CHPC Committee Meeting

    I call this meeting to order, this being the fourth meeting of the Standing Committee on Canadian Heritage pursuant to Standing Order 108(2), the study of Canada and new medias.

    Our witness this morning is Mr. Jacob Glick, Canada policy counsel, Google Incorporated.

     Welcome, Mr. Glick. Please make your presentation.

    Thank you very much, Mr. Chair.

    Thank you very much, members, for having me to your committee today.

     I really appreciate the opportunity to engage in a dialogue about the future of Canadian content and the future of content online.

    My name is Jacob Glick. I'm Google's Canada policy counsel, based here in Ottawa.

    I really only have two points to make in my presentation today, so if you fall asleep or get bored during most of it, you can remember these two points: one, everything is converging onto the public Internet; and two, a corollary of that is that this convergence is good for innovation, consumer choice, and competition.

    Let's think about that in its biggest picture.

    I should add before I go on that for U.S. security regulations--not security as in the kind of screening you go through at the airport, but securities--I can't make any forward-looking statements. We're in a quiet period corporately right now, so I can't say anything about products that Google is releasing in the future, but you probably weren't going to ask me about that in any event. In case you were, I can't tell you about them.

    Let's think about these things. Everything is converging to the public Internet and that convergence is good for innovation, choice, and competition.

     I don't want to say this pejoratively, but what does the “old model” of communications that we have known for the last 150 years look like? In particular, what does the old model of mass communications for the last 50 years look like? It is what some people have described as a world of stovepipes, that is, a single network operated by a single entity carrying a single application, more or less.

     These are broad generalizations, but the point is still the same. The cable company runs the cable network and carries cable TV, or the phone company operates the phone network and carries telephone communications. This is the world that we had come to expect pre-Internet.

    As for the downside of this world--and there are a number of downsides--I'm going to focus my comments primarily in the area of culture, but there are a whole bunch of ways that this model is relevant in the context of innovation and technology as well. In the context of culture, it means there is limited shelf space for content.

     For example, in cable television there is a finite number of cable channels that you can have. Even if it is 500, it is still finite. In broadcast television, the available spectrum is limited, so there can be a finite number of broadcast television channels. More importantly. even if there are a finite number of channels, the hours in which people are watching--the prime time, so to speak--is even more limited. All of this produces a limited supply and a limited shelf space, and in that context and with those presuppositions, our existing broadcast regulations have evolved.

    They have presupposed that there are not enough hours in the day to show the kind of content that will promote Canada's vision of itself and allow Canadians to tell stories to Canadians. But really what this has meant--not the broadcasting policy, but the limited shelf space more broadly--is more gatekeeping; that is, the broadcast networks or the cable companies or whoever decide which programs go on TV and which personalities go on TV.

    There has been an evolution of particular formats. We're used to 22 minutes of television with 8 minutes of commercials. That format is the kind of audiovisual format we have come to expect.

     So there is more gatekeeping, and part of this means that fewer voices can be heard, because the kinds of people who will be put on TV are going to be limited simply by the time available to show them and simply by the number of channels available. It often means, unfortunately, less Canadian culture and sometimes more banal culture—and I'm not speaking about all culture—because it has to appeal to the broadest audience possible to get viewers.

    So that's the old model of communications.

    By the way, a similar type of analysis can be applied to newspapers as well. It's not just television and cable. In the interests of time, I won't get into that, but I would encourage you to talk to somebody like Mathew Ingram, a former columnist for the Globe and Mail who is now a columnist for GigaOm, which is a terrific blog that I hope you all subscribe to. He is based in Toronto and is a deep thinker on many of these issues.

    The stovepipes are what we have been used to in mass communications, but the transformation that we've seen with the Internet is what some refer to “the virtuous hourglass”, a term coined by my colleague Rick Whitt in D.C. I'll ask you to imagine all the stovepipes squeezed them together to form what looks like an hourglass. At the top of the hourglass are all of those separate applications that used to be carried over individual stovepipes. TV, cellphone, regular telephone, cable, with all different kinds of content, music, and everything, are now all converged on the public Internet.

     In fact, they're all carried over the Internet. You can get your phone service on the Internet. You can have wireless communications effectively over the Internet, because if you have a VoIP phone on your iPod, if you are on a WiFi hotspot, for example, you can effectively get mobile communications over the Internet. You can of course get television signals, all sorts of audiovisual programs, and news--everything.

    This is why I say that everything is converging to the Internet. In turn, the Internet is becoming the platform for what all of these pre-existing stovepipes are now carrying. The cable system, for example, is now another conduit for carrying high-speed Internet into your house, and so are the phone and wireless systems. Cellphones are another conduit for carrying high-speed Internet, not just into your house, but everywhere you go.

     So you have this virtuous hourglass, which means that all of these previously existing applications that used to be self-contained and available only over the stovepipe, are available anywhere you have Internet access, and they are available from any number of competitive providers. No longer do you have to own a television channel or a newspaper to have your voice heard. If you have a great idea and passion, you can be heard, seen, and read by millions or hundreds of millions of people all around the world.

    This is what I sometimes refer to as a giant high-five. It's a giant high-five because it leads to all sorts of cultural innovation in the sense that there are all sorts of new forms of content being created, new voices being heard, and different languages and viewpoints, all of which can be explored because they are not bound by the same limited shelf space of the old model of cultural distribution. In fact, this has led to a renaissance in non-commercial speech.

     There are, on a global basis, 22 hours of video uploaded onto YouTube every minute. By any consideration, that is a lot. If you were interested in watching only Canadian content, you could watch Canadian content every day all day long, 24-7, and never see the same thing twice on YouTube.

    This is true not just of YouTube, by the way. I'm using that as an example, but it is true of the Internet broadly. If you are interested in Canadian content or in new and different voices, they are all available to you, and available precisely because of the open nature of the Internet, where anybody with a good idea can connect with and reach new audiences. This has led to tremendous choice for consumers, content creators, and producers, a whole ecosystem of creation. It has also led to rapid innovation in platforms, cultural content, and applications.

    All of this, by the way, is very good. It's good news for consumers. It's good news for content creators. It's good news for Canadian culture, because more Canadian culture can be created, seen, and enjoyed than ever before and can reach global audiences in a way that was never possible--as well as audiences here at home, I should add.

    What are the regulatory implications of this? As I think the committee is already well aware--and this is what animates the study that you have undertaken--the old regulatory presuppositions are challenged and our regulatory models are in flux. In a world of no scarcity, we have to question whether many of our old regulatory instruments still make sense.

     In addition, there are new economics of content that also have regulatory implications. If you think about the traditional economics of content, the input costs involved are production, promotion, and distribution. Well, the barriers to production, promotion, and distribution are falling away at a rapid pace.

     For production, if you have an HD camera and a MacBook, you can make a professional quality of video. If you have vibrant social networks and you use effective online targeted advertising, you can promote content in ways never used before. For distribution, with access to the open Internet and all of the platforms available on it for distribution, you can distribute your content, again, often for free, and often in new ways to audiences never before reachable.

    So what are some of the policy considerations, then, with all of that in mind? I will wrap up soon. I apologize if I'm taking too much time.

     First of all, I encourage you not to--and I'll put this in air quotes--“solve problems”. I say that in the sense that some of these things I've described present challenges to many existing constituencies. However, on the whole, they are good for Canadians, good for choice, good for innovation, and good for culture.

     But you will be asked, I suspect, as governments will be asked, to roll back the clock on some of this innovation because of challenges that it presents. I would encourage you to ask yourselves when you're being asked those questions whether you're really being asked to solve a real problem or being asked to solve the problem that an existing business model has in the new world.

    In addition, I'd encourage you not to, as they say, shoot the messenger. Intermediaries play an important role in this system. The more that intermediaries--ISPs and others--are asked to bear the burden of policing content online, the more we will see innovation and distribution undermined, because they will inevitably take actions that will lessen the vigorous cultural discourse we have.

    Finally, this may seem obvious, but I'll say it anyway: avoid the temptation to regulate. Many of these issues actually won't be solved by regulation; they will in fact be hurt by regulation. But when you are legislators, I get it: when you have a hammer, everything looks like a nail. I understand the temptation to do that, but I think the key at the end of the day is protecting and promoting the very openness that is at the heart of the Internet, the very openness that has allowed the Internet to thrive and has allowed culture to thrive online.

    That is the end of my prepared remarks. I look forward to our discussion over the next hour and a half. Thank you very much.

     Thank you.

    With the first question, Mr. Rodriguez, please.

    Thank you.

    Thank you, Mr. Glick. It's nice to see you here.

    You concluded your remarks by saying that we have to protect the openness. I don't disagree in a way, but we also have to protect our culture. That's part of the role we have as a committee and as parliamentarians.

    I'll switch to French now. if you want to use the translation device.

    Yes, thank you.

    I can do it in Spanish if you want.

    Are you okay now?

     Thank you.

    You spoke as if this were all a series of possibilities for the cultural sector, in other words, for our creators and artists. As if the Internet opened up borders, created opportunities and brought only good things. But there are many challenges, as well.

    Could you describe one or two of the big challenges or dangers that this poses for Canadian creators and Canadian culture as a whole?

    Thanks very much for the question. I apologize for not being able to understand the question in French, so--

    That's fine. Your English is very good.

    Some hon. members: Oh, oh!

    It's not as good as yours, but....

    You are right.

    You're right. I presented a very rosy picture. There are challenges that the online universe poses and I'm sure you will hear about many of them in the course of your study.

    One of the most vexing challenges has been that of digital piracy. There are no easy answers to digital piracy. The fact is that it is certainly something that creative communities have struggled with and that online service providers like Google have tried to find ways to assist artists in coping with. For example, on YouTube we have one of the best anti-piracy programs in the world in our content ID system to help identify alleged copyright-infringing content and either take it down off YouTube or monetize it.

    This is the other part of the answer to your question, which is that I think the other challenge for artists is to put themselves in the mindset of taking advantage of all of the opportunities available to them in the new media. To the extent that they're focused only on the mindsets that the previous regulatory system encouraged, whether it's the subsidy and quota model or one particular form of distribution, one of the biggest challenges is opening up to the possibilities of distribution and opportunity in the world of online media.

    You talked about digital piracy, but was Google not charged with and found guilty of copying books on its site without permission?

    Sir, the Google book search project is one that we're very proud of, for a couple of reasons. One is that we have partnered with authors and publishers all around the world to make their content, with their permission, available to users.

    So why did you have that problem?

    A lot of people say you're copying and you're not paying the copyrights. You had to go to court on this. You lost.

    Yes. There are two projects. There's the Google publisher program and then there's the Google library program. Together, they're referred to as the Google book search program. The one you're thinking of is that we made copies of books that were in libraries. We made those searchable, but we never presented the full text of those books unless they were in the public domain.

    Some people feel that merely copying a book, even if you don't present the full text of the book, even if you present only a snippet of it, violates copyright. We took a different position. We think that--in the U.S.--it is fair use.

    But these were two conflicting legal views and the parties were fighting them out. At the end of the day, we came to a settlement. That settlement, if it is approved by U.S. courts, will result in new opportunities for publishers and for authors to find all sorts of ways to monetize many works, and for some of them, the market has been dead for decades.

    Do I have time for a very short question? I can come back.

    I think we had better move on.

    I'll come back to it.

    Thank you.

    Madam Lavallée.

    Thank you very much, Mr. Chair.

    Mr. Glick, we are here to study a possible digital strategy, and some people would just like to study new media. I think we need to do a broader study and focus in on a digital policy. That is why we began hearing from witnesses.

    I will tell you, right off the bat, that I am a bit uncomfortable with the idea of hearing from a Google representative first. I think we should have started with the bigger picture and then gone into specifics, not the other way around. But here you are, and I am glad to see you. If I understand correctly, your message is do not regulate.

    We have heard that a lot from a number of companies that have testified before a number of committees, this one and others. Most of those companies say that we should not make regulations or pass any legislation and that they will handle the situation.

    But experience has shown us that when we do not regulate, companies do what they please. For example, Air Canada, which was forced to provide services in both official languages, is the only airline where customers can be served in French. It is impossible to be served in French by any other airline.

    There is a feeling of unease, and you are not quite answering our questions on new media. You are boasting about a number of achievements. You are right, I think that Google is an extremely heavy hitter in new media.

    In addition, you combine culture and leisure. When we talk about leisure, we talk about people who play Star Wars in their basement, for example, who film themselves and post the video on YouTube, with a fair bit of success from their friends. Culture is something else. It is the work done by professionals, people who try to make a living that way or who do make their living that way and produce recognizable artistic works, whether in visual arts, literature, performing arts or music.

    I want to come back to the fact that you copied millions of books. You say you are very proud of it, but the book publishers association in Quebec, the Association nationale des éditeurs de livres, is not so proud of you.

    True, you may not have posted them all on the Internet yet, but you can, and you did not pay any royalties. And you were rather cavalier about it, telling people that if they were not happy, all they had to do was step back and take you to court—American courts, of course—which creates a whole other problem.

    In addition, the French government finds you a bit intrusive. The Zelnik report even focuses specially on Google and identifies problems with the company. President Nicolas Sarkozy accepted the report's findings.

    It talks more about tax leakage, but, in Quebec and Canada, it would be more appropriate to talk about artistic leakage. The report also calls it particularly harmful and says that it alters the playing field. The report is right when it comes to the economy and taxes, but also when it comes to art.

    You copied millions of books without authors' permission, and you forced them to take you to court if they were not happy, if they wanted royalties or if they simply did not want you to post the material. They have the right to not want you to digitize books.

    You tell us not to make regulations. Why should we listen and do as you suggest? Because you are offering consumers a very large selection? You are. You are giving consumers a very large selection, except that perhaps you should not look at it that way. Here, we are more concerned about artists, their work and respecting their copyrights.

    Was that a question? Which part?

    That's my question.

    We only have about 30 seconds and I know that it's a four-and-a-half-minute question--or many questions.

     If you can answer some of that, I would be pleased. You might be able to send the rest of your answers to Madam Lavallée afterwards.

    Sure.

    Thanks very much for those questions.

    An hon. member: Time.

    Some hon. members: Oh, oh!

    Mr. Jacob Glick: With respect to Google books, maybe it's better if you and I meet individually. I'm happy to go over the project in depth with you.

    We will do it later.

    With respect to the broader question of what our digital strategy should look like and what role there is for regulation, I think there is a role for government to play. I don't mean to say there isn't. Maybe as the discussion unfolds we can talk a little more about what that role might be.

    Thank you.

     Ms. Leslie, please.

    Thank you, Mr. Chair.

    My name is Megan Leslie. I'm the member of Parliament for Halifax. Thanks very much for being here today.

    I have a question for you about this process and a question for you about issues. I hope to get both in.

    With this process, we're doing an exploration of the role of the Department of Canadian Heritage when it comes to new media. Do you have any comments about what our focus should be, maybe with some specifics? What would be your perfect outcome? What are some of the “hows” that we should be looking at to achieve that outcome?

    Do you mean what the department should be focusing on?

    Yes, or the federal government generally.

    I guess part of my message is not to fetishize particular forms of content. Don't fetishize television or movies over online content. The whole world of creative endeavour, professional and otherwise--to go to Ms. Lavallée's question--is a worthy part of Canadian culture.

    All of that needs to be considered as part of our cultural patrimony and part of the things that government is looking to promote. That includes interactive content, digital content, and video games, as well as some of the traditional forms of content that we focused on. It also involves encouraging our creative communities to seek some of the new monetization opportunities that are available to them online.

    So in that word “encouraging”, do you think we need some kind of digital strategy federally? Would you go that far?

    Yes. I mean, here is my skepticism on a digital strategy; all the kids are talking about it these days and it's all the rage in Ottawa. I wouldn't want to pour cold water on that, but things change so rapidly that if we dally and set up a royal commission or whatever, three years later we'll have a digital strategy and it will be irrelevant. If we are going to have a digital strategy, we need to have it quickly and it needs to be nimble enough that we can adapt as technology adapts.

    That's the tension between strategies and regulating. I think there's a pretty strong tension there.

    Going directly to the issue of copyright, I am not the regular member on this committee; it's Charlie Angus, who I think you know. My background is law, but I didn't do copyright law or IP. Charlie's office gave me this really interesting story--I'm sure you know about it--about Beyoncé putting her own videos up on YouTube and then being asked to take them down because she didn't have copyright on them...? Is that...? I'm sure it's much more complicated.

    But looking at this example, are there other examples of this sort of absurd outcome? What would be the role of the federal government when it comes to creating copyright legislation that could actually balance the needs of consumers, remuneration, and fair access? What would be our role there?

    Well, certainly the federal government has a big role to play, and we're all expecting copyright reform in the next few months, as proposed by the industry minister and the heritage minister. This committee and the industry committee will certainly play an important role in that.

    You've seen in examples like the one you've suggested--and we've seen numerous examples--that it is often tough, especially for intermediaries, to know who has copyright on what. We're put in the unfortunate position of playing cop.

     For example, during the U.S. election, we received a takedown notice for some McCain campaign videos. It was alleged that they were infringing copyright. Now, the McCain campaign wrote to us and said that they were actually perfectly legitimate, that it was free expression and within the bounds of fair use under U.S. law, and they asked why we took them down. The answer was that we were obliged to under U.S. law.

    Examples like this, I think, demonstrate how it's really important to focus on free expression values and rights as they relate to some of these things as well and, in all of this, to try to figure out what is the right balance for artists, for creators, and for everyone who is part of the ecosystem. By the way, I actually think that it's not that hard to do. I know that it feels really hard to do because you're inundated with all sorts of messages and the discourse feels almost religious; it feels like dogmatics from different camps are coming at you.

     I don't think it's that so hard to implement the WIPO Copyright Treaty in a manner that effectively balances the roles of intermediaries, consumers, and creators in a manner that makes most people happy-ish.

     Thank you.

    Mr. Del Mastro, please.

    Thanks very much.

    Thank you, Mr. Glick, for attending today. I found your presentation really fascinating. I think that, as a company, Google is on the edge of a wave in a lot of ways.

     We've talked about how some of the old standbys or standards from the past--what we've come to expect or how we've regulated things in the past--are currently being challenged. But the automobile challenged the horse and buggy, right? The Canadian government of the day could have said that it didn't want cars, that it believed in horses and buggies, and that it was going regulate it so that there would be nothing but horses and buggies.

     I don't think we'd have a very competitive economy if we had done that, and I think that's what's before this committee and this Parliament.

    I have a quick question. A one-word answer will do. Google is giving away search engine applications. You give away maps, satellite views, and streetscapes. You give away software. An author points out that he wrote his book using free Google software called “Google docs”, and he didn't pay anything for it. You also give away YouTube.

     Is your company nuts? Are you crazy?

    Well, a little bit, but the truth is that you can make a lot of money by giving things away.

    So you're not the biggest philanthropist corporation on the face of the planet?

    No, not that I'm aware. We still have shareholders and we're doing okay, and that is a function of the way we've been able to use online advertising.

    Okay. I think this is fundamental to this committee's understanding of how to assist Canadian culture in moving forward and how to build that next new model. A lot of what we refer to as new media in this committee isn't really new. It's emerging. It's digital. A lot of it has been out there for a while, but we haven't actually dealt with it as a government. For example, the CRTC is using tools that were created 40 years ago--and I sympathize with the CRTC--to try to fix modern-day challenges. It's difficult.

    I agree with a number of the things you've said. There is no question about it: platforms are converging. I believe that shows of the future won't be launched to run at 8 o'clock on a Monday on a given network. I think they'll be launched on multiple platforms that are available when the user wants to view them; I think the access is key. I think the unlimited shelf space is key to any business that wants to market itself in the future and take advantage of that zero-cost marketing. That's the future.

    Can you think of any artists right now, Canadian or international artists, who are doing extremely well and started out by giving their stuff away or posting it for free on YouTube? Can you give us any examples?

    Sure I can. One of those examples is Justin Bieber. If you have kids who are tweens, they are probably well aware of him. He got his start on YouTube just by posting videos of himself. So on the point made earlier about trying to differentiate between leisure and culture, there is in fact a convergence of the two, where you have people who are talented and are finding markets and connections for themselves because of making their music available for free--to start. That's not to say that it is exclusively for free, absolutely not.

     I'm saying that the online world--and I think you've articulated this well--is not about simply giving things away for free. It's about finding all sorts of different models, from absolutely free to ad-supported, to subscription-based, and to pay per download. There are all sorts of different business models we can think of that people are using today online.

    But in a way, many of those are in flux as well, because not all advertisers have gone online yet, so there is a lot of uncertainty for all sorts of players. But the truth is that it is working for many Canadian artists today, and it will continue to work, because they will find venues that they would never have found otherwise on the Internet.

    So as for what this is really about, we've talked about the smokestacks of the past, and I think all of us can remember that when we heard a song we really liked and we wanted it, we'd hop in the car and go to Sam the Record Manor somewhere like that and pick it up. That was how you accessed it. Or if you were really quick with the record button, you'd hit “record” to try to make a copy of it when it was on your local all-hits radio station.

    But what the focus of artists now should be is making their product broadly available, and in fact to billions of people, and making small amounts of money. Isn't that Google's theory? Isn't it about literally hundreds of millions of hits, billions of hits, and very small monetary returns on all of those hits that actually add up to a lot of money?

     The short answer is yes, but I wouldn't presuppose how to tell artists how they should make money. It's different strokes for different folks.

    Thank you.

    We'll now move to Mr. Tonks, please.

    Thank you, Mr. Chairman.

    Mr. Glick, thank you for your testimony. It's really challenging to a person who just isn't quite as in step with the pace of the renaissance of technology as you are. You'll have to allow me some space, if you will, and not Google space, but some chronological space, I guess.

    I come from an musical background. I used to have a band. We used to rely on the recording industry and associated structures to protect us. Parliament is struggling with how we protect our artists and our musicians, those who have a story to tell, which in the past has been the mirror that has been the Canadian identity. We are what we see and what we hear. We've been pretty proud of what we've accomplished. Also, we've done it from a cultural perspective. Our bilingualism, our bicultural qualities, and our multiculturalism have been the expression of all of that.

     I appreciate that Google wants to sort of make everybody happy-ish. I love that word “happy-ish”. It reminds me of labour negotiations, where you hope that everybody can walk away not happy but pretty happy-ish.

    What can we do? I mean, we've had Canadian content regulatory frameworks in the past. We've had copyright issues. We've had the CRTC to act as sort of the ombudsman. Out of all your testimony on this renaissance, which I truly believe is a renaissance.... I think Mr. Del Mastro said it went from what you described as stovepipes to smokestacks. In fact, it's like that quantum leap in capacity.

    What can we do to project Canadian culture, whatever that means? I don't mean to be prescriptive, but what can we do? What is your advice? You said that all these new voices and viewpoints are going to happen but that the choice is not to be too invasive or intrusive. What is your advice to this committee? Do we continue the CRTC but with a different sort of invisible hand framework or relationship that emerges as the need to establish some general guidelines or that kind of thing? What do we need to do?

    We see a couple of different approaches. Historically, the regulation of Canadian content has been on two fronts. One is the supply side and the other is the demand side.

     On the supply side, we've had a system of government subsidies, tax incentives, and all that stuff for the creation of Canadian content. I'm not saying that any of it needs to fall by the wayside; there's still a case for the subsidization of Canadian content or the continuation of tax incentives for the creation of professional content. I don't see any problem with that. In fact, the more content the better, from the perspective of intermediaries. On the demand side, when we're regulating the demand part--that is, with quotas--I think quotas are going to be increasingly unsustainable, frankly.

    The other component is the regulation of the open Internet. This is what the CRTC grappled with in its Internet traffic management proceedings last year. It came up with a set of rules that required ISPs to more or less treat all traffic alike. That's the Reader's Digest version. Rules like that are important, because they mean that Canadian producers can have their Canadian content travel just as fast and reach just the same audiences as big Hollywood content and big Hollywood producers. This is why, for example, groups like CFTPA and ACTRA and others were supporting the so-called net neutrality rule at the CRTC.

    Thank you.

    Thank you, Mr. Chair.

    Please go ahead, Mr. Pomerleau.

    Thank you, Mr. Chair.

    Thank you for being here, Mr. Glick.

    Whenever I hear financial types, people in e-commerce or others tell us that we should not regulate, my first instinct is always to think about Adam Smith. I can hear Adam Smith telling us to let the invisible hand of the market settle supply and demand and that everything will be fine. Adam Smith is a wonderful thinker, but things do not quite work that way in reality, at least not in the long term. That is why we look at things from that perspective.

    Even though you start from the premise that government should not regulate or establish too many rules, you say that the government still has a role to play. You mentioned copyright, specifically. Can you elaborate a bit more on what you think the government can do?

    Thanks very much for that question.

    First of all, I apologize if you perceived my comments to be ideological. I think I was just being descriptive, which is to say that in fact Canadian content is a huge success online today in the absence of regulation, so why mess it up, potentially? That's what I meant to say. I didn't mean to say there's no role for government; there is a role for government.

    You asked what the government should be doing, particularly with respect to copyright.

     I would think the following: one, expanded fair dealing; two, notice and notice as a system for ISP liability, the made-in-Canada solution that has broad acceptance among a number of communities; and three, a limited implementation of technological protection measures or rules, ones that link....

    I don't know how much this committee has gone through. You know, I'm a big copyright nerd, so I live this stuff.

    As part of implementing the WIPO Copyright Treaty, a country is required to implement protections for copy control technologies--that is, technologies that prevent copying of works. There are different ways to implement those treaty obligations. I don't think access controls are necessarily an important part of that implementation, and I think that implementing legislation that links the act of circumventing the technology to an underlying act of infringement is important.

    For example, there's a technical protection measure on your cellphone. If you break the lock on your cellphone because you want to use it on another network--you want to fire Rogers and go to Bell, or you want to fire Bell and go to Rogers--the fact that you're breaking the lock doesn't cause you any legal problems. It has to be linked to an underlying active infringement. I think that's an important component of copyright reform. By the way, I should say that's not a Google position, but my personal opinion.

     I certainly think that expanding fair dealing to allow it to evolve as technology evolves is an important consideration to protect innovation. It is also important for legislators because it will prevent people from coming to you for a legislative change every single time technology changes, which I presume would be in Parliament's interest as well.

    Do I have time for another question?

    You have one minute.

    The committee will study all the issues related to new media. The committee will hear from various people. Some of them will not necessarily share your opinion and will probably see themselves on the losing end, to some extent, with Google, either because their work was copied or for some other reason.

    Based on your knowledge of new media as a whole, what do you think a committee like ours should strive to do first?

    Well, I think a study of the opportunities is long overdue. I suspect that many of the things that the committee hears about are the challenges, and I think it's important to hear from the people who are benefiting from the opportunities and who are embracing the opportunities.

    Thank you.

    Mr. Del Mastro.

    Thank you.

    Mr. Glick, we live in what I would call a very exciting environment. We live in a world where anybody can be a broadcaster and where anybody who writes a song can make that song available to as many people as they want.

    In reference to Adam Smith, one of his famous lines was that supply generates its own demand, and in some ways in the YouTube world, that's very true. People are putting a supply of content onto YouTube and there's a demand for that content. Hundreds of millions of people are viewing it.

    It's a challenge to have this discussion about the opportunities that digital technology affords without talking about copyright. Like you, I'm becoming a copyright nerd. Certainly, over the last couple of years, I've had to learn an awful lot about what a lot of people wouldn't consider bedtime reading.

    You talked about fair dealing. There's one thing that's very difficult and very challenging. I've talked about the challenges of the CRTC in regard to having been created in the 1960s to create a dedicated Canadian broadcasting market. We now live in a world where you can't put borders around broadcasting because everybody can be a broadcaster, so it's very challenging.

    In the world of copyright, you mentioned fair dealing. I think it's important, if we're going to bring in a copyright bill, that we don't have to try to reopen this. Since 1996, when we signed onto the WIPO treaty, we've been trying to get an updated copyright bill passed. Different governments have tried to bring in this bill.

    I have to tell you that dealing with fair dealing is a minefield, because there are people on both sides of this. If you look at the issue of fair dealing, how important is it? I know that the U.S. has a system of fair use, whereby you can litigate things and an independent judiciary will determine whether or not something is fair use. But how important is it, in your mind, that any new copyright bill would actually take a look at fair dealing and leave it such that it could be adaptive over time to technology, so that we're not constantly reopening that bill?

    I think it's critical, and I think it's something like this that will help to make a copyright bill future proof, as they say.

    I have referenced the CRTC a number of times. I've talked about how the CRTC has been in control of its sandbox, right? It figures out how things are going to work in the sandbox, but what's happened to them over the years is that the sandbox has actually been moved out onto the beach; so people can play in the box, but there's sand everywhere. That's kind of what has happened in the broadcast market. It has become very difficult.

    As for the fundamental purpose of any copyright bill--perhaps I'll give you an opportunity to agree with me on this--copyright must focus on illegal redistribution. It must protect rights holders and their right to get value for what they've produced. If you start from that fundamental premise on copyright and look at the opportunity that digital or emerging technology affords, then you can see that putting the two together allows for quite an opportunistic platform for artists to really do well, and not just artists, but any creators of content, deep thinkers--creators of virtually anything. Would you agree with that?

    I think our Supreme Court said it best in the Théberge case. They described copyright as a balance, I think as you're describing it, between trying to get works out there--the dissemination of works--and the remuneration of artists who create those works. Ultimately what you're trying to do in copyright is balance those sometimes competing and sometimes contradictory--and sometimes in a vexing manner contradictory--interests for policy-makers.

    I agree that there's a lot of opportunity, though, in getting that balance right for artists--and for everyone, for society.

    You talked about convergence going on and how it's good for innovation, for productivity, and for competition. A Canada that doesn't embrace these things, that tries to regulate, tries to stand against this tide: in your view, is that a Canada that will compete well against foreign nations? Or is that a Canada that ultimately will continue to...? We know that we have productivity challenges in this country. We know there are emerging economies that are, frankly, challenging some of our conventional wisdom about how to operate industry and so forth.

    A Canada that stands against this or that doesn't find a way to embrace this technology while providing an opportunity for artists: is that a Canada that's going to continue to lead the world in artistic expression in culture and in the exportation of culture? Because really, if you watched the Olympics, I think you saw that Canadian artists are really...this is a pretty strong time for Canada.

    I think the opportunities available to Canadians to export and get financial remuneration from our rich cultural heritage and tradition are so much greater in this online world because of the power of these tools to produce, promote, and distribute these products at a much lower cost. There are tons of upside for us.

    Thank you.

    Mr. Rodriguez, please

    Thank you, Mr. Chair.

    Mr. Glick, you said that, above all, we should not regulate, that Canadian culture was in a position to capitalize on this space, these new platforms and opportunities, that our artists and creators were doing well in this environment. How do you know they are doing well?

    If we look at some of the examples on YouTube, we can see that there are all sorts of Canadian artists who are succeeding--by running ads against their music videos, for example. There are Canadian artists who have started up with YouTube channels and that has then led to much broader distribution deals.

     I'm focused here on YouTube examples, but truly, in the digital world more broadly, there are Canadian artists who sell lots of music on iTunes. There are Canadian artists whose podcasts are some of the most listened to. There are Canadian bloggers who are some of the most popular bloggers in the world. All of these, to me, represent a form of Canadian success online.

    You are right. There are success stories we can talk about, but I am not convinced that mechanisms or measures justify saying that Canadians are really taking their place. That may be the case, but it may not be. I do not know.

    On another note, if we are talking about new media, it means that there are older forms of media, more conventional forms. Take television, for example. What is the future of conventional television? Not that long ago, conventional stations such as CTV had a lot more control. Someone who wanted to watch CTV at 6 p.m. knew that the news would be on at that time and that, at 7 p.m., something else would be on, and so forth. Now, thanks to the Internet, we can watch what we want when we want. So people in general are turning away from television. They are using the Internet more and more.

    What does the future hold for the CTVs and Globals of the world?

    If I knew that, I would play the stock market.

    Some hon. members: Oh, oh!

    Well, give it a shot. Try.

    Okay. This is really my own speculation. This is not something I come to from my job or from any position we have corporately. I certainly think that there is a future for broadcasting, but it is a future that probably doesn't look like “appointment TV“ looks today. It looks like a model that's focused on consumer choice at its heart.

    You've talked a little about how people can go online to watch what they want to watch, when they want to watch. That will be de rigueur. That will be, I think, the broadcasting experience. But again, that's a personal view, and I don't know precisely how that's going to play out in the long term, quite frankly.

    Okay, but we're not talking about the end of the CTVs and Globals of this world. They'll still have a future in a way, but we don't know exactly what it is.

    I think that's true for all broadcasting, not just CTV and Global.

    What's the impact of 3-D television?

    We have seen studies that say that 3D television is coming in the next few years. Like anything else, at first, it will be very expensive and not be very accessible to people. Studies show that a large number of homes will have 3D televisions in the next few years and that it requires a lot more bandwidth and space to broadcast 3D television signals than conventional ones, as we know them today.

    How do you think that will affect Google or the Internet industry?

     I think 3-D TV represents a tremendous opportunity for all sorts of players in this space, because it's cool and people are going to like it. It's going to be a new way of experiencing audiovisual content.

     It is going to take up a lot more bandwidth, as you rightly identified. I don't know about spectrum, but bandwidth, so one of the things we are going to need is a better, faster broadband infrastructure in our country in order to support 3-D television across the country.

    This is not just a 3-D TV issue, by the way, but we'll stick with the 3-D TV example. If you don't want to have a 3-D TV digital divide, that is, where people in Toronto, Montreal, and Ottawa get 3-D TV, but people in Rimouski and northern Manitoba don't, we're going to need to think about making sure that the communications infrastructure exists.

    Again, on some of the questions that other members have had about the role of government, I think there is a role for government to play in ensuring that we have the best broadband infrastructure in the world. That will act as the underlying network for all of these communication technologies that we've talked about. One of the implications of the virtuous hourglass is that if everything is being carried over the public Internet, we need a really, really fast, open, and reliable public Internet going everywhere.

    Thank you very much.

    Mr. Galipeau, please.

    Thank you, Mr. Chair.

    I used to be on TV Ontario's board of directors. I advocated charging a fee on the sale of magnetic tapes and video tapes in order to create a fund to help and promote Canadian culture and to support artists. At that time, my children were angry with me because I wanted to raise the price of magnetic and video tapes. They said it would never help artists because they were the ones who had to buy the magnetic and video tapes.

    Right now, I have trouble understanding how that access works. Obviously, I am from a different generation than my children. They are much smarter than I am. I have just started watching one of your products, YouTube, and I have noticed that many young artists, who could otherwise not afford to market their products, are showcasing their work on YouTube for free, and all of a sudden, they become successful because you helped them become known. What is the secret?

    There is another thing I have a really hard time understanding. You are a multi-billion dollar company, and yet I never give you a penny. All the benefits that I get from your services are free. I wish it were like that when I went shopping, but it is not. Explain that to me.

    This is a question that I get asked frequently: how does Google make money? The answer is advertising. It's very simple. When you do a search on Google, there are sponsored links on the side, and if somebody clicks on them--

    But the truth is that I don't even see them. I only see what I want to see.

    Well, then, I guess you're not making us any money.

    Some hon. members: Oh, oh!

    I work hard for the money I get. I try to keep it as long as I can.

    The answer is that when people click on those links, the advertisers pay for those clicks. There's an auction that is run every time somebody does a search and the ads are ranked based on an auction and their relevance. When people click on those ads--

    Mr. Royal Galipeau: Okay. It's only if--

    Mr. Jacob Glick: It's only if you click.

    Okay. So if I click on Robert Charlebois and listen to something he sings--by the way, it's not of very good quality--what I want to do after I've listened to it is buy his CD, which is of course of better quality.

    Sorry, but I'm not sure what you're describing--

    When I click on--

    Do you mean on YouTube?

    Yes. On YouTube, does somebody make money from my click?

    Mr. Jacob Glick: It depends--

    Mr. Royal Galipeau: But they're getting a raw deal, then.

     If you're clicking on an ad on YouTube--

    Mr. Royal Galipeau: Oh, okay.

    Mr. Jacob Glick: If you're clicking on an ad on YouTube, then somebody is making money--usually the artist and YouTube.

     When we're talking about monetization, there's no magic to it. I mean, this is a familiar business model to the content industry. It seems new, and we say “new media”, but ad-supported content is as old as the hills, right?

     What's new about it is that it's measurable and it can be targeted. It can put relevant ads in front of you. For example, if I am reading a magazine--and magazines are largely an ad-supported medium--and there's an ad for Lexus cars, well, that ad is irrelevant to me because I have a Honda and I'm not in the market for a car.

    Especially not for a Lexus.

    So why are they putting it in front of me? They're paying good money to that magazine to put that ad in front of somebody who really doesn't care to see it. Part of the opportunity online is to put relevant ads in front of people. This is what you're going to see, by the way.... I'm sure that you're all waiting with bated breath for the iPad to be released next month--

    The chair is going to cut me off in a minute--

    Mr. Jacob Glick: I'm sorry--

    You're going to be cut off right now anyway.

    If you want to, Mr. Glick, please finish.

    I apologize for waxing philosophic about iPads, but suffice it to say that you'll see online business models evolving for print media as well. So you will see relevant ads going into things like online magazines in devices like iPads. By the way, in case anyone thought I was here only to promote Google products, I can promote other companies' products--it's for equal opportunity.

    Now you've extended his time--my time.

    That's very good. Thank you.

    Ms. Leslie, you're back on again.

    You've talked about how there are infinite opportunities to access Canadian content. Do you have any thoughts on how we actually work--when I say “we”, I mean government--to promote this? Yes, it's infinite, but how do we make sure people are getting it and that our artists are being recognized, that our creators and innovators are being recognized?

    Also, you talked about dogmatics--the two dogmatic sides on this issue. I was wondering if you could forward to the clerk after the meeting any ideas for witnesses who aren't dogmatic, for people we might not normally look at or have considered and who could really shed some light on this for the committee.

    Sure. I'm happy to do that.

    On your other point about promoting Canadian content, I think one of the terrific things about this online universe, such as it is, is that any number of promotional vehicles are available at little or no cost that are just as effective as multi-million dollar ad campaigns.

    For example, that's how viral videos get popular. People post them to Twitter. They post them to their Facebook accounts. They send them to their friends.

     Combine that with a purposeful, targeted ad campaign, and for a very low investment of money up front, you can make content really--

    That's sort of from an entrepreneur's point of view. Is there a role for government in this?

    I hadn't thought of it that way, because I think of this from the user perspective. I'd have to give that some additional consideration.

     My instinct would be to recommend to government to think like the user. This is a user-driven world. These are user-driven technologies. To the extent that governments don't think like people, like their citizens, then they will miss it.

    Okay.

    I was wondering if you also had ideas about how we—again, “we” being government—can actually help—

    Who's the government?

    We in this room, working together collaboratively, I hope.

    How do we help Canadian industries deal with emerging media or take advantage of emerging media?

    I think there's an existing economic incentive to do it, which is that there's money to be made from it for creators and for innovators. You don't have to push people too hard to do it. they want to do it.

    I don't know...is that a dumb answer?

    No. We want to promote Canadian business and Canadian innovation. We want Canadian companies to be successful. Some of them don't naturally.... I come from an energy efficiency background. People don't necessarily invest in energy efficiency knowing that it'll save them money in the long run. Sometimes they need a little bit of help.

    Yes. This is a great question, because it's one of the paradoxes of the online landscape. If you look at what Canadians are doing online, you'll see that Canadians are using these technologies in droves. Canadians are some of the biggest adopters of online technology in the world. Canadian business has been a little more reticent.

    If you look at the e-commerce portals of various Canadian retailers, for example, you'll see that they are not as robust as their U.S. counterparts. Or if you look at the extent to which Canadian businesses are advertising online, you'll see that it is much less than what U.S. businesses do. But if this is where the eyeballs are, so to speak, I would expect that ultimately Canadian business would logically follow if we have a competitive landscape. It is definitely one of the biggest challenges as the economy and perceptions transition.

    I don't know what the role for government is, other than being a cheerleader, other than ensuring that the best possible infrastructure exists and that it's open so that therefore the opportunities are available to people. I think that's a very important role for government in this context.

    There's another thing that I would say for government, which I think goes to your question and the questions of other members earlier, that is, what should Canada's digital strategy be? Obviously it has to include broadband and has to include copyright. It should also include--and I don't know if members of this committee have considered this previously--open data. It should include making those vast amounts of government data that are sitting on a shelf somewhere broadly available to entrepreneurs and to the public, to mash up, to create...to use as a platform for their own innovations. You've already seen this a little bit in Vancouver, with the open—

    [Inaudible--Editor]...brought this up last year.

    Okay. All right, then, they—

    No, but the Vancouver example--

    That's right. Vancouver, Edmonton, and Toronto are all doing this. It's all happening at the municipal level. Where's “data.gc.ca”? That's my question for today.

    Thank you.

    Thank you for the question.

    We'll now move on to Mr. Garneau, please.

    Thank you, Mr. Chair.

    My question is very broad. I apologize if it has been asked in some form; I came late to the meeting.

    There is certainly a fairly large consensus out there that people who produce copyright should receive compensation for it--that their copyright should not be infringed. Various solutions have been advanced by different groups as to how one can compensate people for their copyright, but I'd like to have your opinion.

    Do you have a magic bullet here for the creators of copyright in the context of the copyright law and other regulations that would solve our problem and that would be technologically neutral?

    The short answer is no, and I would be skeptical of anyone who tells you otherwise. The truth is that any country in the world that has attempted this, even with some of the most draconian regulations, or something slightly short of draconian, has failed to solve the problem. Ultimately, I think we have to find all sorts of new business opportunities for creators online, and the kind of mix of those things will provide ample opportunities for remuneration.

    By the way, I agree with the premise, which is to say that people who create things need to get paid for those things, and that is how a cultural economy thrives. I agree with that. That's why, again, we talked a little bit about the advertising model, but there are also subscription models and pay-for-download models. All of those, I think, will work in different contexts, some in others.... I don't know yet of a magic bullet that's been created to stop piracy--and by the way, in the online or the offline world.

    Thank you. I sort of expected that there wasn't this magic solution.

    You've mentioned that countries have tried different things. Are there any that you think are promising or that go partway in addressing this issue? Are there any that you'd care to talk about that you think might be promising?

    Well, we talked a little bit before about the Canadian notice-and-notice system. I think that strikes the right balance between user rights and free expression and trying to prevent infringement. You could also look at the Chilean judicial notice and takedown system. It differentiates itself from the U.S. notice and takedown system.

    I should add that I put this caveat in when I discuss notice and takedown, which is to say.... No, never mind: I will not add my caveat. I will say only that the Chilean judicial notice and takedown system adds a level of judicial oversight to the notice and takedown regime, which ensures some additional fairness, so that you don't get a takedown merely on a lawyer's letter or allegation. In the notice and takedown context, you get effectively the power of an injunction, which is an extreme judicial remedy merely on a letter. In the Chilean system, there is judicial oversight to that.

    You could look at a hybrid model like that, but I think there's a lot of reason to think that the notice-and-notice system is one that has broad acceptance in the Canadian context among various stakeholders and is effective.

    Thank you.

    Thank you.

    Ms. Gordon, please.

    Thank you, Mr. Chair.

    Welcome. I am here this afternoon to replace someone. This is not usually my committee, but I certainly feel very fortunate to have the opportunity to be here as you're doing your presentation.

     As you probably will realize, I'm not up to par with all these technology changes, but I certainly know that we are going through challenging and changing times. In reading some of the statistics here, I was noticing the fact that the new statistics show that the youth of today spend 18.5 hours online in comparison to watching 16 hours of television.

    That's every week.

    Yes. That's weekly.

    How do you think this has changed and how will it affect traditional programming and broadcasting? Do you think there's anything to be cautious of as a result of that?

    Well, in a way, the Internet has been able to do what generations of parents and teachers could not do, which is to get kids to watch less TV.

    Some hon. members: Oh, oh!

    Yes, we are accomplishing that, but....

    We're jumping from the frying pan to the fire.

    De Charybde en Scylla.

    I think a lot of what's happening online is really exciting. It allows kids to engage in communities in what's sometimes called a lean-forward medium, instead of a lean-back medium; it's interactive, collaborative, and community based. Of course, nothing can replace going out and playing and hanging out with friends, so I'm not saying that anyone should spend all their time online or watching TV.

    Coming from a background as a school teacher, I know that it's probably good that they're not watching TV, but going onto the Internet is not much more of an example, whereas, like you've said, being outside playing, enjoying fresh air and meeting with their friends is. But it is happening and I suppose it is changing us and causing us to be away from television.

    The other question was this: do you believe there are any policies that we should be developing surrounding content on the Internet?

    What in particular are you thinking about?

    Do you think there's anything more we should be covering that we may not be covering or that we're pretty well covering everything?

    I think it's important to prevent online the same things that are illegal and objectionable offline. We need to ensure that we have strong measures online to prevent piracy, child exploitation imagery, and hate speech and defamation, the things that in Canadian society generally are inappropriate or illegal content. We need to find legal mechanisms to ensure that we address those issues online, too.

    The precise legal mechanisms will vary depending on the issue and that's a much longer discussion. But at the level of general principle, I don't think the Internet should be a free-for-all.

    Oh, no. Because I think there are things that we have to be cautious of as well when we're online--

    Absolutely.

    I have something else that goes to your point. You mentioned that you were an educator before being a parliamentarian. I think a really important point to make to parliamentarians and educators is on the importance of digital literacy in this environment. That is to say, for many years in schools as part of the curriculum, we taught kids how to watch TV in a smart way or how to read newspapers in a smart way, right? We hope we did that.

     We need to give them those same skills for the online world. We need to give them the skills for how to differentiate between a site that has legitimate information and a site that has bull and for how to stay safe online. For all of the components of just experiencing life online, they need those same literacy skills. So again, for the question on what is part of a national digital strategy, digital literacy, in my view, is a critical component of a national digital strategy.

    Thank you.

    Thank you.

    With that, as chair, I'd just like to thank you so much for your presentation today.

    Just to let you know, you mentioned one of my constituents in one of your answers, a guy by the name of Justin Bieber. I must say that I have belonged to the Stratford Agricultural Society for quite a number of years, and this young lad, years ago, would start off our fair. He'd be there playing and all the young girls and other young people were around. Just a couple of years after us watching him open the fair, suddenly everyone around the world knows who Justin Bieber is, just like overnight.

    An hon. member: [Inaudible--Editor]

    The Chair: Pardon?

    Just like you, Mr. Chair, you know, women around you, and the world knowing who you are....

    Some hon. members: Oh, oh!

    I'm trying to associate myself with Mr. Bieber so that I might get better known.

    But I can say, again, that it's about how the network works. Like many of us around this table who are not quite.... I'm trying. I have grandkids who can tell me how to run things better, but I'm learning, and one day I'll be as smart as my grandkids.

    Thank you so much for being here today.

    Thank you, Mr. Chair.

    Thanks for the great questions.

    The meeting is adjourned.