Industry stakeholders wrangle over draft regulations for Internet retransmitters

Little to no consensus on Internet retransmission has emerged even in the wake of a compromise draft position put forward by the federal government. On March 19, the departments of Canadian Heritage and Industry Canada circulated a consultation document to industry stakeholders for feedback, titled Retransmission Conditions Regulations, which spells out several options for defining Bill C-48, the government bill to amend the retransmission section (Section 31) of the Copyright Act. The consultation document, obtained by CCR, proposes a new category of new media retransmitter, which would only be allowed to transmit in Canada and would be subject to stringent conditions on monitoring and quickly ending unauthorized reception of signals outside the country (CCR Update, March 20/02). Interested parties – including associations representing producers, broadcasters, cablecos, Internet providers, as well as JumpTV.com Canada Inc. – met on March 22 to discuss the draft regulations. JumpTV and the Canadian Association of Broadcasters (CAB) find themselves at polar opposites on the issue, while the other players appear to welcome the proposals, which would allow Internet retransmission while enforcing strict measures to keep signal leakage to a reasonable minimum. JumpTV, however, opposes the inclusion in the consultation document of territorial restrictions on new media retransmitters that won’t apply to cable and satellite TV operators. On the other hand, the CAB contends that the government is falling short on its pledge to close Internet technology altogether to what it considers to be a loophole in Section 31. "…The regulations outlined last week do not address the minister of Canadian Heritage’s clear intention to close the loophole," says CAB president and CEO Glenn O’Farrell. "The departments of Industry and Canadian Heritage are trying to find a balance where there is no balance and these regulations do not achieve that. The majority of the stakeholders who attended the consultation agree with the CAB that these regulations pander to the Internet renegades, who poise themselves as new technology entrepreneurs. We need to remember that innovation cannot be based on theft." At the CAB conference in Ottawa last October, Canadian Heritage minister Sheila Copps and then-Industry minister Brian Tobin pledged to amend the Copyright Act to close the retransmission regime to Internet services. In comments at the time, Copps referred to Internet retransmitters as "pirates" (CCR Update, Oct. 29/01). Bill C-48, which would clarify the legal issues surrounding Internet retransmission, passed second reading in the House of Commons in February and will move to debate by the Standing Committee on Canadian Heritage once draft regulations to accompany the bill are finalized. JumpTV lawyer Sunny Handa says the proposed regulations fall short because they put much more onus on Internet retransmitters to control signal leakage than other distributors. "It looks like they are building such a complicated regime with so many different players all being addressed differently that they are going to end up building so much complexity that’s unnecessary into the system," Handa tells CCR. "I can take a cable signal into my computer at home and digitize it and retransmit that signal out there. Does the cable company expect to be liable in those cases? Probably not. Yet, those are the sorts of restrictions that are being imposed on new media retransmitters. So I think what we are looking for is a fair playing field." Occupying middle ground on the consultation document are the Canadian Film and Television Production Association (CFTPA), the Canadian Cable Television Association (CCTA), and the Canadian Association of Internet Providers (CAIP). "I don’t want to say that there weren’t divergent points of view, because they were certainly expressed. As the politicians say, it was a blunt and open exchange of views," Stephen Stohn, chair of the CFTPA’s copyright and international policy committee, says of the March 22 meeting. The CFTPA has moved on its position from one of a complete ban on Internet retransmission, as is the case in the United States, to a more open one of embracing the technology but under the right conditions. "In the end, we want our product on the Internet. That’s the business of the future – getting our product into the hands of the consumers and it’s going to be through the Internet one way or another," Stohn says. "So we want to promote these kinds of technologies and even promote JumpTV – not the JumpTV take-if-off-the-air-for-free technology, but putting it out there with our consent and marketing it to the consumers." The consultation document also proposes that banner advertising be prohibited for all retransmitters. This provision provides solace to Stohn. "Because if people aren’t going on an advertising model, they basically need to be going on a subscription model and that’s a lot more comforting," he says. Cable and satellite TV operators, he points out, operate on subscription models with contractual relationships with their customers. CAIP president Jay Thomson, who foresees "a lot of battling to come", doesn’t have a problem with the territorial restrictions, but is against the ban on banner advertising. "From our point of view, our concern was that the legislation should be technologically neutral and not create a barrier to the use of innovative technology by cable companies and I think it actually achieved that," comments CCTA counsel Jay Kerr-Wilson. He says the CCTA also has no problems with the imposition of territorial restrictions since cable by its nature isn’t received outside of Canada, and sees logic in the call for continual monitoring of signals. "…If you don’t have a secure product, the (system) is going to be threatened. Not just your business, but the businesses of the broadcasters and the rights-holders and other BDUs," he points out. But O’Farrell says it is more than a question of just restricting signals to Canada. "It goes well beyond the territorial issue," he tells CCR. "It goes to the fact that if they are going to, for all intents and purposes, be acting in a way that a broadcasting distribution undertaking (does) – i.e. cable or satellite – there are numerous requirements, obligations and contributions that they have to make back to the system that flow from the regulatory regime. And it’s not appropriate, we think, for somebody else to come into that business and not have similar sets of requirements and obligations." Nor surprisingly, Handa sees things in a different light. He says the government is wrongly trying to use copyright laws to impose broadcasting regulations on the Internet. "…They’re sort of convoluting copyright and broadcasting policy all together," he says. "Copyright is about copyright. It’s not about broadcasting policy. If you want to deal with broadcasting policy, if you want to subject us to different broadcasting rules, do that under the Broadcasting Act and under the CRTC’s regulating authority and abilities. Do not do it under the Copyright Act." Handa contends that the government is trying to use copyright regulations to make JumpTV "comply in a way with regulations that even the CRTC is not making us comply with." Despite the differences, Stohn remains optimistic of a satisfactory conclusion. He likes the "general direction" of the draft and congratulates the government for its work. Following the March 22 meeting, all sides are preparing suggested changes to the draft document and are set to meet again in mid-April. A revised draft document, if the parties reach agreement, would likely be forwarded to the Canadian Heritage standing committee for debate.

Industry stakeholders wrangle over draft regulations for Internet retransmitters

Broadcast | March 28, 2002

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