Aliant Telecom to seek experimental retransmission licence as C-11 clock ticks

The Senate Standing Committee on Social Affairs, Science and Technology took a scant hour-and-a-half on December 5 to recommend passage of Bill C-11 (formerly Bill C-48) without delay in the upper house. The recommendation comes despite a plea by Aliant Telecom Inc. to delay passage of the controversial legislation that will deny companies operating under the CRTC's New Media Exemption Order a compulsory licence to retransmit over-the-air television signals via the Internet. On December 9, the bill passed third reading without amendment.The legislation could render Aliant's new TV on my PC service on the wrong side of copyright law, though it's not certain that it will need to be immediately shut down following Royal Assent of the bill, which will likely come by the end of the year. It still remains for Canadian Heritage minister Sheila Copps and her Cabinet colleagues to proclaim the bill into law - a delay in which Aliant will certainly be lobbying hard for in the coming days. Cabinet could delay proclaiming the bill into law for several weeks or months, it could proclaim the bill into law effective on a given date several months into next year, or it could immediately proclaim the bill into law as broadcasters and copyright owners are requesting.Aliant had asked the committee to delay the bill's coming-into-force date until June 1, 2003 to give its Internet retransmission service a chance to re-establish the statutory basis on which it operates. In order to offer subscribers six over-the-air TV signals in conjunction with the four specialty TV channels for which it has negotiated rights, Aliant is depending on the protection of section 31 of the Copyright Act, which provides for a compulsory licence subject to tariff payments.Aliant is currently the only company operating such a service in the grey area of copyright law where both ICraveTV.com Inc. and JumpTV.com Canada Inc. had hoped to take advantage of an apparent loophole in the Copyright Act. Under section 31 of the Act, companies are permitted to retransmit over-the-air TV signals without the permission of copyright holders so long as their activities are lawful under the Broadcasting Act. By the provisions of the 1999 New Media Exemption Order, companies broadcasting on the web were forborne from regulation and the need for licensing, creating the loophole that legislators have tried to close with Bill C-11 (CNM, Dec. 13/01).The matter is also before the CRTC, which has been ordered to report its findings to Cabinet by January 17 (CNM, May 31/02). Several options remain open to the CRTC to allow some forms of Internet retransmission, including creating a new class of broadcast distribution undertaking (BDU) that would be allowed to take advantage of compulsory licensing, providing companies with an alternative to operating pursuant to the exemption order. This is the most likely route being pursued by Aliant, but time is not on the telco's side.Susan Harley, Aliant's director of broadband, told the Senate committee that the withdrawal of section 31 protection would shut down the multi-million dollar service, and harm the company's credibility in the marketplace. "It puts a question in (the subscriber's) mind: can you deliver the services you say you will?" Harley said.The service, which is not yet being heavily marketed, offers Aliant's high-speed Internet subscribers 10 television channels for $9.95 per month. So far, Harley told the committee, there are about 100 households signed up, and the company is further testing the service to ensure it will work when the number of subscribers reaches into the thousands. At the committee hearing, Harley stressed Aliant's view that the service is a complement to cable and satellite television, not a replacement, and that it is a secure distribution system that doesn't use the world wide web.But, she noted, Bill C-48 caught the telco off guard last May with the House of Commons' clear intention to outlaw non-consensual Internet retransmission. Now it faces having to shut down the service unless it can wriggle some compromise from the CRTC by the time the law comes into effect. "We're looking for time," she told the committee.Asked by committee chair Michael Kirby why Aliant needs a compulsory licence when it could reach agreements with over-the-air broadcasters as it did with the specialty channels it carries, Harley said the solution is impractical. "There are so many rights-holders you would need a cast of hundreds to do that."At the same hearing, however, broadcasters and their copyright allies were adamant that the legislation finish wending its way through Parliament quickly. The CRTC deadline to report was top-of-mind for several witnesses, such as the Canadian Motion Picture Distributors Association's VP Susan Peacock. "It is essential that Bill C-11 be enacted before January 17…so that (the commission's) conclusions can be made in a stable copyright environment."Senator Kirby agreed. "This is an obvious loophole that had to be closed," he said.Support for the bill was also expressed by Paul Spurgeon, general counsel for the Society of Composers, Authors and Music Publishers of Canada (SOCAN), though he stopped short of asking for immediate passage. Rather, Spurgeon called on the Senate to delay passage of the bill citing a concern that Parliament would not have the opportunity to scrutinize regulations defining the legislation. Much as JumpTV argued during the process of drafting the original Bill C-48, SOCAN argued that without regulations in place during passage, Parliament's right to scrutinize legislation is being co-opted. "C-11 is too important, perhaps, to be rushed through the Senate through the Christmas rush," Spurgeon argued.While Kirby was sympathetic, he said there is ample precedent for the passage of enabling legislation. But he did make a commitment to write to Copps to ask that draft regulations prescribed by the bill be brought to the committee for review.It's not clear, however, that any regulations will be drafted pertaining to the bill. Clauses in the bill that give Cabinet the authority to write regulations on Internet retransmission were drafted before the Standing Committee on Canadian Heritage substantially changed the draft bill to deny exemption-order-related Internet retransmission. Bill C-11, in its current form, remains a mish-mash of earlier drafts and revisions.Asked by Canadian NEW MEDIA what Aliant's next step will be given that quick passage of the bill seemed assured, Harley would only say that the company will "reassess" the TV on my PC service, though it has been indicated that a request by the company to the CRTC for an experimental licence could be forthcoming within a matter of weeks. Harley would not comment on the exact nature of that request, but confirmed that an experimental classification as a new form of broadcast distribution undertaking is one likely route.Erica Redler, senior VP of legal affairs for the Canadian Association of Broadcasters, tells CNM that while the association recognizes speedy passage of the bill could shutter the nascent Aliant service, rights-holders have less than complete sympathy for the telco. Redler indicates that the service was launched after passage of Bill C-48 in the House and that it's unlikely the offering is a small experiment confined to Atlantic Canada. She noted the presence of Bell Canada counsel Suzanne Morin at the Senate hearing and frequent consultations between the Bell lawyer and Harley, adding that the TV on my PC service is likely being eyed by BCE Inc. for broader rollout.

Aliant Telecom to seek experimental retransmission licence as C-11 clock ticks

Broadcast | 12/11/2002 5:00 am EST

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