ARCHIVED — A NAB

COPYRIGHT REFORM PROCESS

REPY COMMENTS

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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.

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Reply comment from National Association of Broadcasters (NAB) received on October 22, 2001 via e-mail

Subject: NAB's Reply Comments


PDF Version

October 22, 2001




Comments - Government of Canada Copyright Reform
c/o Intellectual Property Policy Directorate
Industry Canada
235 Queen Street
5th Floor West
Ottawa, ON K1A 0H5

By E-mail: copyright-droitdauteur@ic.gc.ca

The National Association of Broadcasters (NAB), a non-profit incorporated association consisting of commercial television and radio stations and broadcast networks which serves and represents the United States broadcasting industry, is pleased to provide its reply comments with respect to the Government of Canada's Consultation Paper on the Application of the Copyright Act's Compulsory Retransmssion License to the Internet.



Respectfully submitted,



Henry J. Baumann
Executive Vice President / Law & Regulatory Affairs

Benjamin F.P. Ivins
Senior Associate General Counsel

Enclosure





I. INTRODUCTION 1

II. U.S. BROADCASTERS NEED PROGRAM
EXCLUSIVITY IN THEIR LOCAL MARKETS
MORE THAN EVER 2

III. "SPILL OVER" OF SIGNALS INTO OTHER
JURISDICTIONS SHOULD BE OF GREAT
CONCERN TO CANADA 4

IV. NO ASSURANCES ARE PROVIDED THAT ANY
TECHNOLOGICAL MEANS EXIST TO
IMPLEMENT TERRITORIAL RESTRICTIONS 6

V. ANY PROVISIONS TO SECTION 31 SHOULD
ABSOLUTELY AND UNEQUIVOCALLY
PROHIBIT BANNER ADVERTISING 7

VI. RETRANSMITTER PROPOSALS TO
INSULATE THEMSELVES FROM
ACCOUNTABILITY FOR BREACHES OF
TERRITORIAL RESTRICTIONS SHOULD NOT
BE COUNTENANCED 9

VII. QUERY: WOULD CCTA'S LARGESS WITH
THE PROPERTY OF OTHERS EXTEND TO
ITS OWN? 10

VIII. CONCLUSION 12


I. Introduction

In its opening comments in this proceeding, the National Association of Broadcasters ("NAB") The NAB is a non-profit incorporated association of television and radio stations and broadcast networks which serves and represents the United States broadcasting industry. NAB includes among its members over 1,100 television stations.
expressed its unalterable opposition to the non-consensual retransmission of television broadcast signals over the Internet by means of a statutory or compulsory license. NAB provided expert testimony demonstrating how Internet retransmission of United States broadcast signals by Canadian entities pursuant to Section 31 of the Canadian Copyright Act could result in devastating consequences for the United States system of free over-the-air broadcasting and could violate the Berne Convention to which both Canada and the United States are signatories.

NAB's opening statement also demonstrated, through expert testimony, that currently there exists no technological measures that could assure the implementation of any regulations seeking to impose territorial restrictions on the Internet retransmission of broadcast signals so that such retransmissions would be contained within the confines of Canada. Accordingly, NAB urged that Canadian law be clarified expressly to exclude permitting the retransmission of television broadcast signals by Internet retransmitters.

Nothing in the comments submitted by other parties in this proceeding undermines the factual underpinnings supporting NAB's positions, and recent events have intensified the necessity for U.S. broadcasters to retain their ability to enforce their contractual rights to program exclusivity in their local markets.

While NAB is pleased that JumpTV has chosen to withdraw from the Copyright Board its application to retransmit broadcast signals, that withdrawal was not unconditional. JumpTV merely stated it was reconsidering the business model under which it might choose to operate. Because either JumpTV or some other retransmitter could emerge at any time and commence retransmissions of broadcast signals with (JumpTV) or without (iCraveTV) notice, it remains imperative that this proceeding clarify existing uncertainties and ambiguities as soon as possible.

II. U.S. Broadcasters Need Program Exclusivity In Their Local Markets More Than Ever

As NAB explained in its comments, the U.S. television broadcast system is a partnership among national networks, program syndicators, and local television stations whose continued vitality depends upon local stations enjoying a substantial degree of exclusivity in providing network and syndicated programming to local viewers. Local exclusivity is the engine that drives and entices advertisers to acquire spots, which provides the revenues to stations to continue to acquire quality programming and to provide local news, sports, weather, and public affairs programming. Advertisers would simply be less interested in acquiring spots in programs that were being duplicated in the market through the importation of distant signals by cable, satellite, or the Internet. (NAB comments at 3-7.)

While it is difficult precisely to quantify the adverse economic impact on the U.S. television broadcast system resulting from the tragic events of September 11, 2001, a few preliminary educated guesses provide some perspective. According to the Wall Street Journal, on September 11, and in the days immediately following, the U.S. television industry was losing $100 million a day. Wall Street Journal, 9/15/01 at B-6.
Major market stations have been estimated to have lost $80,000 to $100,000 per week during the first week of the crisis, M Street Daily, 9/14/01.
and during the week September 9 through 15, 2001, network advertising lost $188.4 million - 49% of its weekly revenue, while local television in the largest 75 markets alone, lost $93.2 million or 30% of their weekly advertising revenue from spot sales. Competitive Media Reporting, http://www.cmr.com/news/2001, October 1, 2001.
These figures do not include the enormous amounts of time stations have subsequently devoted to public service announcements and requests for charitable relief, nor does it include the millions of dollars in equipment and coverage lost by stations with facilities located at the World Trade Center.

As was true with Canadian broadcasters, (see MCC Comments), even before the events of September 11, spending on U.S. television advertising was down, in the case of U.S. broadcasters two to four percent. Id.
Estimates now are for a decline in revenues of six to eight percent for U.S. broadcasters. Id.
In these circumstances, it would be unconscionable to implement a Canadian copyright regime that would inflict further damage on the economics of the Canadian and U.S. free-over-the air television systems.

III. "Spill Over" of Signals Into Other Jurisdictions Should Be Of Great Concern to Canada

While concurring with the Departments' view that non-consensual retransmission of television signals to locations outside Canada would not further Canadian public policy, JumpTV nonetheless takes the position that such "spill over" should not be Canada's problem, and that "[l] egislation and litigation relating to such concerns should be left to the care of jurisdictions where those 'spill-over' occur." JumpTV Comments at 9.


The Departments should summarily reject JumpTV's callous indifference to the transborder implications of Canada's decision in this proceeding.

The Departments themselves articulated in the Consultation Paper why they should reject JumpTV's proposal. First, it would:
"risk harm to the legitimate interests of rights holders who could be obliged to bring proceedings in multiple jurisdictions in the hope of preserving the integrity of their territory-specific licensing arrangements" Consultation Paper @ 12.


Second, it would:
"undermine the ability of the holders of rights in Canadian film and television programming to extract full advantage from foreign markets." Id.


Presumably under JumpTV's view of the world, were the U.S. to consider action that would be inimical to Canadian interests, for example issuing a permit to a factory that would dump pollutants into a river or into the air that would likely flow into Canada, the U.S. should be indifferent to Canadian concerns. Specifically, we should leave Canadians to whatever remedies they might have against the American factory under U.S. law. Such a policy is as diplomatically insensitive as it is totally impractical.

JumpTV's reliance on the litigation against iCraveTV in the United States to support its proposal is completely misplaced. One of iCrave's top officials just happened to be located in Pittsburgh and iCrave had other significant contacts in the United States such that obtaining jurisdiction over iCrave was relatively rudimentary and was never challenged. One can only presume that JumpTV and other future potential Canadian retransmitters would be much shrewder about minimizing U.S. contacts in an attempt to avoid subjecting themselves to the personal jurisdiction of U.S. courts. Even if personal jurisdiction were obtained, there would be the extraordinarily complicated and tenuous task of getting remedies imposed by a U.S. court enforced against a Canadian retransmitter operating in Canada.

Finally, JumpTV's Motion that in legislating on this issue Canada has no obligation to assess the extraterritorial effects of its legislation violates both the letter and spirit of its obligations as a signatory of the Berne Convention. See NAB Comments at Section V.


IV. No Assurances Are Provided That Any Technological Means Exist to Implement Territorial Restrictions

In its comments, NAB demonstrated the many and diverse ways that any known means of attempting to implement territorial restrictions limiting Internet retransmissions to Canada could be circumvented. Not only do other comments fail to refute this evidence, they validate it. The Canadian Association of Internet Providers ("CAIP") anticipates that "at some future time, it will be possible for an ISP to operate a closed network such that certain content it selects (e.g., retransmitted signals) will only be accessible by persons located in a defined Canadian service area." CAIP Comments at 3. (emphasis supplied.)
JumpTV concedes that, at this juncture, Internet-based border-limiting and origin-detecting technologies only are "being developed" and postulates that they will “eventually” be able to geographically limit Internet retransmissions. JumpTV Comments at 5.
Further conceding that such technologies "are not failsafe," JumpTV nevertheless seeks to assure us that "reach restriction technologies are constantly evolving." Id.
Even conceding this might be true, history has also shown that circumvention technologies constantly evolve just as fast, if not faster, than the technologies designed to restrict, limit or deny access. With no proven technology to implement territorial restrictions, and nothing more than vague statements that they are "being developed" or "evolving" it would be reckless and irresponsible at this juncture to premise a statutory license on the viability of such restrictions.

In conceding that there currently exists no technology effectively to limit territorially the retransmission of broadcast signals on the Internet, JumpTV has sown the seeds for the demise of its argument that it should be permitted to retransmit broadcast signals because broadcasters have failed "in a timely manner to do so." JumpTV Comments at 6.
Indeed, a major reason why broadcasters have not engaged in widespread Internet retransmission of their signals is there is no technology to limit their geographic reach or to protect the copying of programming once it is on the Internet in a digital format. This, of course, would be of no concern to JumpTV who has not invested one dime in the creation or promotion of the programming.

V. Any Provisions To Section 31 Should Absolutely And Unequivocally Prohibit Banner Advertising

JumpTV, without any further elaboration or explanation, makes the rather astounding assertion that "[t]here is no public policy rational that would support a limitation on advertising simply because it is in competition with other advertising" and that the marketplace is the best judge of what advertising people might want to take note of. JumpTV at [[paragraph]] 7.3.


CAIP and CCTA at least acknowledge that there are public policy issues surrounding a retransmitter parasitizing off a broadcaster's signal, but suggest they are not copyright issues and, accordingly, should be address by the CRTC. CAIP at 2; CCTA at [[paragraph]][[paragraph]] 48-53.


The seemingly obvious rejoinder showing the errors to these propositions are articulated in the NAB's Comments, NAB Comments at pp. 28-29.
as well as those of MCC, MCC Comments.
the Director's Guild of Canada ("DGC"), DGC Comments at Section XI.
and the Bell Group. Bell Group Comments at [[paragraph]][[paragraph]] 38-49.


Banner advertising raises copyright and trademark issues in that it: 1) inhibits broadcasters, program suppliers, and their advertisers from fully exploiting the value of their works; 2) implicates moral rights; 3) constitutes an unauthorized compilation or adaptation; and 4) creates public confusion as to the source or origin of the broadcast.

As for the proposal that banner advertising is a CRTC issue, as the Bell Group correctly states:
A change in the manner in which the CRTC undertakes implementation of broadcasting policy does not eliminate advertising by retransmitters as a copyright issue it merely necessitates a change in the manner in which the issue is dealt with under the Copyright Act. The balance in the relationship between the transmitter and the retransmitter operating under the Licence is predicated on maintenance by each party of its role. Maintenance of these roles, therefore, is a copyright issue, and a copyright response is necessary. Bell Group's Comments at [[paragraph]] 42.


VI. Retransmitter Proposals to Insulate Themselves From Accountability For Breaches of Territorial Restrictions Should Not Be Countenanced

A consolidated summary of JumpTV's proposals for the level of accountability to which they feel Internet retransmitters should be held for complying with any territorial restrictions, reveal the total lack of confidence even they have that they could ever comply with such restrictions. Specifically JumpTV proposes that:

1) retransmitters only be subject to a "reasonable standard of care" so that they will not be subject to "the stifling fear of incessant litigation"; See CCTA Comments at [[paragraph]] 40.


2) retransmitters should not be in any way responsible for monitoring the efficacy of any preventative measures that may be required of them;
3) retransmitters should not be in any way responsible for unauthorized retransmissions of unauthorized users. JumpTV at 11-12.


It is clear from these positions that JumpTV would take its obligations to comply with any territorial restrictions about as seriously as it views the importance of certainty that any effective technological measures restricting Internet retransmissions of broadcast signals geographically do or will exist.

VII. Query: Would CCTA's Largess With The Property of Others Extend To Its Own?

While providing some lip service to the great concerns of broadcasters and their program suppliers about proposals to permit the retransmission of broadcast signals over the Internet under a compulsory license, CCTA's Comments exhibit an extraordinary degree of leniency concerning the limitations that should be placed on such retransmissions. One can only wonder if CCTA would be so generous if it was its own signals and programming that were at stake.

CCTA suggests its paramount goal in this proceeding is to "adopt Internet-based technology in order to serve their customers more efficiently, offer greater choice and flexibility in the services being offered, to facilitate value added features such as interactive elements or allow users to access web content and traditional broadcasting simultaneously." CCTA at [[paragraph]] 22.


Incorporating various aspects of CCTA's proposals, it should not be opposed to Canada adopting a retransmitter compulsory license that permitted under certain circumstances, third parties to retransmit over the Internet cable programming services provided by a cable system. Such a license must be technologically neutral which is "fundamental to the development of competition [with cable] in the converging communication sectors" and is necessary for "new entrants [that] are emerging who rely on [the Internet] to compete with established entities." CCTA Comments at [[paragraph]][[paragraph]] 15-23.
New entities offering these retransmitted cable services to subscribers could only do so "in a secure encrypted format," accessible to none other than the third party transmitter's subscribers. Id., at [[paragraph]] 28.
These third party retransmissions of Canadian cable signals over the Internet must be limited to Canada, Id., at [[paragraph]][[paragraph]] 38-41.
but only "reasonably technological means" are required to assure this limitation, and any "limited unintentional foreign reception" of cable's retransmitted signals, or any signal theft of Canadian cable signals is acceptable. Id., at [[paragraph]][[paragraph]] 48-57.
Whether or not third party retransmitters were permitted to retransmit cable services, cable services could be required to enable these retransmitters to provide simultaneous side by side or picture within picture access to all cable services. Id., at [[paragraph]] 32.
As for remedies, only injunctive relief should be available for retransmission of these cable signals outside Canada, even though they were originated within Canada. Id., at [[paragraph]][[paragraph]] 58-62.

This proposal is, of course, absurd, as are many of the accommodations CCTA suggests be included in a retransmitter compulsory license for broadcast signals over the Internet. Chief among these are the suggestions that: 1) permitting users to access web content and traditional broadcasting simultaneously could not contravene broadcaster interests, especially if they included advertising; 2) "reasonable" technological measures restricting signal reception to Canada are adequate regardless of their effectiveness; 3) banner advertising is not a copyright policy issue; and 4) the only relief available to rights holders when foreign reception of distant signals occur is an injunction.

VIII. Conclusion

In its conclusion to its initial comments in this proceeding, NAB stated that:
Permitting the retransmission of television broadcast signals over the Internet through a national compulsory license would violate the principles established by the Departments governing their deliberations in this proceeding, would have profound international implications and adverse consequences to both Canadian and non-Canadian copyright owners and broadcasters and likely would violate international law.

Nothing in the other comments submitted in this proceeding provides persuasive evidence to the contrary. Accordingly, NAB urges the Departments in the strongest possible terms to adopt the position that Canadian law be clarified expressly to exclude from its retransmission license the retransmission of television broadcast signals over the Internet.

Respectfully submitted,


Henry L. Baumann
Benjamin F.P. Ivins
NATIONAL ASSOCIATION OF
BROADCASTERS
1771 N Street, N.W.
Washington, D.C. 20036
(202) 429-5430


October 22, 2001