistrust the free market as well as democratic institutions, and want fundamental decisions about what is, by their own account, an unbelievably important part of our lives to be made by officials deemed wiser than everyone else.

And if the philosophy behind the BTLR Report’s proposed future goes back a mere century, its institutional vision is considerably older still. In fact, at the risk of sounding a bit like Philip Hamburger (which, after all, isn’t a bad thing!) I would argue that it amounts to a counter-revolution against the 17th-century subjection of executive authority to law, and a reversal of the the post-1689 constitutional settlement. To be sure, everything the BTLR Report proposes to do would be covered by the fig leaf of ― deliberately vague and unconstraining ― legislative authority. But in substance, the proposals amount to executive law-making contrary to the Case of Proclamations, executive dispension from the law contrary to article 2 of the Bill of Rights 1688, executive adjudication contrary to the case of Prohibitions del Roy, and executive taxation contrary, this time, to article 4 of the Bill of Rights. James I and James II would be proud.

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So when we hear that “this time it’s different” ― that the online world is like nothing we’ve seen before ― that its actors “pose a unique set of challenges for contemporary regulators”, as Paul Daly argues ― and that this justifies the sort of overwhelming regulatory response recommended by the BTLR Report, we need to be skeptical. For all that the issues raised by the modern world are ― now as a century ago! ― said to be quite unlike anything that came before, the solutions offered are the same old. More unfettered bureaucratic power is always said to do the trick. When all you have is a hammer…

More recently, a very different philosophy seemed, however briefly, to prevail in the online world. In the 1996 “Declaration of the Independence of Cyberspace“, John Perry Barlow proclaimed:

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.

The Declaration isn’t much more remembered than the term “cyberspace” itself, nowadays, and the weary giants whom Barlow was taunting have come after the cyber-libertarians like Pushkin’s Stone Guest. If the authors of the BTLR Report get their way, the we would indeed be governed, to keep with the 17th century English political thought, by Leviathan himself.

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NOTE: A petition to “the Government of Canada to Reject the recommendations regarding the legislation and regulation of free speech, free expression and the free press made by the” BTLR Report is open for signature at the House of Commons website. Please sign it!