ARCHIVED — A CANCOM

COPYRIGHT REFORM PROCESS

REPY COMMENTS

---

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.

---

Reply comment from Canadian Satellite Communications Inc. received on October 22, 2001 via e-mail

Subject: Submission

Version PDF

October 22, 2001

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

Introduction

1. Canadian Satellite Communications Inc. ("Cancom") is pleased to submit these comments in response to certain submissions filed pursuant to the Consultation Paper on the Application of the Copyright Act's Compulsory Retransmission Licence to the Internet dated June 22, 2001 issued by the Copyright Policy Branch of Canadian Heritage and the Intellectual Property Policy Directorate of Industry Canada (the "Consultation Paper"). These comments are restricted to the issue of the appropriateness of a territorial restriction on a compulsory licence for retransmission, whether via the Internet or any other means.

2. Cancom has a direct interest in the subject matter of the Consultation Paper. Cancom's wholly-owned subsidiary, Star Choice Television Network Incorporated ("Star Choice") is one of two Canadian DTH broadcasting distribution undertakings that have been licensed by the CRTC. Star Choice's activities as a DTH BDU fall squarely within the compulsory licence for the retransmission of distant and local signals that is set out in section 31 of the Copyright Act. Accordingly, any amendments to this section could have direct implications for Star Choice's lawful broadcasting activities.

3. A number of parties filed submissions in response to the Consultation Paper that supported a territorial restriction on the compulsory retransmission licence. As outlined in detail in these comments, Cancom submits that (i) a territorial restriction on the compulsory retransmission licence is not required under international law; (ii) a territorial restriction on the compulsory retransmission licence would frustrate export opportunities for Canadian telecommunications and broadcasting companies contrary to the Canadian public interest; (iii) imposition of a territorial restriction on the compulsory retransmission licence to protect the ability of rights holders to enforce territorial licensing arrangements is not warranted; and (iv) while Cancom supports technological neutrality in the Copyright Act, any territorial restriction that the Departments may determine is appropriate for Internet-based retransmission must not be extended to satellite-based retransmission.

Not Required under International Law

4. In the Consultation Paper, the Departments noted that

it has been argued that the application of the [compulsory retransmission licence] to the Internet could render Canada in violation of its international obligations since, although Article 11(bis) of the Berne Convention contemplates the compulsory licensing of the retransmission of the over-the-air signals, paragraph 2 thereof provides that such licences "shall apply only in the countries where they have been prescribed".

This argument has been reiterated in some of the submissions filed in response to the Consultation Paper.

5. Cancom submits that the requirements of paragraph 2 of Article 11(bis) of the Berne Convention were intended only to reinforce the domestic nature of copyright laws, and to preclude a claim that compliance by a retransmitter with a compulsory licence regime of one jurisdiction would render that retransmitter "immune" from the requirements of a second jurisdiction affected by the retransmission. The paragraph reinforces the requirement that a retransmitter comply with the copyright laws of all affected jurisdictions. Thus, if a satellite retransmitter were to receive an over-the-air radio signal in Canada and retransmit that signal to a household in the U.S., compliance by the retransmitter with the compulsory licence in section 31 of the Copyright Act would not preclude the necessity for compliance with the applicable laws of the U.S. Similarly, compliance by the satellite retransmitter with an applicable compulsory licence imposed by laws in the U.S. would not obviate the need to comply with the requirements of section 31.

6. Some have argued that paragraph 2 of Article 11(bis) of the Berne Convention requires a country to prohibit retransmissions effected pursuant to a compulsory licence that extend beyond its borders. This interpretation of the Berne Convention could not possibly be correct, since it would result in most parties to the Berne Convention being in default of their international obligations. In this regard, the Departments noted in the Consultation Paper that the only express territorial restriction on a compulsory retransmission licence that they were aware of was that imposed on satellite retransmissions pursuant to section 119 of the U.S. Copyright Act. Cancom notes that the compulsory licence for the broadcast of musical works by U.S. radio stations is not subject to a territorial restriction. If the extreme interpretation of Article 11(bis) were correct, an over-the-border broadcast by a U.S. radio station would offend the Berne Convention. Similarly, the Internet retransmission by a radio broadcaster of its own signal pursuant to a compulsory licence in the U.S. – an activity which the National Association of Broadcasters (the "NAB") believes is or should be permissible pursuant to compulsory licensing in the U.S. – would also, according the reasoning of the NAB, necessarily offend the Berne Convention.

7. Cancom accordingly submits that there is no requirement at international law that a compulsory licence for retransmission be subject to a territorial restriction.

Frustration of Export Opportunities

8. Cancom is strongly opposed to the addition of a territorial limitation on the compulsory licence in section 31 since the satellite transmissions employed for the DTH business are not, by their very nature, limited to national boundaries. Any such addition would have the consequence of limiting any expansion of the DTH businesses outside Canada, regardless of the compensation available to rights holders under the copyright regime of the receiving country. Cancom believes that such an extraordinary step is neither warranted nor appropriate. Such a step would effectively nullify any attempt by a Canadian DTH operation to expand its operations outside Canada, legally and in full compliance with local laws.

9. At the present time, Cancom is not able to deliver its Star Choice DTH service to the U.S. This is because the U.S. excluded from its WTO commitments in respect of the liberalization of the trade in basic telecommunications services "one-way satellite transmissions of DTH and DBS television services and of digital audio services". The reason for this exclusion was to allow the U.S. to engage in bilateral negotiations with Canada to allow Canadian DTH companies access to the U.S. market in return for U.S. DTH companies being permitted access to the Canadian market.

10. While there are currently significant regulatory obstacles under the Broadcasting Act to U.S. DTH companies such as DirecTv and Echostar being permitted to operate lawfully in Canada, it is conceivable that such obstacles could be removed in the future. One of the ironies of the territorial restriction that applies to the U.S. compulsory satellite retransmission licence under section 119 of the U.S. Copyright Act is that, even if such other regulatory obstacles were removed, U.S. DTH companies could not offer retransmitted over-the-air services (which are a fundamentally important part of any DTH company's service offering) in Canada without infringing U.S. copyright law. This would be the case even if the U.S. companies complied fully with the requirements of section 31 of the Canadian Copyright Act and all other applicable laws. Section 119 of the U.S. Copyright Act thus serves as an important barrier to the export of U.S. telecommunications services.

11. If Canada were to adopt a territorial restriction on the retransmission compulsory licence, Star Choice, Bell ExpressVu and any other Canadian satellite retransmitters would face an insurmountable obstacle in extending their services to other countries. Any export of their services would result in the loss of the compulsory licence and the consequent need to obtain the consent of all copyright owners to the retransmission. It is impractical, and indeed impossible, to obtain such consent. Canada should not follow the U.S. and create for its own satellite retransmitters the dilemma that section 119 of the U.S. Copyright Act has created for satellite retransmitters based in that country.

12. Cancom submits that Canadian copyright law should not serve as a barrier to the export of Canadian telecommunications and broadcasting services. The Canadian satellite system has been designed to exploit free trade opportunities by allowing the delivery of services throughout the Western hemisphere. The Canadian retransmission licence should extend to all activities that occur in Canada, regardless of whether activities also occur in other countries. There are significant public benefits associated with such export activities, and Cancom disagrees strongly with the view expressed by the Departments in the Consultation Paper that "non-consensual retransmission to locations outside Canada of the protected works contained in retransmitted television signals does not further Canadian public policy interests".

13. It must be emphasized that any use of satellites for DTH retransmission or other purposes must comply with all domestic legal requirements including the payment of applicable royalties for compulsory licences under domestic law. It is not clear, therefore, why a territorial restriction would be necessary. For example, in the one instance to date in which television signals were transmitted via the Internet (by iCraveTV), local rights holders experienced no difficulty in enforcing local laws. Cancom does not believe that it is in Canada's public interest to attempt to supplant the copyright laws of foreign jurisdictions by imposing a territorial restriction within Canadian copyright law. Indeed, a Canadian domestic legal requirement prohibiting otherwise legal retransmissions will merely place Canadian companies at a marked competitive disadvantage in non-Canadian markets.

14. Any restriction of satellite retransmission activities to the territory of Canada under Canadian law, and without regard to the legality of the activity under the laws of other countries, is entirely at odds with the growing internationalization of Canada's satellite infrastructure and the liberalization of international trade in goods and services.

Enforcement of Territorial Licensing Arrangements

15. In the Consultation Paper, the Departments expressed the view in the following terms that a territorial restriction would be required if Internet retransmissions were to receive the benefit of a compulsory licence:

Although it has been argued that recourse to foreign law ought to be the solution for rights holders concerned with the preservation of their territory-specific "business models", the departments believe this could be an inequitable consequence of a compulsory licensing regime. Among other things, this could undermine the ability of the holders of rights in Canadian film and television programming to extract full advantage from foreign markets. Given the foregoing, the departments are of the view that if Internet-based retransmission were to have the benefit of the [compulsory retransmission licence] it likely must, at a minimum, be subject to an appropriate territorial restriction.

Some of the parties that commented on the Consultation Paper have supported this view of the Departments.

16. Cancom disagrees strongly with the proposition that a territorial restriction should be imposed on a retransmission licence so as not to interfere with territorial licensing by copyright owners. It is the very essence of a compulsory retransmission licence that broadcast works will be retransmitted to areas outside of the area in which they were licensed for free over-the-air reception. The owners of copyright receive compensation for such out-of-market retransmissions from the compulsory licence royalties.

17. If the Government of Canada had shared the Departments' current views and not adopted a compulsory licence for the retransmission of Canadian and non-Canadian television signals in Canada, there is no doubt that Canada would not benefit from its current multiple platform broadband infrastructure, which now reaches virtually all Canadians, and Canadians would not have access to a full range of Canadian and non-Canadian programming services.

18. The only difference between retransmission to out-of-market areas in Canada and out-of-market areas outside Canada is that the compulsory licence provided in section 31 of the Canadian Copyright Act cannot authorize that aspect of the retransmission that occurs outside Canada and the royalties payable pursuant to section 31 cannot compensate the rights owners for the activity outside Canada. When there is a retransmission to an out-of-market area outside Canada, it is the copyright law of the foreign jurisdiction that will determine the circumstances in which the retransmission will be lawful. If the foreign jurisdiction requires that the retransmitter obtain the consent of rights holders, then a licensing agreement and the payment of negotiated compensation will be required. If the foreign jurisdiction has a compulsory licensing regime, the royalties payable under that regime will be available to the rights owners in addition to the royalties payable pursuant to section 31 of the Canadian act.

19. In Cancom's submission, it is completely appropriate to expect rights owners to assert their rights under the domestic copyright laws of each jurisdiction in which their works are distributed. There is no benefit to Canada, and no obligation on Canada, to police copyright in foreign countries by imposing a territorial restriction on Canadian compulsory licensing.

20. Cancom notes, however, that the concerns expressed by most parties filing submissions in response to the discussion paper with respect to this issue emanate from what the NAB calls the "essential nature of the Internet medium – that it is global, interconnected, and non-hierarchical". While Cancom does not believe that this description necessarily captures the essential nature of Internet technology, it certainly does not apply to satellite retransmissions made by DTH and DBS undertakings. The Departments' concerns, therefore, with respect to the transaction costs of enforcing territorial restrictions similarly do not apply to satellite retransmissions.

Technological Neutrality

21. While Cancom's focus is on the application of the retransmission compulsory licence to satellite retransmitters, all of the foregoing submissions apply to retransmission effected via the Internet and other means. Cancom supports a technology-neutral approach to the compulsory licence, and accordingly is of the view that a territorial restriction that applies only to Internet-based retransmitters would not be appropriate.

22. If, however, the Departments determine that retransmission via the Internet must be subject to a territorial restriction, Cancom submits that the principle of technological neutrality must be abandoned so that such restrictions do not apply to the compulsory licence for satellite retransmitters. Cancom believes that this differentiation could be justified if necessary by the fact that no Internet retransmitters are currently in operation in Canada. Indeed, with the withdrawal of JumpTV from the Canadian Copyright Board proceedings, it appears that no Internet retransmission operations are even being proposed at this time.

Conclusion

23. We thank the Departments for this opportunity to make our views known on a matter that is of fundamental importance to the current and future operations of Star Choice and other Canadian satellite service providers, and would be pleased to respond to any questions that the Departments may have concerning our position.

Yours truly,


"Brad Shaw"

Brad Shaw
Senior Vice President, Operations