The proceeding that no one wanted?

Broadcasting Public Notice CRTC 2002-38, Call for comments concerning Internet Retransmission (Order in Council P.C. 2002-1043) is, arguably, a proceeding that no one ever wanted – least of all the CRTC. The proceeding, which the CRTC is required to conduct in response to Cabinet’s request, seeks comment regarding the broadcasting regulatory framework for Internet retransmission of over-the-air television and radio signals. This issue has come home to roost for the commission, which first decided to exempt the Internet from regulation under the Broadcasting Act in its Report on New Media, and New Media Exemption Order, both issued in 1999. The New Media Exemption Order, which applies to Internet retransmitters, was issued mere weeks after CEOs of Canadian broadcasters began receiving congratulatory faxes from iCraveTV announcing that their signals were now available over the Internet. In practical terms, however, Internet retransmitters had still to deal with the copyright implications of their transmissions. The Copyright Act contains a compulsory licence permitting "retransmitters" to retransmit conventional television signals provided such retransmission is, among other things, lawful under the Broadcasting Act. The New Media Exemption Order permitted Internet retransmitters to meet this requirement. What remained to be decided, however, was whether Internet-based companies could meet the remaining conditions of the Copyright Act’s compulsory licence. The answer to this question has since been sought in venues ranging from the courts, to the Copyright Board, to the Heritage Committee and finally the House of Commons. The answer: Bill C-48, as passed by the House of Commons in the spring, has unequivocally determined that "new media retransmitters" cannot take advantage of the compulsory licence. So how does one explain the current proceeding? Well, Bill C-48 wasn’t quite what ministers Copps and Rock had ultimately proposed as a resolution to what had developed into a stand-off regarding this issue. In fact, the ministers had arrived at an interim solution consisting of a two-pronged approach. The first prong was the amendment of the Copyright Act in a manner that would put off to another date resolution of the thornier issues surrounding qualifying conditions for Internet retransmission. In the meantime, as a second prong, Cabinet would issue an order in council to the CRTC, in essence, putting it back to the commission to recommend a way of dealing with the impasse that had developed over questions such as the ability of Internet retransmitters to advertise on their sites. This approach implicitly reflected the view that the controversy over Internet retransmission might have more to do with regulatory issues than with copyright. Ultimately, Bill C-48 as passed by the House bears little resemblance to the ministers’ proposed amendments to the Copyright Act; yet somehow the second prong of the ministers’ two-pronged strategy survived, and the Order in Council was issued despite the Bill. That is how the CRTC now finds itself the reluctant foster parent of an orphaned Order in Council. The commission has essentially three options for a recommendation in the upcoming proceeding. The first is to leave the New Media Exemption Order intact; the second is to design a new exemption order specific to Internet retransmittters, as opposed to transmitters; and the third is to embark on some form of licensing of Internet retransmitters. Ironically, what may determine the commission’s choice among its options is the language of Bill C-48 itself. The amendments to the Copyright Act, which foreclose access to the compulsory licence to "new media retransmitters", define these as "persons whose retransmission is lawful under the Broadcasting Act only by reason of the Exemption order for New Media Broadcasting Undertakings …" (emphasis added). Therefore, whereas the New Media Exemption Order previously had opened the door to the question of whether Internet retransmitters could take advantage of the compulsory licence, the status quo, as represented by the New Media Exemption Order, now emphatically slams the door shut. This reversal may result in the creation of some strange bedfellows in the upcoming proceeding. Parties who have all along lamented the opportunity created for Internet retransmitters by the unconditional nature of the New Media Exemption Order may now wholeheartedly support its continuation in its present form, in order not to upset the status quo as reflected in Bill C-48. It is more difficult to predict what proponents of Internet retranmission will be arguing for, however. In light of the language now contained in the Copyright Act, might they now find themselves arguing, paradoxically, for greater regulation of Internet-based retransmission, in an attempt to get out from under the Copyright Act’s definition of "new media retransmitter"? What is less likely to be fully developed on the record of the proceeding is evidence and arguments that go to the core of the commission’s jurisdiction: What type of threat does this type of retransmission, if left unregulated, represent to the Canadian broadcasting policy and would regulation of Internet retransmitters contribute materially to achieving that objective? The clear exclusion of Internet-based retransmitters from the Copyright Act’s compulsory licensing regime may ultimately render these questions, and this proceeding, moot. Michael Koch is a member of the broadcasting, telecommunications and new media practice group at law firm Goodmans LLP.

The proceeding that no one wanted?

Broadcast | September 6, 2002

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