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The Expansion of Personal Information Disclosure Without Consent: Unpacking the Government’s Weak Response to Digital Privacy Act Concerns

Michael Geist - Tue, 10/21/2014 - 08:03

Bill S-4, the government’s Digital Privacy Act, was sent for review to the Industry Committee yesterday. The committee review, which comes before second reading, represents what is likely to be the last opportunity to fix a bill that was supposed to be a good news story for the government but has caused serious concern within the Canadian privacy community. While there are several concerns (I raised them in my appearance before the Senate committee that first studied the bill), the chief one involves the potential expansion of voluntary disclosure of personal information without consent or court oversight. Bill S-4 proposes that:

“an organization may disclose personal information without the knowledge or consent of the individual… if the disclosure is made to another organization and is reasonable for the purposes of investigating a breach of an agreement or a contravention of the laws of Canada or a province that has been, is being or is about to be committed and it is reasonable to expect that disclosure with the knowledge or consent of the individual would compromise the investigation;

Translate the legalese and you find that organizations will be permitted to disclose personal information without consent (and without a court order) to any organization that is investigating a contractual breach or possible violation of any law. This applies both past breaches or violations as well as potential future violations. Moreover, the disclosure occurs in secret without the knowledge of the affected person (who therefore cannot challenge the disclosure since they are not aware it is happening).

The government is clearly aware that this is a major concern as it attempted to answer the critics during debate over Bill S-4 in the House of Commons yesterday. Unfortunately, the responses were incredibly weak. I’ve identified at least six responses from government sources below.

1. Expanded Disclosure Without Consent is Needed for Investigations by Regulatory Bodies

Conservative MP Cheryl Gallant claimed that there is a need for the provision since there are regulatory bodies such as the College of Physicians and Surgeons of Ontario, the Law Society of Alberta, or the Association of Professional Engineers of Nova Scotia that may need to obtain personal information as part of an investigation into member conduct. Yet the three organizations are all already included in a list of organizations that qualify as investigative bodies and therefore can rely on an exception that permits disclosure. In fact, the list already includes nearly 100 organizations that ranges from the Association of Professional Geoscientists of Ontario to the Board of Funeral Services to the College of Midwives of Ontario. The law has been in effect for over 10 years, providing plenty of time for dozens of organizations to obtain regulatory approval. Opening the disclosures to any private organization is simply not needed as there is no problem for regulatory bodies that conduct member investigations.

2. Expanded Disclosure Without Consent is Consistent with a 2006 Committee Recommendation

Government MPs claim that the provision is merely implementing a 2006 recommendation from the last committee to consider Canadian private sector privacy law. But while the Standing Committee on Access to Information, Privacy and Ethics may have recommended a similar reform in 2006, that recommendation was rejected by both the Conservative government and the Privacy Commissioner of Canada. The committee recommendation appears to have come from a single submission from the Canadian Bar Association. The CBA appeared before the committee but was not questioned about the proposal. The CBA proposal focused specifically on personal information legally available to a party to a legal proceeding. That is much narrower than the Bill S-4 provision.

In fact, even that narrower proposal was rejected by the Conservative government in its response to the committee recommendations:

The government notes the Committee’s recommendation and acknowledges that it was made in response to concerns expressed by certain stakeholders regarding the need to ensure that PIPEDA does not impede litigation procedures.  However, the government does not share the Committee’s view that such an amendment is necessary at this time.

The Privacy Commissioner of Canada also publicly opposed the recommendation, which she included among the six issues about which she had particular concerns:

The Canadian Bar Association recommended that the AB and BC Acts both provide clarity in regard to information legally available in a legal proceeding. I do not believe that this issue has posed any great difficulty over the past five years. The OPC has stated in complaints that the access provisions of PIPEDA may be broader than the requirements of discovery, depending on the breadth of documents relevant to a proceeding.

In other words, Bill S-4 contains an expanded version of a provision that one group asked for without facing any questions, that the government rejected when it was proposed, and about which the Privacy Commissioner of Canada expressed particular concern.

3. The Privacy Commissioner of Canada Supports Bill S-4

Government MPs claimed that the Privacy Commissioner of Canada supports Bill S-4. However, the Privacy Commissioner’s submission to the Senate committee specifically identified expanding voluntary disclosure without consent to private organizations as a concern:

While we understand the challenges created by the existing investigative body regime, we have some reservations about the proposed amendments. First, we believe that the grounds for disclosing to another organization are overly broad and need to be circumscribed, for example, by defining or limiting the types of activities for which the personal information could be used...Finally, there is the issue of transparency. These disclosures will be invisible to the individuals concerned and to our Office. In order to provide greater accountability, we recommend that the Committee consider ways to require organizations to be more transparent about the disclosures they would make under this provision.

4. Canadians Expect Businesses to Disclose Their Personal Information

Conservative MP Joan Crockatt implausibly argued that Canadians expect that businesses will share their personal information in this manner:

The provisions in the bill would allow businesses to share information in the normal course of business in a very limited way. They are things that would actually be required for that business to be conducted. It would not involve something like a major search through data to look for information on a large number of consumers. This would be something that would be more specific to being able to conduct day-to-day business, something that consumers would expect when they are doing business with a corporation.

The reality is that the provision has nothing to do with day-to-day business operations. Indeed, businesses can easily obtain consent for that form of use. The provision in question involves disclosure without consent.

5. PIPEDA Already Includes Information Sharing Provisions

Industry Minister James Moore’s press secretary Jake Enright argued on Twitter that PIPEDA has always permitted information sharing. However, as Enright surely knows, PIPEDA does not currently include a blanket exception for disclosure to private sector organizations. There are an assortment of exceptions for disclosure without consent, but the broad permission found in Bill S-4 is not there. This is not a case of implementing strict rules, but rather expanding the scope of disclosure without consent or court oversight.

6. Bill S-4 Is Consistent With the Supreme Court of Canada Spencer Decision

Enright also maintained that Supreme Court of Canada’s Spencer decision, which found that there is a reasonable expectation of privacy in subscriber information, does not mean that Bill S-4 is unconstitutional. But the constitutionality argument is wholly beside the point given the emphasis on reasonable expectation of privacy. Moreover, when Moore appeared before the Senate committee, he argued that consumers may have agreed to the voluntary disclosures in their user agreements:

Well, if you agree to a contract, for example, with a telecommunications company, and as part of that contract you can surrender some of your capacity to have your information shared under certain circumstances, that can exist in a number of contractual situations, but that’s an individual signing a contract and agreeing to that openness in the case of a criminal investigation.

But the Supreme Court was dismissive of arguments that consumers had consented to the disclosure of their information in the ISP user agreements:

Whether or not disclosure of personal information by Shaw is “permitted” or “required by law” in turn depends on an analysis of the applicable statutory framework. The contractual provisions, read as a whole, are confusing and equivocal in terms of their impact on a user’s reasonable expectation of privacy in relation to police initiated requests for subscriber information.

The Court added:

Given that the purpose of PIPEDA is to establish rules governing, among other things, disclosure “of personal information in a manner that recognizes the right of privacy of individuals with respect to their personal information” (s. 3), it would be reasonable for an Internet user to expect that a simple request by police would not trigger an obligation to disclose personal information or defeat PIPEDA’s general prohibition on the disclosure of personal information without consent.

The reality is that the expansion of voluntary disclosure of personal information without consent or court oversight is both overbroad and a serious threat to the privacy of Canadians. Indeed, when coupled with the expansion of voluntary warrantless disclosure to law enforcement in Bill C-13 (through full legal immunity) and the revelations of more than a million annual disclosures of subscriber information to law enforcement, it paints a picture of the government undermining privacy while claiming to protect it.

The post The Expansion of Personal Information Disclosure Without Consent: Unpacking the Government’s Weak Response to Digital Privacy Act Concerns appeared first on Michael Geist.

How Corporate Canada Rejected the Canadian Government’s Plan to Combat Patent Trolls

Michael Geist - Mon, 10/20/2014 - 06:23

The Internet Association, a U.S.-based industry association that counts most of the biggest names in the Internet economy as its members (including Google, Amazon, eBay, Facebook, Netflix, and Yahoo), recently released a policy paper on how Canada could become more competitive in the digital economy. The report’s recommendations on tax reform generated some attention, but buried within the 27-page report was a call for patent reform.

The Internet giants warned against patent trolling, which refers to instances when companies that had no involvement in the creation or invention of a patent demand licences or other payments from legitimate companies by relying on dubious patents. Studies indicate that patent trolling has a negative impact on economic growth and innovation and is a particularly big problem in the U.S., which tends to be more litigious than Canada.

Given those concerns, the Internet Association urged the Canadian government to enact reforms to “limit the ability of non-practicing entities [a euphemism for patent trolls] of exploiting patents to make unreasonable demands of productive companies and prevent crippling damage awards.”

While the Canadian government has yet to respond publicly to the recommendations, my weekly technology law column (Toronto Star version, homepage version) reports that according to documents recently obtained under the Access to Information Act, earlier this year Industry Minister James Moore launched a series of private consultations with Canadian business on intellectual property issues. The government came prepared to engage directly on the patent trolling issue, going so far as to identify several potential policy measures. Yet it was Canadian business that discouraged Moore from taking action, warning against the “unintended consequences” of patent reforms.

The primary consultation took place in February 2014, featuring a who’s who of Canadian business including associations such as the Canadian Chamber of Commerce and Canadian Council of Chief Executives as well as Blackberry, IBM, Bombardier, Microsoft, and Cisco. The internal documents indicate that Moore’s opening remarks stressed concern with patent trolling, as he told the executives that “I am also particularly interested in hearing about any experience you may have had dealing with patent trolls in Canada or abroad.”

Moore’s comments were more than just talk. Government documents reveal that his department prepared a detailed discussion document on potential policy reforms that raised the possibility of implementing some of the toughest anti-patent troll reforms in the world.
For example, the government opened the door to a new prohibition against demand letters that are intentionally ambiguous or designed to induce a settlement without considering the merits of the claim. The government also raised the possibility of mandating public disclosure of the demand letters, which it hoped would create a public database of active patent trolling activity.

If the demand letter reforms were insufficient, the government mooted reforms that would grant the Federal Court the power to issue injunctions to stop patent trolls from forum shopping or amendments to the Competition Act to give the Competition Bureau the power to target anti-competitive activity by patent trolls.

Yet despite the opportunity to give the green light to combat patent trolls, the Canadian business community urged caution. According an internal summary document on the discussions, Cisco warned that the reforms “could do more harm than good.” Jim Balsille, the co-founder of Blackberry, indicated that he supported the intent of the patent troll reforms, but cautioned about the need to get the details right. The Canadian Chamber of Commerce also expressed concern with the reforms, arguing that the measures could legislate against legitimate assertion of patent rights and that they could create a chilling effect.

Given the negative response, the government appears to have backtracked on the patent troll issue. The initiative will come as a surprise to some, however, as the government’s proactive efforts to address patent trolling were secretly met with opposition from some of the same groups that have not hesitated to publicly criticize Canada’s intellectual property system.

The post How Corporate Canada Rejected the Canadian Government’s Plan to Combat Patent Trolls appeared first on Michael Geist.

How Canadian Business Chilled Patent Troll Reforms

Michael Geist - Mon, 10/20/2014 - 06:11

Appeared in the Toronto Star on October 18, 2014 as How Canadian Business Chilled Patent Troll Reforms

The Internet Association, a U.S.-based industry association that counts most of the biggest names in the Internet economy as its members (including Google, Amazon, eBay, Facebook, Netflix, and Yahoo), recently released a policy paper on how Canada could become more competitive in the digital economy. The report’s recommendations on tax reform generated some attention, but buried within the 27-page report was a call for patent reform.

The Internet giants warned against patent trolling, which refers to instances when companies that had no involvement in the creation or invention of a patent demand licences or other payments from legitimate companies by relying on dubious patents. Studies indicate that patent trolling has a negative impact on economic growth and innovation and is a particularly big problem in the U.S., which tends to be more litigious than Canada.

Given those concerns, the Internet Association urged the Canadian government to enact reforms to “limit the ability of non-practicing entities [a euphemism for patent trolls] of exploiting patents to make unreasonable demands of productive companies and prevent crippling damage awards.”

While the Canadian government has yet to respond publicly to the recommendations, according to documents recently obtained under the Access to Information Act, earlier this year Industry Minister James Moore launched a series of private consultations with Canadian business on intellectual property issues. The government came prepared to engage directly on the patent trolling issue, going so far as to identify several potential policy measures. Yet it was Canadian business that discouraged Moore from taking action, warning against the “unintended consequences” of patent reforms.

The primary consultation took place in February 2014, featuring a who’s who of Canadian business including associations such as the Canadian Chamber of Commerce and Canadian Council of Chief Executives as well as Blackberry, IBM, Bombardier, Microsoft, and Cisco. The internal documents indicate that Moore’s opening remarks stressed concern with patent trolling, as he told the executives that “I am also particularly interested in hearing about any experience you may have had dealing with patent trolls in Canada or abroad.”

Moore’s comments were more than just talk. Government documents reveal that his department prepared a detailed discussion document on potential policy reforms that raised the possibility of implementing some of the toughest anti-patent troll reforms in the world.
For example, the government opened the door to a new prohibition against demand letters that are intentionally ambiguous or designed to induce a settlement without considering the merits of the claim. The government also raised the possibility of mandating public disclosure of the demand letters, which it hoped would create a public database of active patent trolling activity.

If the demand letter reforms were insufficient, the government mooted reforms that would grant the Federal Court the power to issue injunctions to stop patent trolls from forum shopping or amendments to the Competition Act to give the Competition Bureau the power to target anti-competitive activity by patent trolls.

Yet despite the opportunity to give the green light to combat patent trolls, the Canadian business community urged caution. According an internal summary document on the discussions, Cisco warned that the reforms “could do more harm than good.” Jim Balsille, the co-founder of Blackberry, indicated that he supported the intent of the patent troll reforms, but cautioned about the need to get the details right. The Canadian Chamber of Commerce also expressed concern with the reforms, arguing that the measures could legislate against legitimate assertion of patent rights and that they could create a chilling effect.

Given the negative response, the government appears to have backtracked on the patent troll issue. The initiative will come as a surprise to some, however, as the government’s proactive efforts to address patent trolling were secretly met with opposition from some of the same groups that have not hesitated to publicly criticize Canada’s intellectual property system.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post How Canadian Business Chilled Patent Troll Reforms appeared first on Michael Geist.

New TPP Leak: Canada Emerges as Leading Opponent of U.S. Intellectual Property Demands

Michael Geist - Thu, 10/16/2014 - 07:03

This morning Wikileaks released an updated leaked version of the draft Trans Pacific Partnership intellectual property chapter. The latest leak dates from May 2014 (the previous leak was current to August 2013. I assessed it in posts here, here, here, here and here). The 77-page document provides a detailed look at the proposed chapter, complete with country positions on each issue. While a comprehensive assessment of the chapter will take some time, the immediate takeaway is that the U.S. remains fairly isolated in its efforts to overhaul patent and copyright law around the world with Canada emerging as the leading opponent of its demands.

In fact, Wikileaks compiled the following graphic that shows Canada as the strongest opponent to TPP IP demands, signalling its opposition to a proposal 56 times, more than any other country. The strongest opposition comes in the patents, enforcement, trademarks, and copyright sections.

WikiLeaks-TPP-IP-Opposing By Julian Assange and Sarah Harrison https://wikileaks.org/tpp-ip2/attack-on-affordable-cancer-treatments.html

Why is Canada opposing so many U.S. demands?

Simply put, the U.S. wants Canada to eviscerate many of the recent reforms found in copyright and counterfeiting legislation along with court rulings on patent protection. These demands focus on enhanced criminal liability for copyright infringement, eliminating the Canadian approach to Internet service provider liability, extending the term of copyright protection, and expanding patent protection. Canadian negotiators have thus far resisted many of the proposed changes, offering alternatives that are compatible with current law. Yet as the treaty negotiations continue, the pressure to cave to U.S. pressure will no doubt increase, raising serious concerns about whether the TPP will force the Canadian government to overhaul recently enacted legislation that it has steadfastly defended as reflecting a balanced, “made in Canada” approach.

The post New TPP Leak: Canada Emerges as Leading Opponent of U.S. Intellectual Property Demands appeared first on Michael Geist.

Government Opens Door to Major Changes to Digital Privacy Bill

Michael Geist - Wed, 10/15/2014 - 06:52

While it was overshadowed by the headlines over potential copyright reform, Peter Van Loan, the government’s House leader, disclosed last week that the government is planning to send Bill S-4, the Digital Privacy Act, to the Industry Committee for review prior to second reading. The bill, which has proven controversial due to a provision that expands the possibility of voluntary disclosure of subscriber information and relatively weak security breach disclosure rules, will be open to more significant reforms that previously thought possible (my remarks before the Senate committee can be found here). Under Parliamentary rules, referring a bill before second reading allows the committee to alter the scope of the bill.

As I discussed earlier this year, there appeared to be a deal at the Senate that would have amended the voluntary disclosure provision. However, a voting snafu by Liberal Senators left the provision intact. With the bill headed to committee before second reading, changes seem likely. During the abbreviated Senate hearings, there were calls for changes to the voluntary disclosure rules, increased Privacy Commissioner powers, and strengthened data breach rules.

That said, industry groups have also been lobbying for changes, including limitations to reforms to consent and opposition to tough measures on security breach rules. Indeed, it is unclear whether the government plans to use the committee process to strengthen or weaken its own privacy bill, but the procedural maneuver is sure to lead to increased lobbying and requests to appear before the Industry committee once hearings on S-4 begin. Moreover, it is possible the changes are linked to forthcoming anti-terrorism legislation. For Canadians concerned about the state of private sector privacy law, now is the time to speak out to ensure that the bill toughens privacy enforcement, is not used to perversely increase surveillance, and removes provisions that could undermine privacy protections.

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Broadcaster Copyright Misuse and Collusion?: Why Criticism Over the Government’s Political Ad Copyright Exception May Be Pointed in the Wrong Direction

Michael Geist - Tue, 10/14/2014 - 06:25

The Canadian Thanksgiving weekend featured escalating rhetoric over the government’s proposed copyright exception for political advertising with claims of fascism, censorship, expropriation, and more. The commentary bears almost no relationship to reality. The truth is that the government and the broadcasters both agree that the current law already permits use without authorization. For all the claims of “theft”, the copyright owner (broadcasters) and user (political parties) both agree that the works can be used without further permission or payment. As Ariel Katz points out this morning, the bigger issue may well be whether Canada’s broadcasters violated the Competition Act by conspiring to not air perfectly lawful political advertisements.

I wrote about the controversy in my weekly technology law column (Toronto Star version, homepage version), but the debate can be boiled down to three issues.

First, it is important to emphasize again that fair dealing under copyright already permits use of many broadcaster clips without the need for further permission. While the scope of fair dealing is not unlimited, the broad approach dictated by the Supreme Court of Canada means that many uses are already permitted under the law. Therefore, the claims of co-opting broadcasters, theft, and risks to press freedom are simply wrong.

Second, the proposed change is problematic, but not because it creates a political advertising exception. The exception may be of limited value, but the problem lies in the inequitable policy of creating two tiers of rights for political speech. As currently crafted, the exception would only apply to political parties, politicians, candidates, and their agents. The creation of an exception that only allows a select few to benefit is not a provision that can be defended on freedom of political speech grounds. If the government is convinced that stronger protection for political speech is needed, there are far better options, namely a full fair use provision or the inclusion of political speech as a fair dealing purpose that would be available to all.

Third, the entire strategy is rather puzzling since the proposed exception does not address the underlying issue: broadcasters are now refusing to air legal advertisements from political parties. Documents obtained by others under the Access to Information Act reveal that the CBC was the instigator behind the April 2014 warning letter to all political parties that the broadcasters wold not accept political advertisements using their content without express authorization. The email trail reveals that the CBC recognized that it could not reject the advertisements on copyright grounds. Instead, the broadcasters conspired to adopt a policy to reject the ads anyway, an approach that smacks of copyright misuse and a potential Competition Act violation.

The odd thing is that the proposed copyright exception would have little impact on the broadcaster policy. The legal change would not require broadcasters to air the advertisements and since the decision to refuse to air is presumably not grounded in copyright law, the change would not alter the broadcaster position. The entire episode ultimately raises troubling questions about why the CBC was pursuing efforts to limit legal uses of its work (I’ve argued it should open up its content for wider use), why the government is bothering with a provision that does not solve its concern, and perhaps most importantly, why has there been so little focus on a broadcaster policy to refuse to air political advertisements that by their own admission are perfectly legal.

The post Broadcaster Copyright Misuse and Collusion?: Why Criticism Over the Government’s Political Ad Copyright Exception May Be Pointed in the Wrong Direction appeared first on Michael Geist.

Political Attack Ads May Be Noxious, but Copyright Isn’t the Right Tool to Stop Them

Michael Geist - Tue, 10/14/2014 - 06:15

Appeared in the Toronto Star on October 11, 2014 as Federal Proposal to Loosen Copyright Law for Political Advertising Falls Flat

Reports surfaced last week that the federal government plans to introduce a new copyright exception for political advertising within a forthcoming budget bill. The provision would allow politicians and political parties to use news content in their political advertising without prior permission.

While the revelations sparked an angry outcry from media organizations and political opponents, the real problem is the potential for copyright to stifle legitimate speech. Political speech – even noxious attack ads – surely qualifies as important speech that merits protection.
Unfortunately, the government’s plans to create two classes of rights when it comes to political speech: one for politicians and political parties, and the other for everyone else.

Canadian law already features many copyright exceptions, most notably a fair dealing exception that covers a broad range of purposes including research, private study, education, news reporting, criticism, and review. In 2012, the Supreme Court of Canada strongly affirmed the need for large and liberal interpretation of fair dealing (which it views as “user’s right”) which would allow for a fairly good argument that at least some political uses qualify as fair dealing for the purposes of criticism.

Media organizations regularly rely on fair dealing for news reporting purposes to allow for the use of materials in print and video reports without permission from the copyright holder. For example, in 2013, the CBC ombudsperson rejected a complaint over the use of materials in a news report without permission, citing fair dealing.

This particular proposal appears to have been triggered by a warning earlier this year from Canadian broadcasters to the political parties advising that they would not air advertisements (unless required to do so by election law) containing their video footage without authorization.

In light of those warnings, better protection for political speech is a reasonable objective. The proposal would grant new rights to political parties for the use of news reports, subject to several limitations. The rules would not apply to documentaries, fictional works, and most music or photographs. Moreover, it could not be used for fundraising purposes. Ironically, the government acknowledges that news reports under a digital lock could not be circumvented, demonstrating how the overbroad digital lock rules contained in the last copyright bill negatively affect speech rights.

Despite those limitations, the government’s proposal falls flat on several fronts.

First, the process of incorporating copyright reforms in an omnibus budget bill raises serious concerns about the prospect for expert study and debate. Moreover, it vaults the political parties’ copyright concerns to the very front of the line, leaving issues such as new international protections for the blind and visually impaired on the backburner.

Second, the government could simply rely on existing law. With a robust fair dealing provision and a cap on liability for non-commercial infringement, the risk of an infringement claim is low.  This proposal may be a solution in search of a problem and the government would do better to test the boundaries of the current law rather than bury an exception in a budget bill.

Third, if the government is convinced that fair dealing does not fully cover political speech, the far better approach would be to establish a full fair use provision in Canada. Fair use offers the benefits of applying in all circumstances (not just political advertising) and would be available to all users (not just political parties and candidates). Moreover, it would ensure that usage would be subject to a fairness analysis, which this exception does not appear to do.

Fourth, if the government sticks with its current proposal it should be expanded to safeguard the political speech rights of all Canadians. As currently crafted, it would only apply to political parties, politicians, candidates, and their agents. The creation of an exception that only allows a select few to benefit is not a provision that can be defended on freedom of political speech grounds.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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The Government’s Political Advertising Copyright Exception: Fine Print Shows Proposal Privileges Politicians’ Speech Rights Over the Public

Michael Geist - Thu, 10/09/2014 - 08:29

Last night I posted on reports that the Canadian government is considering a new copyright exception for political advertising.  While many have been harshly critical of the plans, I’ve noted that political speech is critically important and that copyright law should not be used to stifle it.  My post argues that the law may already cover some of the uses and that if changes are needed, a better approach would be to adopt a fair use provision in Canada.

I have now obtained a copy of the document that was presented by the Minister of Canadian Heritage. The document is obviously consistent with the media reports, but provides significantly more detail and raises several additional questions and concerns.

First, the proposal is very narrow. It would only apply to political parties, politicians, candidates, and their agents. The creation of an exception that only allows a select few to benefit is not a provision that can be defended on freedom of political speech grounds. We are all entitled to exercise our political speech rights. A new exception that guards against copyright stifling such speech should apply to all.

Second, there are many exclusions from the content that qualifies for the exception. It does not apply to documentaries, fictional works, and most music or photographs. Moreover, it cannot be used for fundraising purposes and moral rights still apply (though most journalists may have waived their moral rights and corporations don’t hold such rights). Ironically, the government acknowledges that news reports that under a digital lock could not be circumvented under the provision, demonstrating how the overbroad digital lock rules contained in the last copyright bill negatively affect speech rights.

Third, the document anticipates the likely reactions, ranging from anger from news organizations to users seeking a broader approach. With respect to the news organization reaction, it is worth remembering that those organizations rely on copyright exceptions everyday. For example, the CBC ombuds last year rejected a complaint on the use of copyright works without permission on fair dealing grounds.

At this stage, it is unclear whether the proposal will be included in an omnibus budget bill.  If it is, there will be legitimate criticisms about the process and the substance of a proposal that privileges the free speech rights of politicians and political parties over millions of Canadians.

The post The Government’s Political Advertising Copyright Exception: Fine Print Shows Proposal Privileges Politicians’ Speech Rights Over the Public appeared first on Michael Geist.

Why Isn’t Fair Dealing Enough?: Government Considering Copyright Exception to Cover Political Advertising

Michael Geist - Wed, 10/08/2014 - 20:23

Reports from CTV and the Globe and Mail indicate that the government is planning to introduce a new copyright exception for political advertising. The reports suggest that the exception would permit the use of news content in political advertising without authorization provided that it meets three conditions:

News content would have to meet three criteria for this exemption, the cabinet memo says. It would have to be published or made available through TV broadcasts or platforms such as YouTube. It would have to be obtained from a news source such as a news program or newspaper or periodical. And it would have to feature a political actor operating in that person’s capacity as a politician, or relate to a political issue.

While the reports sparked an immediate reaction claiming the government is legalizing theft, my view is that copyright law should not be used to stifle legitimate speech. Political speech – even noxious attack ads – surely qualifies as important speech that merits protection (see this CDT analysis for similar concerns in the US). I am not a fan of attack ads, but attempts to use copyright to claim absolute rights over the use of a portion of a video clip is surely counter to basic principles of fair dealing (in Canada) or fair use.

This issue arose in 2011 when the CBC objected to the use of its footage in some Conservative ads and the party claimed fair use. More recently, Canada’s broadcasters have said they will not air advertisements containing their footage without authorization. I blogged in 2011 that the problem was that Canada’s fair dealing provision was unduly restrictive and that it might not cover the use of the video clips. Since the 2011 incident, the Supreme Court of Canada has strongly affirmed the need for large and liberal interpretation of fair dealing (which it views as “user’s right”) which would allow for a fairly good argument that at least some uses qualify as fair dealing for the purposes of criticism. Whether the actual use of the clip or footage is fair dealing would depend on meeting one of the law’s stated purposes and an analysis of the Court’s six-step test that includes considerations such as the character of the dealing, how much of the work is used, the alternatives available, and the effect of the dealing on the work.

My criticism of the government here is not in seeking to protect political speech by ensuring that the law features sufficient flexibility to allow for appropriate uses without permission. Rather, it stems from the view that there are far better policy approaches available than an awkward self-interested exception.

As a starting point, I think the government should simply rely on existing law. With a robust fair dealing provision and a cap on liability for non-commercial infringement, the risk of an infringement claim is low.  This proposal may be a solution in search of a problem and we would do better to test the boundaries of the current law rather than bury an exception in a budget bill.

Alternatively, if the government is convinced that fair dealing does not fully cover political speech, the far better approach would be to establish a full fair use provision in Canada. A fair use provision offers the benefits of applying in all circumstances (not just political advertising) and would be available to all users (not just political parties and candidates). Moreover, it would ensure that usage would be subject to a fairness analysis, which this exception does not appear to do.

There were many groups that argued for a fair use provision during the last round of copyright reform and the government’s acknowledgement that there are still speech-stifling restrictions suggests that it has seen first hand how such a provision would be useful. A simple amendment in the current Copyright Act that would make the list of fair dealing purposes illustrative rather than exhaustive (the so-called “such as” reform) would open the door to fair dealing claims involving political advertising without the accompany outcry of self-interest or unfairness that even the government anticipates will arise from its plans.

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It’s Time to Be Honest: Netflix Will Not Mean the End of Canadian Television

Michael Geist - Wed, 10/08/2014 - 05:12

The Globe and Mail’s Simon Houpt ran a column over the weekend titled It’s Time to be Honest: Netflix is Parasitic. The piece received some positive commentary on Twitter, with some suggesting that it provided a counter-view to the Netflix support that has prevailed publicly and politically for several weeks in Canada. Houpt uses some effective imagery (Netflix as a Wal-Mart or Costco behemoth that will lay waste to Canadian film producers in the same way that the retail giants take out “mom and pop” stores), but this post argues that he does not come close to making his case.

The Netflix backlash (also found in Globe pieces from Kate Taylor and John Doyle) can be distilled down to two key concerns. First, that Netflix only produces a limited amount of original content and merely selling access to a large library will gradually mean no new content. Second, that Netflix (unlike the conventional broadcasters) does not contribute to the creation of original Canadian programming and the erosion of that support will lead to the end of new Canadian content. This second concern lies at the heart of the calls for a mandatory contribution by Netflix (referred to by some as a Netflix tax).

I address each of these concerns below, but start by noting that though Netflix is the current market leader, there is every reason to believe that there will be other major players in the video streaming market. In the U.S., Hulu and Amazon Prime already offer large libraries of content, while Showmi (from Rogers and Shaw) is set to launch in Canada later this fall.  While some of the online video services are tethered to a cable or satellite subscription, true independent online video services should continue to grow and so long as they offer good value for money, consumers may subscribe to more than one service. This suggests a competitive online video market that competes for both subscribers and content.

That competition is the reason that online streaming services are likely to increase the amount of original content created, not decrease it. Companies like Netflix are funding their own original content (House of Cards, Orange is the New Black) and extending older series that started on conventional television (Arrested Development, Trailer Park Boys), but the bigger source of revenue for new series is that streaming video services will compete for the right to add them to their libraries for streaming purposes. Streaming rights are reportedly selling for as much as $750,000 per episode for top shows, with executives describing it as the “defacto domestic syndication window.”

In other words, shows that might have previously been cancelled or not made due to financial concerns (particularly that the show might not make it to syndication, which often represents a major source of revenue), are now relying on streaming revenue to provide a guaranteed source of income. In fact, this article shows how a combination of streaming revenues, tax breaks, and international sales covered the full production cost of a $3 million per episode show without any advertising revenues. This experience is not limited to U.S. shows. The same article points to Vikings, a Canadian-Irish production that generated significant revenues from streaming deals in Germany and the U.K.  The opportunities presented by streaming revenues should excite television producers because there is the potential for a broader array of content (the limits imposed by a broadcaster’s need to fill a schedule are gone) and public interest will be invariably linked to commercial success (make stuff people want to see and streaming companies will pay).

Even with some Canadian success stories, however, critics will still argue that without financial contributions toward the creation of Canadian content from companies like Netflix, Canadian content will disappear, leaving nothing to license to streaming companies. Yet a closer look at the numbers suggests that Canadian productions will continue with or without a Netflix contribution. The data shows that the Netflix contribution would be insignificant relative to the existing financing of Canadian productions. In fact, the largest single source of financing remains the public, which pays for the creation of Canadian content through tax credits and direct government contributions.

Houpt says that Netflix generates $300 million per year from Canadians. Leaving aside the objections to a Netflix tax (online video is not broadcasting, jurisdictional questions about links to Canada, Netflix being unable to benefit from the contribution), assume that online video services are required to contribute at the same five percent rate as the regulated industry. The $300 million in revenue amounts to a $15 million contribution from Netflix.

Would $15 million alter the economics of the Canadian television production industry?

Not even close.

The Canadian Media Fund, the recipient of the contributions, reports revenues of $365 million in its last financial statement (roughly 2/3 from the industry contributions and 1/3 from the government). In other words, the Netflix contribution would be roughly 4 percent of CMF’s annual revenues. That is pretty minor, but CMF itself is only a small part of the overall source of funding for Canadian productions.

The Canadian Media Production Association provides detailed data on the industry in annual economic report. The latest report indicates that spending on Canadian television production amounted to $2.32 billion in its latest year. As the chart below notes, the CMF funding constituted 13% of the total financial cost. Far more important sources of funding come from broadcaster licence fees and the public in the form of federal and provincial tax credits. In fact, the combination of tax credits and the government contribution to CMF means that the taxpayer remains the largest source of financing for Canadian productions.

CMPA, Profile 2013, http://www.cmpa.ca/sites/default/files/documents/industry-information/profile/Profile2013Eng.pdf

 

Taken together, a Netflix contribution of $15 million is only 4% of CMF funding, which itself amounts to only 13% of total television production financing (and the broadcast distributor contribution is roughly 2/3 of the CMF funding or just over 8% of the total financing). The total value of the Netflix contribution to a $2.3 billion industry: 0.6 of 1%. Of course, that is only the “lost” financial contribution and does not factor in the benefits that come from Netflix funded productions (such as Trailer Park Boys) nor the increased value of productions that come from licensing streaming rights.

Yet somehow the absence of less than one percent of funding spells the end of Canadian productions and renders Netflix a “parasitic” enterprise? Hardly. Even if the market grows dramatically – perhaps tripling in size with Netflix and other foreign competitors generating a billion a year – the overall effect on lost contributions to Canadian productions will remain tiny relative to the total expenditures that come from public dollars, licensing fees, and investment from producers.

Houpt concludes by arguing that it is worth having a conversation about the future of television and broadcasting in Canada and the role of Netflix. I agree and would argue that the public outcry against the CRTC’s threat to impose new regulations on Netflix is part of that discussion as is the economic data that points to a multi-billion dollar industry that will not rise or fall based on handouts from online video services.

The post It’s Time to Be Honest: Netflix Will Not Mean the End of Canadian Television appeared first on Michael Geist.

The Canadian Wireless Market and the Big 3: It’s Always Been a Matter of Trust

Michael Geist - Mon, 10/06/2014 - 06:27

Fresh off the contentious hearing on the future of television regulation, the Canadian Radio-television and Telecommunications Commission jumped back into the fire last week with a hearing on the wireless market that focused on whether changes are needed to the wholesale market to improve competition.

The Big 3 – Bell, Telus, and Rogers – unsurprisingly opposed new measures, arguing that the Commission should reject the Competition Bureau’s independent finding that there are competition concerns along with the smaller players and consumer groups that support new regulations. Instead, they argue that Canadians can trust that the market is already competitive and that reforms would reduce investment and harm the quality of the networks.

My weekly technology law column (Toronto Star version, homepage version) notes that if that message evokes a sense of déjà vu, perhaps that is because it is seemingly always a matter of trust when it comes to Canadian wireless services.

Trust us, said the Canadian Wireless Telecommunications Commission in 2000, when concerns were raised about marketplace competition. “The Canadian wireless market has been competitive from the outset,” assured the industry association.

Trust us, said Rogers Wireless Communications in 2004 as it made the case for merging with Microcell and reducing the number of major wireless competitors from four to three. The merger would leave Canada with only one GSM provider, but it will not substantially lessen or prevent competition, the company claimed.

Trust us, said the wireless carriers in 2006 as the then-new Conservative government acquiesced to telecom lobbying by introducing a new policy direction for the CRTC to rely on market forces to the maximum extent feasible. The directive has been invoked each time the CRTC considers new regulatory measures.

Trust us, said the wireless carriers in 2007 when the government began considering a spectrum set-aside to allow for new entrants into the marketplace. Telus maintained that there is no need for a set-aside in “vigorously competitive” market, while Rogers characterized the new entrants as “all-time corporate welfare bums.”

Trust us, said the wireless providers in 2008 when the government considered rules such as tower sharing and domestic roaming agreements alongside the new entrant spectrum set-aside. The companies argued that there was no need for the policy measures, which it said were contrary to reliance on market forces. In 2014, the CRTC concluded that Rogers had for years included unfair clauses in their domestic roaming agreements.

Trust us, said Bell in 2010 when it argued against relaxing foreign investment restrictions in the telecommunications market. The company claimed that there was no problem accessing foreign capital and no need for reforms based on “ill-defined problems.”

Trust us, said the wireless carriers, when concerns about unfair marketing were raised. In 2010, the CRTC settled a major do-not-call case against Bell, with the company agreeing to pay $1.3 million over unauthorized telemarketing calls from independent providers selling Bell services.

Trust us, said the CWTA as provinces began in 2011 to introduce enforceable consumer protection codes for wireless services. A non-binding code of conduct is sufficient, it argued. By 2013, the CRTC had created a national wireless code in response to consumer frustration with lengthy contracts and locked phones.

Trust us, said the wireless carriers, when eyebrows were raised over advertising claims. In 2010, the Competition Bureau brought an action against Rogers over its advertising which led to a federal court ruling that ordered the company to pay $500,000 in penalties over the failure to perform adequate testing to substantiate its claims. Meanwhile, Bell paid a $10 million penalty to the Competition Bureau for misleading advertising in 2011.

Trust us, said the wireless companies when privacy advocates raised fears about the collection and use of customer information. In 2013, the Privacy Commissioner of Canada experienced a major increase in complaints, largely attributed to Bell’s customer monitoring and profiling habits.

For years, the Big 3 have used the same message to consistently oppose new measures aimed at fostering greater competition. With Canadian wireless prices still among the highest in the G7, Canadian consumers hope they can trust the government and CRTC to take action.

The post The Canadian Wireless Market and the Big 3: It’s Always Been a Matter of Trust appeared first on Michael Geist.

The Canadian Wireless Market and the Big 3: It’s Always Been a Matter of Trust

Michael Geist - Mon, 10/06/2014 - 06:13

Appeared in the Toronto Star on October 3, 2014 as Wireless Industry’s Tired ‘Trust Us’ Argument

Fresh off the contentious hearing on the future of television regulation, the Canadian Radio-television and Telecommunications Commission jumped back into the fire last week with a hearing on the wireless market that focused on whether changes are needed to the wholesale market to improve competition.

The Big 3 – Bell, Telus, and Rogers – unsurprisingly oppose new measures, arguing that the Commission should reject the Competition Bureau’s independent finding that there are competition concerns along with the smaller players and consumer groups that support new regulations. Instead, they argue that Canadians can trust that the market is already competitive and that reforms would reduce investment and harm the quality of the networks.

If that message evokes a sense of déjà vu, perhaps that is because it is seemingly always a matter of trust when it comes to Canadian wireless services.

Trust us, said the Canadian Wireless Telecommunications Commission in 2000, when concerns were raised about marketplace competition. “The Canadian wireless market has been competitive from the outset,” assured the industry association.

Trust us, said Rogers Wireless Communications in 2004 as it made the case for merging with Microcell and reducing the number of major wireless competitors from four to three. The merger would leave Canada with only one GSM provider, but it will not substantially lessen or prevent competition, the company claimed.

Trust us, said the wireless carriers in 2006 as the then-new Conservative government acquiesced to telecom lobbying by introducing a new policy direction for the CRTC to rely on market forces to the maximum extent feasible. The directive has been invoked each time the CRTC considers new regulatory measures.

Trust us, said the wireless carriers in 2007 when the government began considering a spectrum set-aside to allow for new entrants into the marketplace. Telus maintained that there is no need for a set-aside in “vigorously competitive” market, while Rogers characterized the new entrants as “all-time corporate welfare bums.”

Trust us, said the wireless providers in 2008 when the government considered rules such as tower sharing and domestic roaming agreements alongside the new entrant spectrum set-aside. The companies argued that there was no need for the policy measures, which it said were contrary to reliance on market forces. In 2014, the CRTC concluded that Rogers had for years included unfair clauses in their domestic roaming agreements.

Trust us, said Bell in 2010 when it argued against relaxing foreign investment restrictions in the telecommunications market. The company claimed that there was no problem accessing foreign capital and no need for reforms based on “ill-defined problems.”

Trust us, said the wireless carriers, when concerns about unfair marketing were raised. In 2010, the CRTC settled a major do-not-call case against Bell, with the company agreeing to pay $1.3 million over unauthorized telemarketing calls from independent providers selling Bell services.

Trust us, said the CWTA as provinces began in 2011 to introduce enforceable consumer protection codes for wireless services. A non-binding code of conduct is sufficient, it argued. By 2013, the CRTC had created a national wireless code in response to consumer frustration with lengthy contracts and locked phones.

Trust us, said the wireless carriers, when eyebrows were raised over advertising claims. In 2010, the Competition Bureau brought an action against Rogers over its advertising which led to a federal court ruling that ordered the company to pay $500,000 in penalties over the failure to perform adequate testing to substantiate its claims. Meanwhile, Bell paid a $10 million penalty to the Competition Bureau for misleading advertising in 2011.

Trust us, said the wireless companies when privacy advocates raised fears about the collection and use of customer information. In 2013, the Privacy Commissioner of Canada experienced a major increase in complaints, largely attributed to Bell’s customer monitoring and profiling habits.

For years, the Big 3 have used the same message to consistently oppose new measures aimed at fostering greater competition. With Canadian wireless prices still among the highest in the G7, Canadian consumers hope they can trust the government and CRTC to take action.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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Government Goes for the “Head in the Sand” Approach on Voluntary Warrantless Disclosures

Michael Geist - Thu, 10/02/2014 - 08:58

In the aftermath of the Supreme Court of Canada’s Spencer decision, I argued that the decision upholding the reasonable expectation of privacy in subscriber information contradicted the government’s claims supporting Bills C-13 and S-4, leaving the government’s lawful access strategy in tatters. I noted that it faced a choice:

The Canadian government could adopt the “bury our heads in the sand approach” by leaving the provision unchanged, knowing that it will be unused or subject to challenge. That would run counter to the spirit of the Supreme Court ruling, however, and do nothing to assist law enforcement.

Yesterday, the government did just that, as Bill C-13 passed another legislative hurdle with the reported committee version of the bill was approved by the House. During the debate, the government insisted that the legislation is consistent with the Spencer decision. While it is true that the voluntary warrantless disclosure provision does not directly contradict the Spencer decision, the reality is that it has been rendered largely moot. In other words, the government is touting a legislative solution to assist law enforcement that the police will not use and that telecom companies will ignore.

The government has been trying for years to make it easier for law enforcement to obtain subscriber data and has been foiled at pretty much every turn. Early versions of lawful access bills included a wide range of subscriber information data that would have been required to be disclosed without a warrant.  Later bills dropped some of the data points and following the Vic Toews’ debacle, eliminated mandatory warrantless disclosure altogether.

Bill C-13 shifted to voluntary warrantless disclosure by granting legal immunity for such disclosures, but the Spencer decision eliminates the utility of voluntary disclosure in most circumstances. Indeed, most major telecom providers now say they require a warrant and the Department of Defence has indicated that it has changed its policy on subscriber requests in light of the Spencer decision since it will now seek judicial authorization for all requests.

The government seemed to admit the very limited scope of the provision during an earlier House of Commons debate, when Conservative MP Bob Dechert stated:

In R. v. Spencer, the court expanded the privacy protections afforded to information related to an Internet protocol, or IP, address in certain circumstances, thereby taking this information out of the realm of information that can be provided voluntarily. However, the court did not suggest that voluntary disclosures were now impermissible. Rather, it held that voluntary assistance could still be provided in exigent circumstances, or pursuant to a reasonable law, or where there is no reasonable expectation of privacy. This clearly leaves scope for permissible voluntary assistance and provision of information without judicial pre-authorization. Since the R. v. Spencer decision still allows for voluntary assistance to police in those circumstances, the clarification and the protection from immunity contained an existing subsection 487.014(2) and proposed subsection 487.0195(2) are still needed.

In other words, the government now justifies a blanket immunity on the basis of voluntary disclosures in emergency circumstances. Since no one disputes that there can disclosures in emergency circumstances, immunity from liability is largely irrelevant.

The government should amend the bill to reflect the narrow scope and acknowledge the impact of Spencer on the law. Its preference for the “bury its head in the sand” approach leaves it looking out-of-touch with respect to privacy law, while fighting for a provision that does not assist law enforcement.

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Ontario Government Soft Pedals Netflix & Google Regulation, But Record Speaks For Itself

Michael Geist - Tue, 09/09/2014 - 06:30

As CRTC Chair Jean-Pierre Blais anticipated, the Government of Ontario’s call for regulation of online video services attracted considerable attention, including comments from Canadian Heritage Minister Shelly Glover roundly dismissing the possibility. Glover stated:

“We will not allow any moves to impose new regulations and taxes on internet video that would create a Netflix and Youtube Tax.”

Last night, I received an email from a spokesperson for Ontario Minister of Tourism, Culture and Sport Michael Coteau that tried to soften the call for online video regulation. The spokesperson stated:

“The presentation today provided important elements for CRTC consideration as it undertakes its review. The government is not advocating for any CanCon changes, or that any specific regulations be imposed on new media TV, until more evidence is available.”

I asked for clarification on what “more evidence” means. The spokesperson responded that there will be over 100 presentations at the CRTC hearing and that all need to be heard from before moving forward.

Yet a review of the Ontario government submission to the CRTC and its prepared remarks yesterday make it clear that the government strongly supported immediate regulatory reforms and that the need for “evidence” is actually a reference to revenue thresholds that would trigger mandatory payments by foreign online video providers.

The Ontario government submission to the CRTC provides a detailed vision of regulating online video providers. It recommends that the CRTC immediately put in place “thresholds and performance measures” that would “permit the future imposition of new media TV system Cancon financial obligations.” It envisions thresholds based on the number of subscribers or subscription revenues with the goal of imposing financial obligations once a certain number is achieved.

The same submission explains why the government believes that only foreign online video providers should face these obligations (it would exempt domestic providers), noting:

Regulating foreign OTT providers with respect to Cancon would result in more symmetrical regulation, and in a significantly greater contribution to the Canadian broadcasting system with respect to Cancon (spending and broadcasting). Not expanding regulatory supports for foreign OTT providers could thwart continued growth and development of Canadian new media industries, thereby impeding achievement of broadcasting policy objectives, especially production of original/first-run made-for-new media and TV programming.

Those do not appear to be the words of a government waiting to hear from other witnesses. In fact, yesterday’s prepared remarks included the following:

“The ministry recommends that the CRTC put thresholds in place now that would permit future Cancon financial obligations for foreign over-the-top providers, as soon as the evidence warrants.”

When combined with the government’s full submission, it becomes clear that the “evidence” is a reference to foreign online providers hitting the thresholds, not the comments of other presenters.  Moreover, the call for creating thresholds now would itself involve the creation of new regulations.

The post Ontario Government Soft Pedals Netflix & Google Regulation, But Record Speaks For Itself appeared first on Michael Geist.

Ontario Government Asks the CRTC To Impose New Regulations and Fees on Internet Giants Such as Netflix and Google

Michael Geist - Mon, 09/08/2014 - 11:26

This afternoon, the Ontario government appeared before the CRTC as part of its future of television hearing. The Ontario government issued a clear call for new regulation of so-called new media companies such as Netflix and Google. The government states:

In order to create a more level playing field, the ministry recommends decreasing this regulatory imbalance. The ministry believes the best way to accomplish this is to expand the regulation of new media TV, rather than by lightening the current regulation of traditional TV.

What does the expansion of regulation involve?

For the Ontario government, it includes regulating foreign online video services. The Ontario government wants the CRTC to impose Canadian content obligations on the foreign providers, though interestingly it recommends exempting Canadian online video providers. The recommended regulations would include reporting requirements on all revenues and financial contributions to Cancon production once the services reach a certain size.

In fact, the Ontario government says that if foreign operators do not face new regulations, the CRTC should consider “non-regulatory incentives” for financial contributions (it cites elimination of data caps for some online video providers as an example, though acknowledges that such an approach may violate net neutrality rules).

The post Ontario Government Asks the CRTC To Impose New Regulations and Fees on Internet Giants Such as Netflix and Google appeared first on Michael Geist.

The CRTC’s Future of TV Hearing: “There is No Such Thing as Too Much Choice”

Michael Geist - Mon, 09/08/2014 - 05:56

Rogers Communications unveiled its plan for streaming more than 1,000 National Hockey League games on the Internet last week. Having invested billions of dollars to obtain the Canadian broadcast and Internet rights to NHL hockey, the cable giant pointed to the future of broadcast by embracing consumer demand for making games available online.

As part of the launch, Rogers Media president Keith Pelley responded to questions about the approach by stating “there’s no such thing as too much choice. Let the consumer decide what they want to watch.” Pelley was speaking about hockey streaming, but my weekly technology law column (Toronto Star version, homepage version) notes his comments should resonate loudly this week in a broader context as the Canadian Radio-television and Telecommunications Commission opens its much-anticipated public hearing on the future of television in Canada.

The CRTC hearing has already generated thousands of advance comments from major stakeholders and individual Canadians. It has also unleashed considerable angst from established broadcasters, broadcast distributors, and content creators, who fear that the broadcast regulator will overhaul the current system by implementing changes such as mandatory pick-and-pay channel selection for consumers and reforms to longstanding policies such as simultaneous substitution (which allows Canadian broadcasters to substitute Canadian commercials into U.S. licensed programming).

In fact, the CRTC has left little doubt that change is on the way. In a working document released late last month, it narrowed the likely outcomes to include requiring a mandatory basic cable service at a fixed cost (as low as $20 per month), a mandated pick-and-pay system that would allow consumers to select individual channels rather than being bound by unwanted packages, and the gradual elimination of simultaneous substitution.

While these changes are likely to spur a barrage of horror stories and dire warnings throughout the hearing – broadcasters will claim that the pick-and-pay will effectively kill some unpopular channels and broadcast distributors will warn that increased choice will lead to higher prices – the Rogers hockey streaming announcement signals most of what Canadians really need to know.

First, the CRTC is not forecasting the future of television as much as it is catching up to today’s reality. A broadcast regulatory system premised on limited consumer choice and scarce airwaves has given way to virtually unlimited options and an abundance of delivery mechanisms. With Rogers able to offer nearly the entire NHL season on the Internet, the conventional broadcast system already faces enormous competitive challenges. If the established system does not offer consumers sufficient flexibility and choice, they will go elsewhere.

Second, the Rogers announcement reinforces the importance of existing regulations designed to foster competition online.  The company noted that its package would be available to all Canadians, regardless of which cable or wireless provider they use. The broad availability of the service can be attributed both to the economic benefits of selling to a bigger market and to regulatory rules that restrict vertically integrated companies from granting themselves undue preferences.

Moreover, Rogers acknowledged that data used by its wireless customers to stream hockey games would count against their monthly cap. That approach reflects the need to conform to Canada’s net neutrality rules that are designed to maintain a level playing field and represents an about-face from an earlier television streaming service.

Third, as Pelley noted, there is no such thing as too much consumer choice when it comes to the options to watch programs when, where, and on what device Canadians want. The Canadian broadcast regulatory system has long benefited channels with limited viewership and broadcast distributors who forced consumers to purchase unpopular channels as part of expensive packages.

The CRTC hearing is ultimately about shifting away from that model by providing consumers with more choice. That change should force broadcasters to improve their products and broadcast distributors to offer competitively priced services. As the Rogers approach to streaming hockey demonstrates, if they fail to do so, consumers now have other options.

The post The CRTC’s Future of TV Hearing: “There is No Such Thing as Too Much Choice” appeared first on Michael Geist.

“There is No Such Thing as Too Much Choice”

Michael Geist - Mon, 09/08/2014 - 05:49

Appeared in the Toronto Star on September 6, 2014 as The Takeaway for the CRTC’s Future of TV Hearing

Rogers Communications unveiled its plan for streaming more than 1,000 National Hockey League games on the Internet last week. Having invested billions of dollars to obtain the Canadian broadcast and Internet rights to NHL hockey, the cable giant pointed to the future of broadcast by embracing consumer demand for making games available online.

As part of the launch, Rogers Media president Keith Pelley responded to questions about the approach by stating “there’s no such thing as too much choice. Let the consumer decide what they want to watch.” Pelley was speaking about hockey streaming, but his comments should resonate loudly this week in a broader context as the Canadian Radio-television and Telecommunications Commission opens its much-anticipated public hearing on the future of television in Canada.

The CRTC hearing has already generated thousands of advance comments from major stakeholders and individual Canadians. It has also unleashed considerable angst from established broadcasters, broadcast distributors, and content creators, who fear that the broadcast regulator will overhaul the current system by implementing changes such as mandatory pick-and-pay channel selection for consumers and reforms to longstanding policies such as simultaneous substitution (which allows Canadian broadcasters to substitute Canadian commercials into U.S. licensed programming).

In fact, the CRTC has left little doubt that change is on the way. In a working document released late last month, it narrowed the likely outcomes to include requiring a mandatory basic cable service at a fixed cost (as low as $20 per month), a mandated pick-and-pay system that would allow consumers to select individual channels rather than being bound by unwanted packages, and the gradual elimination of simultaneous substitution.

While these changes are likely to spur a barrage of horror stories and dire warnings throughout the hearing – broadcasters will claim that the pick-and-pay will effectively kill some unpopular channels and broadcast distributors will warn that increased choice will lead to higher prices – the Rogers hockey streaming announcement signals most of what Canadians really need to know.

First, the CRTC is not forecasting the future of television as much as it is catching up to today’s reality. A broadcast regulatory system premised on limited consumer choice and scarce airwaves has given way to virtually unlimited options and an abundance of delivery mechanisms. With Rogers able to offer nearly the entire NHL season on the Internet, the conventional broadcast system already faces enormous competitive challenges. If the established system does not offer consumers sufficient flexibility and choice, they will go elsewhere.

Second, the Rogers announcement reinforces the importance of existing regulations designed to foster competition online.  The company noted that its package would be available to all Canadians, regardless of which cable or wireless provider they use. The broad availability of the service can be attributed both to the economic benefits of selling to a bigger market and to regulatory rules that restrict vertically integrated companies from granting themselves undue preferences.

Moreover, Rogers acknowledged that data used by its wireless customers to stream hockey games would count against their monthly cap. That approach reflects the need to conform to Canada’s net neutrality rules that are designed to maintain a level playing field and represents an about-face from an earlier television streaming service.

Third, as Pelley noted, there is no such thing as too much consumer choice when it comes to the options to watch programs when, where, and on what device Canadians want. The Canadian broadcast regulatory system has long benefited channels with limited viewership and broadcast distributors who forced consumers to purchase unpopular channels as part of expensive packages.

The CRTC hearing is ultimately about shifting away from that model by providing consumers with more choice. That change should force broadcasters to improve their products and broadcast distributors to offer competitively priced services. As the Rogers approach to streaming hockey demonstrates, if they fail to do so, consumers now have other options.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post “There is No Such Thing as Too Much Choice” appeared first on Michael Geist.

Why U.S. Pressure Is Behind the Stalled Canadian Anti-Counterfeiting Bill

Michael Geist - Tue, 09/02/2014 - 06:52

Last year, the federal government trumpeted anti-counterfeiting legislation as a key priority. The bill raced through the legislative process in the winter and following some minor modifications after committee hearings, seemed set to pass through the House of Commons. Yet after committee approval, the bill suddenly stalled with little movement throughout the spring.

Why did a legislative priority with all-party approval seemingly grind to a halt?

My weekly technology law column (Toronto Star version, homepage version) suggests that the answer appears to stem from the appointment of Bruce Heyman as the new U.S. ambassador to Canada. During his appointment process, Heyman identified intellectual property issues as a top priority and as part of his first major speech as ambassador, singled out perceived shortcomings in the anti-counterfeiting bill.

Heyman’s primary concern relates to in-transit shipments, which involve goods that do not originate in Canada and are not destined to stay in Canada. The Canadian bill excludes in-transit shipments from the scope of new rules that grant customs agents unprecedented powers to seize suspect shipments without court oversight.

According to Heyman:

“We are pleased Canada has introduced legislation that will give its border officials the authority to seize pirated and counterfeit goods, but the United States is concerned because the bill does not apply to goods that are shipped through Canada, from a third country to the U.S.”

The Canadian position is based at least in part on serious concerns about misuse of in-transit seizures.  For example, in November 2008, Dutch customs agents seized a shipment of AIDS/HIV medications at Schiphol Airport near Amsterdam. The Nigeria-destined medications originated in India, which produced a generic version of abacavir, an anti-retroviral drug. The global health group UNITAID had purchased the 49 kilograms of abacavir with the Clinton Foundation scheduled to assist in their distribution once they reached Africa.

The seizure in the Netherlands came at the request of GlaxoSmithKline, the pharmaceutical giant that claimed the Indian drug violated its patent rights and contained counterfeit materials. UNITAID maintained that the drugs were not counterfeit, but the seizure dragged on for months.

The Dutch seizure was not an isolated incident. During 2008 and 2009, Doctors Without Borders found at least 19 shipments of generic medicines from India to other countries were impounded while in transit in Europe. Several years later, the Court of the European Justice ruled against in-transit seizures, concluding that there was no infringement in the EU.

While Dutch seizures of Africa-bound pharmaceutical drugs have little connection to Canada, the experience with in-transit seizures of generic pharmaceutical drugs provides an important cautionary tale of why countries are right to resist targeting shipments that do not originate domestically and are destined for a different country. Indeed, many groups maintain that the seizure of generic pharmaceuticals in transit would pose a threat to international trade, development and public welfare.

Despite the delay, there is little doubt that the anti-counterfeiting bill will ultimately become law. In fact, with some of the bill’s provisions included in the Canada – Europe trade agreement, there may soon be a treaty requirement to address border measures.

With the fall parliamentary session set to start in a few weeks, the emerging question is whether the government will continue to resist foreign lobbying to distort the balance in the bill, by maintaining both the in-transit shipment exclusion and a personal traveler exception, whose removal could lead to increased border searches of physical luggage and electronic devices. If amendments are made late in the legislative process, it may well be a case of caving yet again to unwarranted U.S. pressure on intellectual property laws.

The post Why U.S. Pressure Is Behind the Stalled Canadian Anti-Counterfeiting Bill appeared first on Michael Geist.

Why U.S. Pressure Is Behind the Stalled Canadian Anti-Counterfeiting Bill

Michael Geist - Tue, 09/02/2014 - 06:38

Appeared in the Toronto Star on August 30, 2104 as Why Dutch Guards Holding Indian-Made Drugs Bound for Nigeria Sends a Warning to Canadian Legislators

Last year, the federal government trumpeted anti-counterfeiting legislation as a key priority in its Speech from the Throne. The bill raced through the legislative process in the winter and following some minor modifications after committee hearings, seemed set to pass through the House of Commons. Yet after committee approval, the bill suddenly stalled with little movement throughout the spring.

Why did a legislative priority with all-party approval seemingly grind to a halt?

The answer appears to stem from the appointment of Bruce Heyman as the new U.S. ambassador to Canada. During his appointment process, Heyman identified intellectual property issues as a top priority and as part of his first major speech as ambassador, singled out perceived shortcomings in the anti-counterfeiting bill.

Heyman’s primary concern relates to in-transit shipments, which involve goods that do not originate in Canada and are not destined to stay in Canada. The Canadian bill excludes in-transit shipments from the scope of new rules that grant customs agents unprecedented powers to seize suspect shipments without court oversight.

According to Heyman:

“We are pleased Canada has introduced legislation that will give its border officials the authority to seize pirated and counterfeit goods, but the United States is concerned because the bill does not apply to goods that are shipped through Canada, from a third country to the U.S.”

The Canadian position is based at least in part on serious concerns about misuse of in-transit seizures.  For example, in November 2008, Dutch customs agents seized a shipment of AIDS/HIV medications at Schiphol Airport near Amsterdam. The Nigeria-destined medications originated in India, which produced a generic version of abacavir, an anti-retroviral drug. The global health group UNITAID had purchased the 49 kilograms of abacavir with the Clinton Foundation scheduled to assist in their distribution once they reached Africa.

The seizure in the Netherlands came at the request of GlaxoSmithKline, the pharmaceutical giant that claimed the Indian drug violated its patent rights and contained counterfeit materials. UNITAID maintained that the drugs were not counterfeit, but the seizure dragged on for months.

The Dutch seizure was not an isolated incident. During 2008 and 2009, Doctors Without Borders found at least 19 shipments of generic medicines from India to other countries were impounded while in transit in Europe. Several years later, the Court of the European Justice ruled against in-transit seizures, concluding that there was no infringement in the EU.

While Dutch seizures of Africa-bound pharmaceutical drugs have little connection to Canada, the experience with in-transit seizures of generic pharmaceutical drugs provides an important cautionary tale of why countries are right to resist targeting shipments that do not originate domestically and are destined for a different country. Indeed, many groups maintain that the seizure of generic pharmaceuticals in transit would pose a threat to international trade, development and public welfare.

Despite the delay, there is little doubt that the anti-counterfeiting bill will ultimately become law. In fact, with some of the bill’s provisions included in the Canada – Europe trade agreement, there may soon be a treaty requirement to address border measures.

With the fall parliamentary session set to start in a few weeks, the emerging question is whether the government will continue to resist foreign lobbying to distort the balance in the bill, by maintaining both the in-transit shipment exclusion and a personal traveler exception, whose removal could lead to increased border searches of physical luggage and electronic devices. If amendments are made late in the legislative process, it may well be a case of caving yet again to unwarranted U.S. pressure on intellectual property laws.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Why U.S. Pressure Is Behind the Stalled Canadian Anti-Counterfeiting Bill appeared first on Michael Geist.

BC Court Rules on Signing Away Your Reasonable Expectation of Privacy

Michael Geist - Wed, 08/27/2014 - 07:01

Canadian privacy law has long been reliant on the principle of “reasonable expectation of privacy.”  The principle is particularly important with respect to the Charter of Rights and Freedoms, as the Supreme Court of Canada has held that the right to be free from unreasonable search and seizure is grounded in a reasonable expectation of privacy in a free and democratic society.

The reasonable expectation of privacy standard provides a useful starting point for analysis, but the danger is that privacy rights can seemingly be lost with little more than a contractual provision indicating that the user has no privacy. Indeed, if privacy rights can disappear based on a sentence in a contract that few take the time to read (much less assess whether they are comfortable with), those rights stand on very shaky ground.

My weekly technology law column (Toronto Star version, homepage version) notes the limits of the reasonable expectation of privacy standard emerged in a recent British Columbia Court of Appeal case involving the search of a courier package that contained illegal drugs. The court rejected claims of an illegal search, concluding that the defendant had no reasonable expectation of privacy despite the fact that he had no commercial relationship with the courier company and had never agreed to, or even viewed, the terms of the contract.

The case, R. v. Godbout, involved the shipment of courier package from Calgary to Vancouver. The package looked from the outside like a child’s toy, but the customer service worker at the courier company was uncomfortable with the manner of the sender and decided to open the package, revealing both a toy and two bricks of drugs.  The police were contacted and after confirming the contents, arranged for a “controlled delivery” to Godbout, who was arrested after accepting and opening the package.

With strong evidence of illegal drugs, the only legal issue in the case was whether the opening, search, and seizure of the package was consistent with the Charter of Rights and Freedoms.  The court concluded that it was on the grounds that Godbout had no reasonable expectation of privacy.

The basis for that conclusion stemmed from the courier company’s contractual terms, which explicitly provided that “without notice, DHL may, at its sole discretion, open and inspect any shipment and its contents at any time. Customs authorities, or other governmental authorities, may also open and inspect any shipment and its contents at any time.”

That may sound clear-cut, but the problem is that Godbout was not a party to the contract. The sender may not have a reasonable expectation of privacy given the contractual terms, but should those terms also extend to the recipient who had not read or consented to them?

The court concluded that they should, ruling “the fact that the appellant may not have known of the terms of shipment does not make his subjective expectation objectively reasonable.”

The court seems to think that people know that courier packages are subject to inspection and therefore they should not expect any privacy in those packages. Yet it is difficult to reconcile an express acknowledgement that Godbout did not know the terms of the contract with the conclusion that he was nevertheless bound by them, particularly since this was a domestic shipment that would not typically involve customs agents or other authorities.

More broadly, the decision suggests that Canadians can lose their constitutional rights against illegal search and seizure on the basis of contractual terms to which they are not even a party. The court could have attempted to preserve privacy rights by concluding that the search was illegal but that the evidence was still admissible.  By upholding the legality of the search, however, it provided a troubling reminder about how Canadians should not expect much when it comes to the reasonable expectation of privacy standard.

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