Door open to Internet retransmitters in section 31 legislation tabled Dec. 12

New legislation amending Canada’s retransmission laws tabled on December 12 has opened the door for JumpTV.com Canada Inc. and other Internet companies to become licensed counterparts to satellite TV and cable operators. The legislation, Bill C-48, entrenches the right of cable and satellite companies to re-transmit over-the-air signals without seeking the authorization of broadcasters or content producers. The law will also give Cabinet the right to create regulations outlining the conditions others must meet to take advantage of that same compulsory protection, including Internet firms. Despite a low-key media release applauding the bill issued by an umbrella organization of producers and broadcasters, it’s apparent the ministers of Canadian Heritage and Industry Canada have fallen well short of their October promise to close the loophole against companies such as Jump and ICraveTV.com (CNM Special Update, Oct. 29/01). Observers caution, however, that the real meat of the debate won’t be decided until regulations governing retransmission are hammered out in the next three or four months. The broadcast industry and content producers tried hard in the hours following the tabling of C-48 to put a positive spin on the development, though the rhetoric issued by the Media Content Coalition appears at odds with the wording of the actual legislation. While JumpTV opponents are painting the bill as ironclad protection that gives them the right to authorize or not Internet retransmissions of their streams, the bill is worded to specifically give Internet and other new classes of retransmitters the same compulsory protection enjoyed by traditional television sources. The Canadian Association of Broadcasters, as it often does in the wake of poor news, refused comment, and the Canadian Film and Television Production Association (CFTPA) would speak only briefly with Canadian NEW MEDIA. In her comments, CFTPA president/CEO Elizabeth McDonald reads new rights into the bill. "I don’t think (the government) has put off the hard decisions. There are regulations to deal with and that’s all part of the process. But, we’ve made an important step forward… We’re finally moving ahead in a substantive way to address the grey issues in the Copyright Act," she says. "If JumpTV were to re-constitute itself, it would have to do so in some way that would compensate the rights-holders in an appropriate manner." When it’s pointed out that JumpTV has said it would pay the appropriate fees since day one, and that this bill would entrench the status quo of a year ago, McDonald differs. "They were saying they would pay retransmission fees, which are different." However, a legislative summary contained within the bill states the opposite. In full, it reads: "This enactment amends the Copyright Act to provide that retransmitters who currently benefit from the compulsory licence regime provided for by section 31 (such as cable distribution undertakings and direct-to-home satellite distribution undertakings) will continue to do so, while allowing other retransmitters who meet the conditions prescribed by regulation to also benefit from that regime." Michael Geist, an Internet law expert at the University of Ottawa, says the legislation is still vague and doesn’t yet cut JumpTV and others out of the retransmission regime. "There’s certainly the potential for it to do what (broadcasters and content producers) hoped it would do, but my read of it is that the government has largely punted, and put off for another day the very contentious issue of under what circumstances can Internet retransmitters retransmit. "Part of this may be a function of timing, the need to move quickly and essentially comply with the promises that the two ministers made back at the end of October to come up with something by year-end. I think the reality that there is not complete agreement on how to move forward with this issue – in fact I think this issue is very divisive – and so, ultimately they have put in place the framework that will allow them to address this issue, but I don’t know that they’ve necessarily addressed the issue itself." The change will be accomplished by a straightforward wording change in section 31 to replace wording all agree is too vague. Where the original Act defines only what a retransmitter is not, the new wording gives the Governor in Council the right to prescribe conditions for retransmissions. Still, observers on all sides agree that Internet retransmission isn’t yet out of hot water. The Canadian Association of Internet Providers’ (CAIP) Jay Thomson, Geist, and the Canadian Cable Television Association’s (CCTA) Jay Kerr-Wilson have all indicated to CNM that regulations might yet be created that pull the floor from beneath JumpTV’s business plans. The regulations are almost certain to contain conditions pertaining to territorial protections and could prescribe conditions relating to advertising or other presentation elements that might make Internet retransmission impossible. CAIP president Thomson tells CNM: "The real test will be in the drafting of the regulations and the conditions that are established in the regulations for a new entity to be able to use the compulsory licence. Hopefully, those regulations will be flexible enough to allow for new business models, not just when regulations are passed, but in years to come when new types of services, that we have no idea about right now, may be available. "There are certain principles that need to be respected in order to recognize the rights that producers have, but at the same time, we shouldn’t hamstring innovation by restricting the kind of business model that could be created. One of the concerns is that the regulations could require the service to be a subscription-based service, which would preclude the opportunity to generate revenues through another means such as advertising." CCTA president/CEO Janet Yale echoes the need to be flexible on the regulations while applauding the legislation. "We’re extremely pleased that the government is moving quickly on this issue and acting in a way that ensures copyright holders are protected, while not inhibiting innovative uses of new technologies like the Internet," she tells CNM. On behalf of JumpTV, lawyer Sunny Handa expressed relief that new regulations will be adopted at the same time as the bill. He had been concerned that C-48 would be adopted without the regulations in place, a situation that would put the ministers in charge of defining retransmitters by fiat and without Parliamentary oversight. Copps, in particular, has used very strong language in public statements on JumpTV, calling Internet retransmitters "pirates" on more than one occasion. "Everything that’s been discussed to date in this entire debate, we have so far been comfortable as being able to satisfy," Handa tells CNM. "Not just border control, but other things as well. Unless someone has thrown in a curve ball, something that has not been discussed at all, we’re pretty confident we’ll be able to benefit from the regulations that come out."

Door open to Internet retransmitters in section 31 legislation tabled Dec. 12

Broadcast | December 13, 2001

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