The TPP has rapidly become of the world's most significant trade
negotiations, with participants that include the United States,
Australia, Mexico, Malaysia, New Zealand, Vietnam, Japan, and
Canada. There is a veil of secrecy associated with the TPP,
however, as participants are required to sign a confidentiality
agreement as a condition of entry into the talks. Despite
those efforts, there have been occasional leaks of draft text that
indicate the deal could require major changes to Canadian rules on
investment, intellectual property, cultural protection,
procurement, and agriculture.
My weekly technology law column (Toronto
Star version, homepage
version) notes the Canadian government has adopted several
measures to guard against leaks by departmental officials.
According to documents obtained under the Access to Information
Act, a November 2012 email to government officials noted that
their access to TPP texts was conditioned on "Secret" level
clearance, an acknowledgement that all texts are watermarked and
can be traced back to the source, and confirmation that no sharing
within government is permitted without prior approval.
Industry Minister Christian Paradis appeared before the Standing
Committee on Industry, Science and Technology last week and was
asked what he thought Canadians would say about wireless pricing.
Paradis instead indicated what he would tell them:
I would tell them that when we compare with our peers, we are in the middle-average, we dropped down by almost 20% and this is a work in progress. We will continue. We are dedicated to have a fourth player and we will do whatever we can in terms of policy to achieve this. Frankly, so far time gave us reason.
If this is a work-in-progress, is the government prepared to do more? Apparently it is, as Paradis also told the committee:
When you talk about the roaming and the tower sharing, we announced broader measures, and if we have to intervene more we will.
The first section of the book features three
chapters focused on important administrative law questions about the
standard of review as well as an attempt to place the Supreme Court's
copyright jurisprudence within a larger context. With all five cases
originating with the Copyright Board of Canada, the interplay between
the Copyright Board and Canadaâs appellate courts is at issue throughout
the five cases, with two decisions - Rogers Communications Inc. v
Society of Composers, Authors and Music Publishers of Canada and Alberta
(Education) both specifically discussing standard of review issues.
I am delighted to report that this week the University of Ottawa Press published The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law,
an effort by many of Canada's leading copyright scholars to begin the
process of examining the long-term implications of the copyright
pentalogy. The book is available for purchase and is also available as a
free download under a Creative Commons licence. The book can be downloaded in its entirety or each of the 14 chapters can be downloaded individually.
This is the first of a new collection from the UOP on law, technology
and society (I am pleased to serve as the collection editor) that will
be part of the UOP's open access collection.
This book features fourteen articles on copyright written by independent
scholars from coast to coast. The diversity of contributors provides a
rich view the copyright pentalogy, with analysis of the standard of
review of copyright decisions, fair dealing, technological neutrality,
the scope of copyright law, and the implications of the decisions for
copyright collective management.
The revelations came as a result of questions from NDP MP Charlie Angus,
who sought information on data, information or privacy breaches in all
government departments from 2002 to 2012. The resulting documentation
is stunning in its breadth.
My weekly technology column (Toronto Star version, homepage version) notes that virtually every major government department has sustained breaches, with
the majority occurring over the past five years (many did not retain
records dating back to 2002). In numerous instances, the Privacy
Commissioner of Canada was not advised of the breach.
The Copyright Board of Canada has released a decision
in which it admits to palpable error that resulted in a hugely inflated
tariff. The case involved a tariff for SODRAC for reproduction of music
works in cinematographic works for private use of for theatrical
exhibition. The Canadian Association of Film Distributors and Exporters
had proposed a tiered tariff approach of a maximum of 2 cents per copy
containing 30 minutes of music or more (less music would result in a
lower tariff). The Copyright Board mistakenly established a tariff of
three cents per copy, mistakenly treating three tiers as three cents. As
the Board now notes:
CAFDE was seeking a rate of 2 cents per DVD copy containing over
30 minutes of SODRAC music; the Board's interpretation leads to
royalties that are 15 times higher or even more.
While SODRAC argued that the Board could not correct its error, the Board concluded that it could noting that this resulted in palpable error. Moreover, since the erroneous Board decision actually resulted in higher tariffs than those even requested by SODRAC, it also concluded that procedural fairness was breached. The Board has now suspended the tariff and advised that will issue a new decision in the future.
Jesse Brown had an interesting post yesterday that raised concerns about the prospect that the government might
use mounting fears over cyber-bullying to re-start their failed
lawful access legislation. While it is important to remain vigilant
about the possibility of the re-emergence of Internet surveillance
legislation, I think a more important signal suggests the bill really is
dead (at least until after the 2015 election).
First, Bill C-30
actually did include a provision that could arguably be used to help address
cyber-bullying. It wasn't the provisions involving privacy and
surveillance, but rather the expansion of a Criminal Code provision on
harassment. Section 372(3) currently provides:
Every one who, without lawful excuse and with intent to harass any
person, makes or causes to be made repeated telephone calls to that
person is guilty of an offence punishable on summary conviction.
The limitation to harassing phone calls would seemingly exclude
instances of cyber-bullying. Bill C-30 would have made provision
Everyone commits an offence who, without lawful excuse and
with intent to harass a person, repeatedly communicates, or
causes repeated communications to be made, with them by a means
It is therefore possible that we could see this provision
re-surface without bringing back the surveillance provisions that
raised concern across the country.
More notably, the government recently dropped lawful access from
its national cyber-security strategy. The 2010
Cyber-Security Strategy telegraphed the intent to bring
forward lawful access legislation with a commitment to introduce a
Yet earlier this month, the government released its Action Plan 2010-2015 for the Cyber-Security Strategy. It removed all references related to lawful access including the commitment to legislation involving Internet service providers. Given that the document originates with Public Safety - the most ardent supporter of lawful access within the government - the removal of surveillance language provides a strong signal that it is not part of the legislative plan for the foreseeable future.
This week's CRTC mandatory distribution hearing has placed the
spotlight on a fascinating disconnect between the Commission and the
Canadian broadcast community. Despite months of telegraphing its intent
to promote consumer choice over broadcaster revenues, the first two days
of the hearing have featured repeated presentations from groups who
have not gotten the message. CRTC Chair Jean-Pierre Blais could not have
been clearer in a speech last October:
In our decision, we noted that consumers increasingly expect to be
in control of what they watch. It makes sense that consumers and the
distributors who serve them should have more flexibility in packaging
choices. While we acknowledged the value of predictable revenues to the
programming services, we decided that the days of guaranteed wholesale
rates are over. Programming services cannot expect to remain completely
insulated from the growing demand for greater choice by Canadians.
He followed that up in March by telling the production community that it "will need to compete, just like any other sector."
Despite the messaging, many of the groups seeking mandatory distribution evidently don't get it.
yesterday about the parade of failed broadcaster business
models hoping to hit the jackpot with mandatory carriage, but it
was an exchange
between Commissioner Molnar and Sun News that best illustrates the
Molnar: I just want you to tell me right now why you think it
is fair and equitable that every Canadian cable subscriber
should pay for you today.
Teneycke: Well, I think the simplest answer is I think it's
the law in the sense that the Broadcast Act itself which is why
we're here, it's why the CRTC exists, it's why the CBC exists
and sort of the foundational core of all the rules around
broadcasting and to have the privilege to have access to
Canadians' homes and who is going to be distributing and who
Wrong answer. Despite some suggestions that the Broadcasting
Act obligates the CRTC to order mandatory distribution for
some channels, the provision in the law is very general. It merely
states that the Commission may "require any licensee who is
authorized to carry on a distribution undertaking to carry, on
such terms and conditions as the Commission deems appropriate,
programming services specified by the Commission."
It is therefore the CRTC that interprets the law and it falls to the
applicants to demonstrate why their proposals fall within that
interpretation. As Blais emphasized
at the start of the hearing, the CRTC has set a very high
threshold, providing yet another signal that broadcasters
should not be relying on regulatory mandates:
Given its exceptional nature, the CRTC has set the bar very
high for obtaining a mandatory distribution order on digital
basic service pursuant to section 9(1)h). The CRTCâs policy
requires that a service seeking such an order must clearly
demonstrate its exceptional nature and that it achieves
important public policy objectives under the Act.
Each applicant must therefore demonstrate, with supporting
evidence, that its service:
All four of these requirements must be met. Broadcasters have
largely emphasized the fourth criteria, citing their commitment to
Canadian content. Yet the CRTC requires far more. In a
world of almost unlimited choice available through the
broadcasting system and from unregulated Internet-distributed
voices, it is worth asking whether any service can meet the
standard of contributing in an exceptional manner to Canadian
expression. The very definition
of exceptional is to be the exception, uncommon or extraordinary.
Given the ready availability of programming alternatives, few
broadcasters will ever meet this standard.
The Sun News response was reminiscent of Bell's attitude in the Bell-Astral hearing, where the Commission was focused on the public interest and Bell paid scant attention to the issue. The Commission rejected the Bell deal and I suspect it will similarly reject the new proposals it has heard thus far (the big question will be about Starlight, the proposed Canadian movie channel that is better suited as an Internet-based Netflix competitor).
Indeed, the entire process feels dated as if a decade of disruptive technologies from YouTube to Netflix never happened. As I noted yesterday, the CRTC can and should use the high standard it has set within the law to put an end to the steady procession of poorly developed broadcast proposals that depend upon regulatory mandates for their very survival.
The CRTC kicked off its two week broadcast hearing on mandatory
distribution yesterday with a steady stream of proposals hoping to hit the jackpot by winning mandatory distribution (and
guaranteed millions) from cable and satellite distributors. I've written
(here and here)
about why mandatory distribution should be dropped altogether, but
yesterday's hearing provided the best evidence yet. CRTC Chair
Jean-Pierre Blais started the hearing by making it clear
that the Commission would establish a very high threshold - consistent
with the Act - before forcing any Canadians to pay for channels they may
not want. Over the course of the day, no one came close to meeting even
a low threshold.
As the hearing veered from proposals backed by studies suggesting
consumers weren't interested in their product to claims that broadcaster
costs were "totally retarded", it became apparent that the mandatory
distribution process is a last gasp for many failed, failing or never
started broadcast proposals. The Commission heard from channels that broadcast
distributors won't carry, that advertisers won't support, that few subscribers pay for, and that don't
have any content (user generated content was the answer for two such
proposals leading one Commissioner to ask why people wouldn't just watch
YouTube). Even the Sun News Network, the headliner of the day, acknowledged that its complaints about undue preference by
other distributors would not meet the legal standard, that it is already
available to 70% of cable subscribers, and that Videotron, which shares the same parent
company, has not placed the channel on basic service, even though it
is seeking an order from the CRTC requiring everyone else to do so.
No one wanted to acknowledge they could try competing in the
marketplace for subscribers or could launch an unregulated over-the-top
Internet-based service. Instead, the preferred model is to have
the CRTC require millions of Canadians to pay for their service
through mandatory distribution. All of this leads to a
broadcast catch-22. If consumers want your service, there is
seemingly no need for mandatory distribution since there is the
prospect for marketplace success. If consumers don't want
your service, forcing them to pay for it is rightly viewed as
unfair (no matter what the Broadcasting Act might say about
encouraging Canadian content).
The CRTC should use this hearing to put an end to this bad version of Regulatory Dragon's Den (with consumers' money at stake). For the new proposals, it should affirm that broadcasters need to convince consumers, not commissioners, that they have something worth buying. For broadcasters seeking renewal of mandatory carriage, it should send a message that the gravy train is over by rejecting price increases and limiting any renewal to three more years with notice that no further extensions will be granted. If the service is a necessary public service, the government should support it. If not, the market should decide. Either way, by the time Blais' term concludes in 2017, the CRTC should be out of the business of being the last hope for uncompetitive broadcast business models.
On the congratulatory side, Blais noted the Canadian film and television
production had a record year in 2012, growing by over $500 million over
the prior year, by far the highest total and fastest growth in over a
decade. Canadian television production led the way, increasing 21.3 per
cent in 2011/12, for a ten-year high of just under $2.6 billion. Most of
the increase was due to English-language programming, with fiction
production growing by over 41 per cent.
Yet there was a second comment that garnered less attention, but that may ultimately prove more important. After encouraging the industry to become more innovative and entrepreneurial, Blais warned "you will need to compete, just like any other sector."
For example, most of the funding for the record amount of
Canadian English-language television programming came from
taxpayers and broadcasters, not the original producers of the
content. According to Profile
2012, an annual report on the state of the industry, only
ten per cent came from private funding such as production
companies and private investors. Canadian distributors covered 18
per cent of the total costs, with foreign distributors kicking in
an additional nine per cent.
The notion of competing in the market should take centre stage
this week as the CRTC conducts its hearing on whether Canadians
who subscribe to cable and satellite television packages should be
required to pay for channels such as Sun News Network and
Starlight, a proposed all-Canadian movie channel. The regulatory
process has been likened to winning the lottery, since channels
selected for mandatory carriage are guaranteed millions in revenue
regardless of whether Canadians watch or even want the channel.
That shift in approach would represent a significant change in Canadian broadcast policy, effectively establishing a framework that requires the industry to compete for subscribers. As CRTC Chair Blais would say, just like any other sector.
We want to enhance competition and investment in this country, and this is why we adopted this policy back in 2008 for the AWS spectrum. Let me say that the price went down by an average of 11% since then, and we will continue this way with the 700 megahertz spectrum. We launched consultation with the industry to make sure that we enhance competition and provide better choice and better rates for our consumers.
Soon after the publication of my column on the digital divide in Canada, I received the following email from a reader, who lives just north of Toronto (FWIW, I've received similar letters from people within the City of Ottawa limits). The reader reacts to both the lack of access and the efforts of Xplornet to stop the government from supporting communities without access. The letter ends with an important question: will the Standing Committee on Industry, Science and Technology take the time to hear directly from Canadians without access? The full letter is posted below with permission.