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COPYRIGHT REFORM PROCESS

SUBMISSIONS RECEIVED REGARDING THE CONSULTATION PAPERS


Documents received have been posted in the official language in which they were submitted. All are posted as received by the departments, however all address information has been removed.

Submission from JumpTV received on September 13, 2001 via e-mail

Subject: Jump TV submission

JumpTV.com Canada Inc.
Retransmission 2001-2003 (JumpTV)
Response to the Consultation Paper on the Application of the Copyright Act’s Compulsory Retransmission Licence to the Internet Issued on 22 June, 2001 by the Departments of Canadian Heritage and Industry

PDF Version

Dr. Sunny Handa

(of the Ontario Bar)

Direct Dial: (514) 397-4321

shanda@mtl.fasken.com

Assistant: Carole Essiembre

Direct Line: (514) 397-7440

cessiembre@mtl.fasken.com

 

 

September 13, 2001

 

copy by e-mail

original to follow

 

Comments – Government of Canada Copyright Reform

c/o Intellectual Property Policy Directorate

Industry Canada

235 Queen Street

5th Floor West

Ottawa, Ontario

K1A OH5

Re: JumpTV.com Canada Inc.

Retransmission 2001-2003 (JumpTV)

Response to the Consultation Paper on the Application of the

Copyright Act’s Compulsory Retransmission Licence to the Internet

Issued on 22 June, 2001 by the Departments of Canadian Heritage

and Industry

Dear Madam/Sir:

We are writing to you on behalf of our client, JumpTV.com Canada Inc. ("JumpTV").

1. Introduction *

2. The Compulsory Retransmission Licence *

3. Views in Support of the Compulsory Licensing of Internet-based Retransmission *

4. Concerns Raised by the Compulsory Licensing of Internet-based

Retransmission *

4.1 Global Reach of the Internet *

4.2 Possible Undue "Extension" of a Limited Exception into a New Market *

4.3 Lack of Comparable Broadcasting Regulatory Obligations and Restrictions *

4.4 Lack of Comparable Investment *

5. Principles and Options *

5.1 Principles *

5.2 Options for a Government Response *

6. An Internet Exclusion *

7. A Technology-Neutral Licence Subject to Territorial and other Possible Restrictions *

7.1 Scope of the Licence *

7.2 A Territorial Restriction *

a) An absolute or qualified restriction *

b) Entities subject to a qualified restriction *

c) Elements of a qualified territorial restriction *

7.3 Banner Advertising *

7.4 Unauthorized Retransmission by Authorized Users *

8. Conclusion *

  1. Introduction
  2. We are writing to you on behalf of our client, JumpTV.com Canada Inc. ("JumpTV") in response to the Consultation Paper on the Application of the Copyright Act’s Compulsory Retransmission License to the Internet (the "Paper").

    JumpTV wishes to first respectfully convey its disappointment at the timing of this consultation process. The initiation of the consultation process by the Departments of Canadian Heritage and Industry ("the Departments") occurred in the midst of procedures involving JumpTV’s application for Internet retransmission under Section 31 of the Copyright Act.

    In response to an indication by the Departments that they were studying "options" for "possible" changes to the retransmission regime, Mr. David Kent in a letter dated May 29, 2001, on behalf of the CAB, CRBA, CRC and the CCC, requested an indefinite suspension of Copyright Board proceedings in the JumpTV matter. Fortunately, the Copyright Board denied that request. Nonetheless, the incident is indicative of the negative effect that the consultation process has had on JumpTV’s application.

    Although JumpTV is in agreement with a number of policies and objectives outlined in the Consultation Paper, it does take exception with respect to a number of the Departments’ affirmations. Accordingly, JumpTV makes the following comments in order to explain and make explicit the manner in which it agrees or disagrees with various elements of the Consultation Paper.

    The layout of this response follows for the most part that of the Consultation Paper.

  3. The Compulsory Retransmission Licence
  4. The Departments make reference to the technology-neutral communication right (and hence retransmission liability) and the compulsory licensing regime (the "Licence") that accompanies it. While the Departments outline throughout the Paper various arguments for technology-specific exclusion from the Licence, in particular with respect to Internet-based retransmitters, in almost all cases a technology-neutral solution is urged. For reasons of fairness and equity, the latter should clearly be the favoured course of action. The Government should under no circumstances introduce the arbitrary bias that would result from a technology-specific approach to the Licence. Moreover, a technology-specific solution would only serve to complicate the administration of the Licence and the development of new business opportunities in the future. The logical result would be a series of consultation processes followed by legislative amendments in response to each and every novel retransmi ssion technology.

    As the Departments note, BDUs (currently cable, DTH satellite and multipoint wireless systems) play a vital role in ensuring access to a wide range of over-the-air signals to Canadians regardless of geographic location. The Licence provides a means of guaranteeing that BDUs can fulfill this role without the impediments that would result from an obligation to negotiate with rights holders. JumpTV submits that making broadcasts available to Canadians via a fourth alternative system of retransmission serves to enhance the reach of the broadcast network to Canadians. Furthermore, Internet-based retransmitters are able to provide account portability, which ensures that users are able to access retransmitted signals from any terminal equipped with access to the Internet. As such, Internet-based retransmitters can further increase accessibility to the broadcast network in a manner that other retransmitters (cable, DTH satellite, multipoint wireless) cannot. Therefore, the primary purpo se of the Licence can only be further advanced by permitting Internet-based retransmitters to benefit from its privileges in the same fashion as do other retransmitters. Moreover, ensuring that Internet-based retransmitters are placed on a level playing field with others in the industry will create a level of competition surely beneficial to Canadian consumers.

    The Departments maintain that, "Internet-based retransmission differs in a number of significant respects from retransmission conducted by conventional BDUs." That statement distresses JumpTV as it serves as the premise for the question as to "whether, and under what conditions, if any, Internet-based retransmitters should also be entitled to rely on the Licence." While it is readily apparent that Internet-based retransmission differs in many respects from cable, satellite and multipoint wireless retransmission, it is just as clear that all three of these presently used retransmission systems equally differ one from the other. Such differences (eg. technological differences, terrestrial versus non-terrestrial systems, technical boundaries of retransmission reach, etc.) however, so long as the requirements of Section 31 are satisfied, cannot serve as grounds for exclusion from the Licence. Serious questions of fairness and equity would arise if these differences were used to support the exclusion of Internet-based retransmitters from privileges conferred by the Licence.

  5. Views in Support of the Compulsory Licensing of Internet-based Retransmission
  6. JumpTV agrees that "the Internet will eventually replace cable, DTH satellite and multipoint wireless distribution systems as the sole means of distribution of television." As such, it would be unfortunate for new and more efficient technologies to be stifled, thus depriving Canadians of superior options. While JumpTV is pleased to be at the vanguard of Internet-based retransmission, it is convinced that others, if permitted, would soon find it advantageous to likewise opt for that system, and this, to the benefit of consumers. JumpTV welcomes that competition and hopes that the outcome of this consultation process will foster the growth of Internet-based retransmission.

    JumpTV agrees that an Internet exclusion would "inappropriately limit the ability of conventional BDUs to themselves adopt the most effective technologies available in a time of rapid technological change." Such a result would be detrimental to the interests of Canadians.

  7. Concerns Raised by the Compulsory Licensing of Internet-based Retransmission
  8. 4.1 Global Reach of the Internet

    It is first crucial to note that "spill-over" concerns are in no way limited to the Internet-based retransmission industry. Satellite and multipoint wireless systems also have a potential global reach. The Departments comment that, "DTH systems operate on a subscription basis, and employ encryption technology to prevent unauthorized viewing both within and outside Canada." Although that may be the case, the fact remains that no encryption technology has proven to date to be entirely failsafe and "spillover" does occasionally occur. That, however, has not prevented DTH satellite providers from being allowed to benefit from the Licence.

    JumpTV submits that the potential global reach of the Internet should not be relevant to a determination of the availability of the Licence to Internet-based retransmitters. The issue of "spill-over" of communication signals into other countries is not one appropriate for Canadian legislation. This is clearly a matter for countries where such "spill-overs" occur to address as they see fit.

    Moreover, there exist Internet-based border-limiting and origin-detecting technologies being developed that will adequately protect against potential "spill-over". These will eventually be able to control the retransmission of signals and maintain them within the jurisdiction where they are licensed. As such, technological measures will take care of any "spill-over" issues, failing which, the laws of other jurisdictions will. Nonetheles, as JumpTV understands the concerns of rights holders as they relate to the licensing of content of over-the-air television signals on a territory-by-territory basis, JumpTV intends to use such preventive technological measures in the provision of its services. Although these products are not failsafe, as is the case with satellite retransmitters, this ought not to be sufficient reason to deny Internet-based retransmitters the benefits of the Licence. One should also note that "reach restriction technologies" are constantly ev olving. Consequently, coming to general conclusions with respect to the technology of any system is a mistake as such conclusions are surely to be proven wrong over time.

    In summary, JumpTV maintains that the issues of global reach and "spill-over" are best left to those jurisdictions where "spill-overs" occur. However, in the event that Canada nonetheless decides to legislate with respect to potential "spill-over", it should do so in a manner that is equitable, and consequently must not limit its regulation thereof to Internet-based retransmitters. As such, the question should not be whether we can trust a certain type of retransmitter to adequately contain its retransmissions, but rather whether an individual retransmitter, regardless of technology used, is conforming to territorial restriction guidelines. Arguments relating to technology become irrelevant in the face of appropriate technologically neutral territorial restrictions.

    4.2 Possible Undue "Extension" of a Limited Exception into a New Market

    JumpTV takes exception to the unqualified use of the term "undue extension" as the Departments fail to make mention of a highly relevant historical reality. Application of the Licence to the Internet context is no more an "extension" than was its previous application to the DTH satellite industry or to multipoint wireless systems. Indeed, the only element rendering the extension of the Licence to the Internet unique is that it is the most recent of, if the Government properly maintains a technologically neutral approach, what have been and likely will be a series of such extensions. Again, the hope is that progressively superior technologies will arise, resulting in better options for Canadians. JumpTV submits that so long as the requirements of Section 31 are met, no extension of the Licence to any new retransmission technology can be said to be "undue".

    The Departments raise the argument that, "the technological and social benefits which may be related to the on-line use of broadcast programming should be permitted to evolve through the "normal" requirement for users to negotiate access from rights holders, who are best placed to judge whether they should assume the piracy risks which may be associated with on-line distribution." JumpTV notes that piracy risks are associated with retransmission regardless of the technology employed. As discussed previously, policy considerations have dictated that rights holders should have the freedom to assume (or not) piracy risks curtailed for the sake of full access to broadcasting for all Canadians. JumpTV fully supports this policy and also notes that the copyright laws of those jurisdictions where, for instance, "spill-over" may occur can deal with piracy concerns. Alternatively, and as noted earlier, JumpTV is prepared to abide by a reasonable standard of geographic control subject to a requirement of maintenance of reasonable technological measures that would be applicable to all retransmitters, regardless of retransmission technology used. With such a geographic standard in place, rights holders would be guaranteed protection from piracy without depriving Canadians of full access to over-the-air signals.

    The Departments point out that, "broadcasters view competition from third parties able to retransmit their entire signals over the Internet as unfair and damaging to their ability to maintain and build their brands in a converging broadcast environment." JumpTV sees no good reason for preventing Internet-based retransmitters from carrying signals in a manner fully sanctioned by law simply because other parties, whether broadcasters or others, have failed to enter the Internet market in a more timely manner. The Departments also note with respect to the broadcasters that, "They note that they hold only very limited Internet rights in the content of their signals and claim that compulsory licensing would permit third parties to do that which they cannot." That argument also fails as it is clear that broadcasters, like any other party, are able to fully benefit from the Licence and may thus retransmit their own signals via the Internet.

    4.3 Lack of Comparable Broadcasting Regulatory Obligations and Restrictions

    The Exemption for new media broadcasting undertakings(the "New Media Exemption") exempts from the requirements to hold a broadcasting licence and conform with regulations made under Part II of the Broadcasting Act those undertakings that "provide broadcasting services delivered and accessed over the Internet". As such, Internet-based retransmitters are currently unconditionally exempt from regulation under the Broadcasting Act. They would therefore not be subject, unlike conventional BDUs, to must-carry obligations, restrictions on the signals which they may retransmit and, in the case of larger undertakings, an obligation to contribute a percentage of their gross revenues to the creation of Canadian programming.

    Unlike the Departments, JumpTV maintains that these differences in regulatory status can in no way militate against Internet-based retransmitters being afforded the benefit of the Licence. As is stated in the Consultation Paper, the temporarily exempted status does not necessarily imply that its operation would not further at least some of the same objectives of Canadian broadcasting policy as are furthered by conventional BDUs (in particular country wide access to over-the-air signals). Also as noted by the Departments, the CRTC retains the jurisdiction to impose program protection measures, signal carriage restrictions and other regulatory obligations on Internet-based retransmitters.

    JumpTV also submits that the goals embodied by the New Media Exemption cannot be left open to attack. They are crucial to the development of a healthy Canadian Internet industry, which further results in more quality choices for Canadian consumers. The purpose of the New Media Exemption is essentially to facilitate the deployment of Canadian backed new media on the Internet by reducing the number of regulatory barriers. To use the resulting "unregulated" status of Internet-based retransmitters as a premise for denying them the Licence defies all logic. The Government cannot claim to promote new media via its New Media Exemption and then cite the effects of that same exemption as reason for denying Internet-based retransmitters the benefit of the Licence, thus effectively suppressing new media.

    4.4 Lack of Comparable Investment

    Claims have been made to the effect that Internet-based retransmitters do not make the significant and socially beneficial investment that conventional BDUs make, and therefore should not be entitled to the benefit of the Licence. JumpTV rejects the contention that Internet retransmission does not require a similar substantial investment in infrastructure as do other retransmission technologies (e.g. JumpTV must lease its lines from telecommunication service providers). However, even if that were the case, new retransmission technologies should not be restricted from competing on those grounds alone. Finally, JumpTV notes that cable companies have more than recouped their investments in infrastructure. Therefore, if paying for infrastructure costs constitutes an underlying principle supporting the existence of the Licence, serious consideration should be given to removing cable systems from the scope of the Licence.

    Furthermore, as the Departments note, without the Licence applying to the Internet-based retransmitters, it is unlikely that they would be able to clear all rights necessary to retransmit entire signals over the Internet. "This would eliminate an entire class of potential competitors to conventional BDUs." Finally, JumpTV also concurs with the Departments in their assertion that the introduction of a technology-specific restriction could risk inappropriately limiting the ability of the Canadian broadcasting distribution system to ensure, through significant ongoing investment, that it continues to employ the most effective technologies available at any given time. In fact, this consultation process, although it is purportedly directed at resolving the application of the Licence to Internet-based retransmitters, will have a decisive impact on the viability of all future retransmission technologies in Canada.

  9. Principles and Options
  10. 5.1 Principles

    JumpTV fully supports the four principles set out by the Departments: shared access by Canadians to a vibrant broadcasting system, equitable balance among stakeholders, technological neutrality and innovation, and certainty. It maintains that giving Canadians the option of a fourth retransmission technology can only have positive effects by increasing potential access to and the vibrancy of the Canadian broadcasting system.

    JumpTV is aware of the concerns of rights holders, and maintains that subjecting Internet-based retransmitters to the applicable copyright tariffs will ensure that all stakeholders are treated in a fair and equitable fashion, which is the standard by which the Copyright Board sets these tariffs.

    JumpTV is in full agreement with the notion of technological neutrality. The introduction of technology-specific restrictions at this point would only serve to complicate matters with the advent of every new technological development, an endless series of consultations and legislative amendments the inevitable result. Both for the sake of efficiency as well as to ensure access for Canadians to the best available technologies, a technologically neutral Licence is the only viable option.

    JumpTV agrees that the scope of the Licence should be readily apparent to both rights holders and retransmitters. Ambiguity in the law cannot be used to shelter unlawful activities, nor should it inhibit lawful uses.

    5.2 Options for a Government Response

    JumpTV concurs with the Departments’ view that non-consensual retransmission to locations outside Canada of the protected works contained in retransmitted television signals does not further Canadian public policy. It, nonetheless, does not believe that it is appropriately Canada’s role to legislate with respect protecting rights holders from "spill-over" of signals into other jurisdictions. Legislation and litigation relating to such concerns should be left to the care of jurisdictions where those "spill-over" occur. For example, in the iCraveTV.com case, the Canadian Internet retrasmitter was successfully sued for "spill-over" into the United States. Nonetheless, if the government were to find it necessary to impose territorial restrictions on retransmissions, JumpTV would support a technologically neutral Licence subject to a reasonable standard of territorial restrictions applicable to all retransmitters.

    JumpTV deems it important to note that the concerns that territorial restrictions to retransmission aim to address are not ones that have arisen exclusively as a result of the coming to the fore of Internet retransmitters. As noted earlier, retransmission technologies other than the Internet-based are likewise susceptible to "spill-over". Failing to impose the territorial restrictions even-handedly and across the board would be unjustified and would offend basic principles of fairness and equity. From the point of view of rights holders, it would signify an unjustified lesser degree of protection than could otherwise be achieved. A technologically neutral approach is crucial to the imposition of territorial restrictions on the Licence.

  11. An Internet Exclusion
  12. In view of the fact that providing a definition for the "Internet" is in and of itself a problem, any legislative amendment should be focused on the effects of retransmission rather than the means by which it is carried out. This would do away with the need to determine whether any particular technology falls within the definition of "Internet", all the while providing the necessary level of protection to rights holders.

    It is clear to JumpTV that the Internet will eventually replace cable systems as the single method of distribution of television, radio and other content. In other words, the Internet will eventually replace the existing cable system. This convergence is already underway given that cable and Internet transmissions share the same wiring and simply operate based on different protocols. Further, Internet radio and even some streamed video services (e.g. news) are growing in popularity. It is to be expected that one network system (i.e. the Internet or its descendent) will eventually become the sole medium for the distribution of digital works. Should the Government amend Section 31 so as to exclude Internet retransmissions, this would eventually result in the extinction of the entire retransmission regime in Canada.

  13. A Technology-Neutral Licence Subject to Territorial and other Possible Restrictions
  14.  

    The Departments contend that Internet-based retransmissions raise specific concerns that include "spill-over". JumpTV takes exception and notes again that such concerns are raised by other retransmission technologies as well.

    7.1 Scope of the Licence

    Again, JumpTV wishes to reiterate its position by stating that it agrees that the Licence ought to be amended to expressly provide that any person who retransmits a signal by any technology will benefit from the availability of the Licence, so long as all other requirements are satisfied.

    JumpTV sees no reason to exclude over-the-air broadcasters which "rebroadcast" a signal from the benefit of the Licence. To do otherwise would unfairly prejudice broadcasters from engaging in alternative business endeavors. In any event, Expressvu (owned by BCE) is already effectively doing it today by application of the Licence in the retransmission of CTV Network (also owned by BCE) signals.

    7.2 A Territorial Restriction

    The following comments are all made subject to JumpTV’s insistence that the preferred course of action is to leave legislating with respect to "spill-over" to those jurisdictions where it occurs.

    The Departments state that, "Rather than prejudge technological developments, it may be preferable to impose an appropriate restriction such that Internet-based retransmission would be permitted only if the retransmitter can meet the specified requirements." In the event that a territorial restriction is deemed desirable, such restriction, for all the reasons discussed above, must be applicable to all retransmitters regardless of the technology used in the deployment of the service.

    a) An absolute or qualified restriction

    JumpTV concurs with the Departments in their view that a restriction, in the event that it is put in place, should be qualified rather than absolute. The standard should be one of reasonable care, and an unintentional foreign reception of a retransmitted signal, where reasonable preventive measures have been put in place, should not result in the violation of any territorial restrictions.

    b) Entities subject to a qualified restriction

    As stated before, JumpTV is clearly of the view that a territorial restriction, if it were to become a reality, would have to be imposed on all retransmitters regardless of the technology used. This is necessary for reasons of fairness and equity. It is also necessary in order to safeguard against the unwarranted competitive advantage that would result from a legislation that would require significant capital expenditures from some industry players while exempting others (e.g. DTH satellite sand multipoint wireless systems, which raise "spill-over" concerns). As discussed below, the cable industry also raises spill-over concerns, and it too, therefore, should be subject to eventual territorial restrictions.

    The Departments note that in the case of some classes of retransmitters, such as cable systems, concerns with "spill-over" do not apply. JumpTV notes that given the fact that cable can be proxied, cable retransmitters can also fall prey to "spill-over". Therefore, JumpTV maintains its argument to the effect that territorial restrictions should be applicable in a technologically neutral fashion.

    c) Elements of a qualified territorial restriction

    With regard to the implementation of a qualified territorial restriction, JumpTV agrees that the preferred course of action would include the requirement that reasonable technological measures be maintained. The reasonable standard of care would provide rights holders with a satisfactory level of protection, all the while allowing the Canadian broadcasting system to evolve without subjecting it to insurmountable regulatory barriers and the stifling fear of incessant litigation.

    JumpTV does not deem it necessary to subject the retransmitter to the obligation of monitoring the efficacy of the preventive measures. It is the view of JumpTV that any abuses, if and when they do occur, can be adequately dealt with by the Copyright Board. With that in mind, there is no sense in unnecessarily subjecting retransmitters to the costs of monitoring the efficacy of their measures.

    With respect to remedies for a violation of the territorial restriction, JumpTV submits that the attribution of a probationary status followed by the loss of Licence benefits until such time as a retransmitter is able to show the reasonableness of the preventive measures in place is a possible solution.

    JumpTV has no comment regarding restrictions on foreign reception that is lawful in that other place.

    7.3 Banner Advertising

    JumpTV disagrees with the view that banner advertising should not be permitted in the context of retransmission. There is no public policy rationale that would support a limitation on advertising simply because it is in competition with other advertising. Moreover, it is the view of JumpTV that the market is the best judge, and is the best placed to decide which, if any advertising, it wishes to take note of.

    JumpTV also notes that existing retransmitters have already begun promoting their "evolution" (eg., the Combo Box) towards services whereby subscribers could at their option simultaneously receive broadcasts and access the Internet. Given that the latter frequently contains significant amounts of advertising, a prohibition on the presentation of advertising alongside broadcasts would unnecessarily stifle the natural technological evolution of existing BDUs, to the detriment of all Canadians. Moreover, it is to be noted that banner ads are a new form of business forming an integral part of the new media that Canada is attempting to promote through the policies discussed further above. To prohibit banner ads would be in opposition to the beneficial goals those policies strive to promote.

    7.4 Unauthorized Retransmission by Authorized Users

    JumpTV deems it crucial to note that the issue of unauthorized retransmission by authorized recipients of signals is not one that is exclusive to Internet-based retransmission. It is a problem common to all retransmitters, and to address it with regard to a single form of retransmission is inequitable and fails to appropriately resolve it. JumpTV also notes that digital satellite DTH signals can be retransmitted over the Internet far more easily than can signals that have been transmitted over the Internet in the first place. Also, as noted above, cable can be proxied, and so it too is subject to the problem of unauthorized retransmission.

  15. Conclusion

The question is essentially whether or not the retransmission of free over-the-air broadcast signals over the Internet is beneficial or harmful to the Canadian public, the ultimate beneficiary of Canadian copyright law. Copyright law, it should be remembered, is a creature of statute intended to enhance the social welfare of Canadians. Any change to the retransmission system should be made with great care and as a result of broad public debate (which we hope will be fostered by this process). The current system exists only because great pressure was put on Canada to adopt a system of protection. Policy choices were made and a trade-off was given. To unilaterally decide to do otherwise without any good reason (and it should be emphasized that a good reason should be one that demonstrates that Canadian public welfare is somehow harmed) would be nonsensical at best and harmful to Canadian interests at worst.

Sincerely,

FASKEN MARTINEAU DuMOULIN LLP

 

 

 

Sunny Handa

SH/ce

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