New web site seeks Copyright Board approval to launch iCraveTV-like service

A new Internet TV signal retransmitter is poised to start distributing over-the-air broadcast signals, but first, it wants the Copyright Board to set an interim tariff for its content. JumpTV, which has a web site under construction at www.jumptv.com, is trying to avoid the copyright clash that plagued iCraveTV (CCR, Dec. 22/99). Like iCrave, JumpTV is taking advantage of a 1999 CRTC decision that may inadvertently, allow companies to retransmit local television signals over the Internet. The preferential practice – detailed in the Copyright Act – was intended to be a narrow exception that grandfathered cable TV operators from seeking permission to use local broadcast signals. The question for the Copyright Board will be to decide whether Internet broadcasters fall into the same category as other broadcast distributors. JumpTV, through a numbered company, is asking the board to establish a new tariff for Internet retransmissions. Company president, Farrel Miller, was not available for comment, but an employee with the firm told CCR that JumpTV may go live on the web this fall, "by January, at the latest." The company is selling banner ads through 24/7 Canada Inc, a Toronto-based advertising agency that specializes in online sales. JumpTV is objecting to the retransmission tariff that has been set for the next two years because its terms do not deal with retransmissions over the Internet. In an August 30 letter to the Copyright Board, lawyer Sunny Handa of the Montreal firm Fasken Martineau DuMoulin LLP, acting for 2000051 Ontario Ltd – the company that is applying to the board for a tariff on behalf of JumpTV – says Internet retransmissions "falls squarely within the terms of section 31 of the Copyright Act." When contacted by CCR, Handa said he was not at liberty to reveal who his client is or details of its plans for retransmission. CCR later discovered that the client is JumpTV. Handa’s client argues that the model used by the Copyright Board to calculate royalties in the proposed retransmission tariff is not appropriate for Internet retransmission. "(The company) does not plan to have subscribers or to charge viewers to access the retransmitted broadcast signals," the petition notes. "The basis of the retransmission royalty applicable to cable and satellite retransmitters is the number of premises which receive distant signals on the last day of each month. "This calculation model assumes that the retransmitter will have fixed subscriber relationships with each premises receiving a distant signal, and is not easily reconciled with a non-subscription advertising model in which individual users connect to a generally available service. Indeed, an Internet transmitter could theoretically avoid payment of any retransmission royalties under the tariff proposed for 2001-2003 simply by refusing to retransmit any distant signals on the last day of each month," the numbered company writes. JumpTV’s appeal to the Copyright Board comes just eight months after some of North America’s largest broadcasters teamed up to shut down iCraveTv. The Internet company shook the broadcast industry last November when it began streaming 17 Canadian and U.S. television stations without the consent of the station owners or a tariff from the Copyright Board. Like JumpTV, it used banner advertising to frame a streamed retransmission. Cable and DTH operators currently pay about 2.5 per cent under the retransmission tariff. JumpTV is proposing two other options. The first is to use a percentage of revenue format like SOCAN’s Tariff 2.A for conventional television. JumpTV is recommending a 2.5 per cent take - a ‘proxy’ of the percentage of revenue paid by cable and DTH operators under the tariff. Alternatively, the board could peg the tariff at a level consistent with the company’s maximum number of simultaneous users - somewhere between 4,000 and 6,000. If the Board accepts that argument, the applicant recommends a royalty rate equal to one-half of the rates set out in the proposed 2001-2003 tariff. Uncertainty in a new market, argues the company, should justify a 50 per cent cut. "Just as the number of subscribers to a cable television service sets the maximum possible exploitation of retransmitted signals at any particular time, so too does the maximum number of simultaneous users of an Internet set the maximum possible exploitation of retransmitted signals at any particular time," the company writes. It adds that the reduced rate reflects "the uncertainty concerning potential revenues in an unknown and untried market for Internet retransmission services."

New web site seeks Copyright Board approval to launch iCraveTV-like service

Broadcast | September 14, 2000

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