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Telus Attacks: The Battle To Keep Verizon Out of Canada

Michael Geist - Fri, 07/19/2013 - 00:50
Telecom giant Telus has had an eventful week as it moves from claiming that Canada "really should be the most expensive country for wireless service in the OECD" to increasing its prices in the shift toward two-year contracts to now declaring war on the government's commitment to injecting greater competition into the Canadian marketplace. While the comments that something less than the highest prices in the developed world are a "great success story we should be celebrating" generated considerable media attention (here, here and here), the bigger long-term issue is the full-court lobbying press to stop the entrance of new competition.

Yesterday, Telus CEO Darren Entwistle was campaigning at the Globe and Mail and National Post, warning of a "bloodbath" if the government sticks with its commitment to allow for a set-aside of spectrum for new entrants such as Verizon. Telus is concerned that a set-aside would allow Verizon to purchase two of the four available blocks, leaving the big three to fight it out over the remaining two blocks. Telus emphasized its prior investments in arguing for a "level playing field" in the auction.

Yet to borrow Telus' phrase - "scratch the surface of their arguments and get to the facts" - and it becomes clear the fight is not about level playing fields since new entrants have been at a huge disadvantage for years in Canada. Indeed, even with a spectrum set-aside, there would not be a level playing field as companies such as Telus would have big advantages that include restrictions on foreign ownership for broadcast distribution (thereby blocking Verizon from offering similar bundled services), millions of subscribers locked into long term contracts, far more spectrum than Verizon would own, and its shared network with Bell that has saved both companies millions of dollars.


While the companies frame their arguments around level playing fields, the real goal is simply to keep competition out of the country.  For Verizon (or any major new entrants), a spectrum set-aside will be crucial since it is the only way to obtain sufficient spectrum (when combined with the existing spectrum from Wind Mobile and Mobilicity) to establish a viable fourth wireless network that could compete directly with the big three incumbents. If Telus gets their way, the removal of the set-aside would kill the government's stated goal of a viable fourth carrier since there would be little reason for Verizon to enter the country only to face many of the same disadvantages that has hamstrung the smaller new entrants. 

Moreover, if there is a sense of deja vu about the Telus arguments, it is because it made the same "level playing field" and big investment arguments back in 2007 to argue against a set-aside in that spectrum auction. For example, in June 2007 it stated (though notably on the same day it argued for a set-aside to address competition concerns arising from a proposed Bell - Telus merger):

We strongly believe that the competitive playing field should be free from government intervention so that companies can compete fairly for customers. Over the span of a few years, Telus evolved from a regional provider of wireless services in Alberta and B.C. to a leading national carrier. We accomplished this not by seeking regulatory benefits, but by investing more than $7 billion in a national wireless network that delivers advanced wireless services like mobile TV and satellite radio across the country.

In the early days of spectrum allocation, these same companies argued for a regulated approach to assist with their entry into the market. In 1984, the government allocated its first block of spectrum for wireless services, specifically reserving spectrum for Cantel (later Rogers), who benefited from no upfront payments and regulations that mandated that the incumbent providers could not provide service in a given region before Cantel established service there.  In 1995, the government again adopted a regulated approach to the allocation of spectrum for PCS services, setting aside spectrum for the two new entrants - Microcell and Clearnet - that are today owned by Rogers and Telus.

Make no mistake: the Telus lobbying campaign will be joined by Bell and Rogers as the three companies spend millions of dollars in advertising and lobbying to keep the Canadian market free from much needed competition (the Wire Report reports that ten board members each from Telus and BCE have registered to lobby the government on spectrum). The government has insisted that it will do whatever is necessary to ensure greater competition and consumer choice in the wireless sector.  The potential Verizon entry into Canada - undoubtedly conditioned on a spectrum set-aside - is precisely what is needed. In this case, sticking with its policy by siding with consumers and greater competition has the dual advantage of being both good policy and good politics.

Competition Not Contracts: The Real Reason Canadian Wireless Prices Are on the Rise

Michael Geist - Thu, 07/18/2013 - 04:43
This week, Telus and Bell announced new wireless pricing plans based on two-year contracts (Rogers has said their plans will be released shortly). Those plans - particularly those from Telus which seems to be taking its suggestion that Canada should be the most expensive wireless country seriously - feature higher prices, which some claim are the product of the shift from three-year contracts to what is effectively a two-year maximum under the new CRTC wireless code. The narrative behind these cost increases is that consumers are amortizing the cost of their device over a shorter period of time and therefore can expect higher monthly fees. This argument is perfect for the carriers as they get to blame the CRTC (and by extension, the Competition Bureau, consumer groups and consumers themselves) with an "I told you so" for the increased prices. Yet the higher costs are not strictly a function of shorter contracts, but rather a product of Canada's uncompetitive marketplace. 

Many other countries have two-year contracts with cheaper rates and bigger device subsidies. This is because consumer price is not primarily a function of contract length or device cost, but rather marketplace competition. For example, Spain's wireless pricing has been dropping in recent months as their four major carriers find consumers more aggressively shopping for better prices or cancelling their wireless services altogether. In response, all four Spanish carriers are dropping prices to stop the churn and attract new customers. For example, BGR reports that Yoigo (owned by Telstra) has offered free iPhone 5's on two-year contracts for as little as 25 euros (C$34) per month (the article emphasizes how competition through innovative pricing has led to profit declines at incumbent carriers). The decline in price is illustrative of why it is competition, not "regulatory costs" or device subsidies, that are the key factor to consider.

[Update 7/27: A commentator below helpfully points out an inaccuracy in the BGR article since the Yoigo price was for phone only and not service. A fuller comparison of the Spanish offer is as follows: Yoigo for 24 months of 25 euro phone + 25 euro service (unlimited voice + 1 GB data) is C$1636.24. Add another 12 months of service for C$409.56. Total three year cost is $2047.80. Bell's current offer on an iPhone 5 with the same voice and data for three years is $179.95 for the phone, $35 for the activation, and $70 per month of the service for 36 months. Total three year cost (not including taxes) is $2734.95.]


The Canadian competitive environment for wireless is ultimately linked to two issues: competitors and consumer switching costs. The two factors present a classic "chicken and egg" dilemma as there is a need for consumers to be able to switch in order to support new competitors, but without robust new competitors there is no one to whom they can switch. The Competition Bureau highlighted the problems of switching costs in its submission to the CRTC:

The restrictive, long-term contracts used by existing service providers may impose switching costs on consumers. There is extensive economics literature on switching costs that demonstrates how these costs harm competition and reduce consumer welfare. In general, switching costs may inhibit competition because they can:
  • Counteract efforts by new or recently established service providers to attract customers. In Canadian markets for mobile wireless services, where a small number of large incumbent service providers have created switching costs for a vast majority of consumers, new entrant service providers are forced to provide a competitive offer that compensates for such switching costs in order to attract customers. This may make participating in these markets less profitable, and potentially unprofitable, for these service providers;
  • Reduce the incentive for established service providers to discount their prices and innovate. The pressure on service providers to offer better prices or innovate is a function of consumer mobility. If consumers cannot switch service providers, then efforts by service providers to lower prices to attract new customers are likely to be less fruitful. If only a small portion of wireless consumers have the ability to switch service providers at a given point in time, then a strategy of lowering prices, innovating, or otherwise bringing competitive forces to market may be less profitable than a situation where the promoting service provider can attract a greater number of customers; and
  • Raise rivals' costs. Since the fixed costs of entering into Canadian wireless markets can be large, entrants may need to attract a significant number of customers in order to achieve a scale and scope of production necessary to compete with incumbent service providers. If entrants cannot attract customers due to high switching costs, then these entrants may not be able to become effective competitors.

The CRTC wireless code, with two-year contracts as an effective maximum, endeavours to reduce switching costs (similarly, unlocking requirements in the code and the implementation of wireless number portability several years ago removed other barriers). However, the code alone cannot solve the other half of the competitiveness problem: the need for viable alternatives. Without new competitors, the incumbent carriers will use this opportunity to increase monthly costs with contract length providing a convenient cover.

Given their views that Canadians should be paying the highest rates in the world, the latest increases should not surprise. However, no one should be under the illusion that two-year contracts mandate increased prices. There is certainly a cost associated with a device subsidy, but the question is who bears that cost. In highly competitive markets, much of the cost may be borne by the carrier, with the device treated as part of the customer acquisition or retention cost. In uncompetitive markets like Canada, carriers feel free to pass that cost along to customers, safe in the knowledge that they currently have little alternative but to pay it.

The "Miracle in Marrakesh" Provides a New Path for Digital Access

Michael Geist - Wed, 07/17/2013 - 02:21
Negotiators from around the world gathered in Marrekesh, Morocco late last month for a diplomatic conference aimed at concluding a new United Nations treaty to improve access to copyrighted works for people who are blind or have other perceptual disabilities. Despite years of discussions, there was ample reason for pessimism.

My weekly technology law column (Toronto Star version, homepage version) notes the treaty talks had become bogged down in the months leading up to the conference, with large lobby groups such as the Motion Picture Association working feverishly behind the scenes to undermine it through changes to rules on digital locks and fair use.

As the deadline approached however, the majority of the world lined up behind user rights for the blind. With Canada playing an important facilitative role, the negotiators were ultimately able to craft compromise language that resulted in a new landmark treaty. More than 50 countries immediately signed on, suggesting that the treaty is well on its way to establishing new rights for the blind (20 countries must ratify it before the treaty formally takes effect).


The treaty will first and foremost open the door to export of accessible works, thereby greatly expanding materials available to the more than 300 million blind and visually impaired people around the world. Moreover, it will ensure that digital locks do not impede access, since it allows for the removal of technological restrictions on electronic books for the benefit of the blind and visually impaired.

Beyond the substantive benefits, the treaty is rightly characterized as the "miracle in Marrakesh" as it is the first international copyright treaty to focus on user interests. Its origins start with the emergence of the World Intellectual Property Organization’s Development Agenda, an effort by developing countries and civil society groups to bring some balance to global intellectual property policy.

Established in 2004, it pushed WIPO to consider both improved protections of intellectual property in tandem with enhanced user rights. The treaty for the blind and visually impaired was one of the first major development agenda initiatives, despite facing significant opposition from publishers and some governments, who argued that a treaty was unnecessary.

With the first user rights treaty now in hand, WIPO may now turn its attention to other groups who may benefit from similar rights. In fact, there are proposals in development focused on libraries and education, two sectors where copyright exceptions are well established on public policy grounds, but which could be strengthened through minimum international law requirements.

The negotiating process behind the treaty for the blind is also instructive as it was far more open and transparent than comparable negotiations. The Trans Pacific Partnership Agreement and the Canada - European Union Trade Agreement both feature sizable intellectual property chapters, yet unlike the secrecy associated with those talks, the WIPO treaty negotiations featured regular public releases of draft texts and opportunities for interventions from groups on all sides of the issue, including publishers and groups representing the blind.

While the final language was crafted behind closed doors, the successful conclusion of the treaty demonstrated that greater transparency can help international negotiations by fostering consensus on difficult issues and creating feedback mechanisms that result in broader support for the final agreement.

From a Canadian perspective, the next step will be for the government to sign the treaty and address any potential domestic legal reforms necessary for ratification. Canadian law already includes several copyright provisions designed to facilitate access for the blind and visually impaired, so major changes to the law are unlikely.

Instead, the government should consider including any necessary reforms within Bill C-56, its copyright, counterfeiting, and trademark bill that is still at an early stage in the parliamentary process. Moving quickly would send a strong signal of support for the blind and demonstrate Canadian leadership on the world’s first copyright treaty focused on user rights.

OECD Report: Canada Still Among Ten Most Expensive Countries for Broadband Internet Services

Michael Geist - Tue, 07/16/2013 - 01:26
Yesterday I blogged twice about the 2013 OECD Communications Outlook, a major international report issued once every two years with detailed comparative data on telecommunications throughout the developed economy world. My first post noted that Canada's wireless performance ranks poorly, as it is among the most ten most expensive countries within the OECD in virtually every category and among the three most expensive countries for several standard data only plans. After Telus responded to my post, I followed up with a second post that examined some of the Telus-specific data used by the OECD. Those measures ranked Canada as the 2nd most expensive of 7 countries for 1 GB of wireless data (at speeds Telus customers are likely to receive) and the second most expensive of 19 countries for 500 MB of wireless data for tablets (again at speeds Telus customers are likely to receive).

The OECD report also includes comparative data on broadband services with Canada ranked among  the ten most expensive countries in virtually every tier (note that the OECD measures the cost by purchasing power parity so that differences in income are factored into the analysis).  For example, for plans offering 54 GB of data per month at speeds of 45 Mbit/second, Canada ranks as the 9th most expensive in the OECD. Move down a notch to 42 GB of data per month at 30 Mbit/second and Canada is the 8th most expensive country in the OECD. At slower speeds, Canada remains expensive - 33 GB of data per month at 15 Mbit/second is the 11th most expensive and for 18 GB of data per month at 2.5 Mbit/second it is the 9th most expensive.


Wireless broadband services fare even worse on a comparative basis. As noted yesterday, Canada is the third most expensive country for a monthly wireless broadband subscription of 500 MB or 1 GB per month. Moreover, the wireless broadband services for tablets fares poorly as well with Telus' offering ranking as the second most expensive service among 19 countries offering comparable speeds.

The report also includes an interesting chart (Table 7.29) that tracks changes in broadband over the past seven years by following a single service plan from each country starting in 2005 and recording how it changes over time. The Canadian example was a Bell service that shows speed, cost, and bit cap increasing during the 8 year period. In 2005, the service was 5120 kbit/s for $50.00 per month with no bit cap.  Bit caps were introduced to the plan in 2007. By 2012, the speed has increased to 15360 kbit/s and price had increased modestly to $52.17. While that may not sound unusual from a Canadian perspective, the majority of OECD countries (though not all) have experienced speed increases with price decreases. These include the following (speeds plus local currency cost):

Country
2005 Plan
Same Plan in 2012
Australia
1536 kbit/s for 129.40 20480 kbit/s for 61.90 Austria
2048 kbit/s for 54.90 8192 kbit/s for 18.38 Belgium
4096 kbit/s for 54.95 30720 kbit/s for 34.86
Czech Republic
1024 kbit/s for 3568
20480 kbit/s for 700
Denmark
4096 kbit/s for 499
20480 kbit/s for 260.06
Finland
24000 kbit/s for 68.9
24576 kbit/s for 33.2
France
18432 kbit/s for 39.90
20480 kbit/s for 36.90
Greece
1024 kbit/s for 32.90
2048 kbit/s for 32.31 Hungary
2048 kbit/s for 22188
15360 kbit/s for 4880
Japan
102400 kbit/s for 4064
204800 kbit/s for 3873
Luxembourg
3072 kbit/s for 90.50
20480 kbit/s for 79.00
Mexico
1024 kbit/s for 599.00
3072 kbit/s for 389.00
Netherlands
8192 kbit/s for 74.95
81920 kbit/s for 44.17
Norway
4096 kbit/s for 549
16384 kbit/s for 478
Poland
6144 kbit/s for 291.58
10240 kbit/s for 107.46
Portugal
8192 kbit/s for 59.99
24576 kbit/s for 25.49
Slovak Republic
1024 kbit/s for 52.74
5120 kbit/s for 13.77
Switzerland
2400 kbit/s for 99.00
10000 kbit/s for 74.35

While some countries have had both speed and price increases (Germany, Iceland, Ireland, Italy, Spain, UK) or no change in speed (US, Korea), 18 of the 30 countries tracked since 2005 have experienced price and speed move in the opposite direction. The chart is anecdotal and does not account for inflation, but it highlights how the growth of broadband services in many countries have led to better speeds and lower pricing. Canada has unquestionably experienced the faster speeds, but OECD data indicates that we remain comparatively a high-cost country for broadband Internet services.

Telus: Canada Should Be the Most Expensive Wireless Country in the OECD

Michael Geist - Mon, 07/15/2013 - 07:43
Telus has responded to my post on the 2013 OECD Communications Outlook, which ranked Canada among the most expensive countries in the OECD for wireless services in virtually every category, with its own post claiming that Canadians should be celebrating our relatively high prices. The post notes the investment that Telus and other companies have made in Canada (Peter Nowak explains the reason behind much of that investment) and argues that:

When you consider our enormous investment, challenging geography, sparse population and outstanding networks Canada really SHOULD be the most expensive country for wireless service in the OECD, but we’re not. That’s a great success story we should be celebrating.

It is a testament to how out-of-touch Canada's incumbent wireless providers have become that they think Canadians should be celebrating the fact that we are not the single most expensive wireless country in the developed economy world.  Telus says that scratching below the surface of the OECD report will lead people to conclude that Canadians pay about the same as other developed countries. Yet in its own chart, Canada ranks among the more expensive countries within the G7 in every category but one.


Interestingly, days after Telus promoted the OECD report with a press release and quotes from CEO Darren Entwistle claiming that Canadians "pay about the same prices as people in much more densely populated countries", it now says the OECD methodology is "limited." The OECD data relies on sample plans from Telus, Bell, and Rogers for its analysis. Telus also adds that pricing alone does not tell the whole story, noting that different prices may reflect different speeds.

To address their concerns about methodology and suggestions that rank do not tell the whole story, below are two of the key baskets from the OECD pricing comparisons that used Telus costs. Moreover, I have eliminated any country that does not match the Telus speed according to the OECD data. In other words, this is the OECD comparison of Telus pricing against providers in other countries offering comparable speeds. First, a 1 GB data plan with speeds of 40 Mbit/s or more:

Rank
Country
Provider
US$ PPP
Speed (Mbit/s)
1
Norway
Netcom
8.51
80.0
2
Slovenia
SI.mobil
11.75
42.0
3
Poland T-Mobile 11.83 42.0 4
Korea
KT
12.29
40.3
5
Greece
Cosmote
16.13
42.2
6
Canada
Telus Wireless
31.83
42.0
7
Japan
SoftBank
33.20
42.0

Second, a 500 MB data plan for tablets with speeds of at least 7.0 Mbit/s or more:

Rank
Country
Provider
US$ PPP
Speed (Mbit/s)
1
Denmark
Telia
5.65
80.0
2
Ireland
Meteor Mobile
8.15
14.4
3
Poland
PlusGSM
8.28
42.0
4
Norway
Netcom
8.51
80.0
5
Turkey
Avea
8.82
7.2
6
Hungary
Telenor
9.41
7.2
7
Luxembourg
Tango
9.63
7.2
8
Italy
TiM
10.67
14.4
9
France
Bouygues
11.09
42.0
10
Switzerland
Swisscom
11.68
7.2
11
Slovenia
SI.mobil
11.75
42.0
12
Greece
Vodafone
11.86
42.2
13
Germany
E-Plus
11.95
7.2
14
Korea
KT
12.29
40.3
15
Czech Republic
Vodafone
12.72
21.6
16
New Zealand
2degrees
13.16
7.2
17
Spain
Vodafone
14.99
21.6
18
Canada
Telus Wireless
17.70
7.2
19
Japan
SoftBank
33.20
42.0

This is the data provided by the OECD using Telus as representative of Canadian pricing: the 2nd most expensive of 7 countries for 1 GB of wireless data (at speeds Telus customers are likely to receive) and the second most expensive of 19 countries for 500 MB of wireless data for tablets (again at speeds Telus customers are likely to receive). Telus apparently believes the fact that we rank 18th out of 19th countries in this OECD sample is a great success story.  Based on recent comments, it does not appear the government shares that view.

OECD Report Confirms What Canadians Have Long Suspected: Wireless Pricing Among Highest in the World

Michael Geist - Sun, 07/14/2013 - 21:31
The OECD last week released the 2013 Communications Outlook, a major international report issued once every two years with detailed comparative data on telecommunications throughout the developed economy world. Telus jumped on the report by posting its own release claiming that it "once again confirms that Canadian wireless pricing is extremely competitive internationally." Notwithstanding those sunny comments, those that take the time to read the report (which must be purchased or accessed via an institutional subscription) will find that the reality is that the OECD reports that Canada is one of the most expensive countries for wireless services in the world. In fact, the OECD finds that not only do Canadian wireless services rank poorly when compared to the rest of the OECD, but so too do broadband Internet services (I'll focus on broadband in a later post).

These wireless price rankings run from cheapest (1st) to most expensive (34th). Canada ranks among the most ten most expensive countries within the OECD in virtually every category and among the three most expensive countries for several standard data only plans.



Service Plan
Canadian Rank of 34 OECD countries from least to most expensive (2013 report)
Low Usage (30 calls + 100 MB data)
25th
Medium Usage (100 calls + 500 MB data)
24th
Medium-High Usage (300 calls + 1 GB data)
24th
High Usage (900 calls + 2 GB data)
21st
High Data, Low Call Usage (100 calls + 2 GB data)
22nd
Data only - 500 MB
32nd
Data only - 1 GB
32nd
Data only - 2 GB
29th
Data only - 5 GB
32nd
Data only - 10 GB
27th
Data only (tablet) - 250 MB
29th
Data only (tablet) - 500 MB 31st
Data only (tablet) - 1 GB
32nd
Data only (tablet) - 2 GB
29th
Data only (tablet) - 5 GB 26th

The expensive pricing surely has an impact on wireless subscriptions. Canada ranks last in the OECD in wireless subscriptions per 100 inhabitants, second last in households with a mobile telephone, and 23rd (of 34) in wireless broadband subscriptions per 100 inhabitants.

Given Canada's comparatively high prices, it comes as no surprise that Canadian operators rank 4th in the OECD in mobile revenues, however. The OECD report also points to the value of more competition in the marketplace. For example, it compares the UK and France:

It is also worth posing the question as to why average revenue per subscription declined in France but rose in the United Kingdom. Even though some of these relative changes in revenue may also be due to fluctuations in exchange rates, it should be noted that a merger between two operators took effect in the United Kingdom in the second half of 2011, decreasing the number of operators from five to four. Meanwhile, the market in France underwent substantial changes in the lead-up to the introduction of a fourth operator at the beginning of 2012, with incumbents offering more attractive tariffs. Nevertheless, in both markets the main influence should have been felt from 2012, rather than in 2011. In France, for example, prices fell significantly following the introduction of a fourth operator, but there was also significant growth stimulated in the market.

The OECD report confirms that Canada wireless pricing is not competitive with the majority of the the world's developed economies and supports what policy makers, consumers groups, and now the government believe: that experience elsewhere indicates that new entrants should result in greater competition and better pricing. 24th

Supreme Court of Canada To Hear Appeal of Warrantless Cellphone Search Case

Michael Geist - Sun, 07/14/2013 - 21:30
The Supreme Court of Canada has granted leave to appeal in the Fearon case, which involved an Ontario Court of Appeal decision permitting a police search of a cellphone that was not password protected or locked during the course of an arrest. I referenced the case in a brief post earlier this year.

Japan Considering Copyright Term Extension, Canada Next?

Michael Geist - Sun, 07/14/2013 - 21:28
The Japanese government is reportedly considering extending its term of copyright protection from the international standard of life plus 50 years to life plus 70 years as required by drafts of the Trans Pacific Partnership. The issue seems likely to similarly arise in Canada, which also maintains a life plus 50 years approach.

Verizon Entry to Canada Could Spark Shift Toward Single North American Communications Market

Michael Geist - Wed, 07/10/2013 - 01:25
Reports that U.S. telecom giant Verizon may be preparing to enter the Canadian market has sparked considerable speculation on the likely impact of a company with a market cap greater than Bell, Rogers, and Telus combined. While much of the discussion has centered on wireless pricing, my weekly technology column (Toronto Star version, homepage version) argues that the more significant development may be the shift toward a single North American communications market.

Canada and the U.S. share much of the same communications infrastructure - the same North American numbering plan (calling codes), closely aligned spectrum policies, and easy access to broadcast signals along the border - yet for decades the two systems have been separated through regulation. Foreign ownership restrictions, Canadian content requirements, and simultaneous substitution policies (which lead to the annual complaints about missing U.S. commercials during the Super Bowl) have all ensured that the two markets remain distinct.

In recent years, new technologies have slowly chipped away at the communications divide.


For example, there may be modest differences between U.S. and Canadian satellite radio services with several Canadian-specific channels, but the vast majority of available programming and devices are the same.  

Internet-based video services represent another significant blurring of the Canada - U.S. line. With two million Canadian Netflix subscribers, those hoping for a Canadian competitor to Netflix are missing the reality that the Canadian Netflix is Netflix. There are some differences in available content, but that too is diminishing, particularly as Netflix invests in its own original programming.

The prospect of a Verizon entry into Canada would put a single communications market into overdrive. On the telecom side, Verizon could use its Canadian network to change the approach to roaming in North America altogether since it would be uniquely positioned to offer a single U.S. and Canadian network.

The company could move to eliminate roaming fees for U.S. and Canadian customers, while offering cost-competitive U.S. and Canadian roaming together for international providers establishing wholesale roaming agreements. Such a plan would obviously be attractive to the corporate sector as well as regular cross-border travellers, leading to the gradual elimination of roaming and long distance charges for calls throughout North America.

On the broadcasting side, Verizon holds exclusive U.S. rights to both the National Football League and the National Hockey League.  Those rights are currently held by BCE in Canada, but a Verizon entry into Canada could shake things up. Verizon could presumably complicate the BCE rights by offering free access to NFL and NHL games to Canadian customers when they travel to the U.S.  More interestingly, it could make a play for joint U.S. - Canada rights in the future, moving closer to an elimination of the geographic divide on content rights.

Verizon could also pursue changes to broadcast distribution regulations, which are viewed as a major hurdle for foreign entrants since non-Canadian companies are unable to offer competitive bundles that feature wireless and television services.  Given the government's obvious support for a strong foreign wireless entrant, Verizon would be well positioned to promote the removal of the current restrictions.

Later this year, the Canadian Radio-television and Telecommunications Commission will examine the regulatory framework for television services.  CRTC Chair Jean-Pierre Blais has acknowledged that it is time to ask whether the assumptions that lie behind Canadian regulatory policies still hold true.

With satellite radio and Internet video already close to a single market, regulatory reform to longstanding policies such as simultaneous substitution a possibility, and the geographic lines on telecom, content, and broadcast distribution all increasingly blurred, the big question may be whether Canada is closing in on a common North American communications market.

Ontario Government Emphasizes User Rights in its Copyright Policy for Education

Michael Geist - Mon, 07/08/2013 - 01:38
The Government of Ontario's Ministry of Education has issued a policy memorandum to all provincial elementary and secondary schools regarding the use of copyright-protected works for education. The government's approach, which takes effect immediately, represents a strong endorsement of users' rights, citing not only fair dealing but over a dozen additional educational exceptions that are now part of Canadian copyright law.

The government adopts fair dealing guidelines developed by the Council of Ministers of Education, Canada, which largely covers the same copying permitted under an Access Copyright licence. The guidelines, which permit copying of up to 10 percent of a work, a single article, or a chapter from a book, state:


1.Teachers, instructors, professors, and staff members in non-profit educational institutions may communicate and reproduce, in paper or electronic form, short excerpts from a copyright protected work for the purposes of research, private study, criticism, review, news reporting, education, satire, and parody.

2. Copying or communicating short excerpts from a copyright-protected work under these Fair Dealing Guidelines for the purpose of news reporting, criticism, or review should mention the source and, if given in the source, the name of the author or creator of the work.

3. A single copy of a short excerpt from a copyright-protected work may be provided or
communicated to each student enrolled in a class or course:
a. as a class handout;
b. as a posting to a learning- or course-management system that is password protected or
otherwise restricted to students of a school or postsecondary educational institution;
c. as part of a course pack.

4. short excerpt means:
a. up to 10 per cent of a copyright-protected work (including a literary work, musical score, sound recording, and an audiovisual work);
b. one chapter from a book;
c. a single article from a periodical;
d. an entire artistic work (including a painting, print, photograph, diagram, drawing, map, chart,
and plan) from a copyright-protected work containing other artistic works;
e. an entire newspaper article or page;
f. an entire single poem or musical score from a copyright-protected work containing other poems or musical scores;
g. an entire entry from an encyclopedia, annotated bibliography, dictionary, or similar reference work.

5. Copying or communicating multiple short excerpts from the same copyright-protected work with the intention of copying or communicating substantially the entire work is prohibited.

6. Copying or communicating that exceeds the limits in these Fair Dealing Guidelines may be referred to a supervisor or other person designated by the educational institution for evaluation. An evaluation of whether the proposed copying or communication is permitted under fair dealing will be made based on all relevant circumstances.

7. Any fee charged by the educational institution for communicating or copying a short excerpt from a copyright-protected work must be intended to cover only the costs of the institution,
including overhead costs.

Government Trumpets Declining Wireless Prices, but Canada Still Middling in Global Comparisons

Michael Geist - Thu, 07/04/2013 - 23:56
The 2013 Wall Communications Report on Canadian wireless and Internet pricing, produced annually for the CRTC and Industry Canada, was released yesterday. The study generated headlines on declining costs for wireless services, with Industry Minister Christian Paradis claiming that government policies were delivering lower prices for consumers. The key takeaway came from yet another shot across the telecom bow from the government:

Our plan is working: important progress has been made and Canadian families are seeing the benefits. The Harper Government will not let this progress be lost or undermined. We will continue. We will not hesitate to use any and every tool at our disposal to protect consumers and promote competition in every region of the country.

The continued focus on wireless competition will be needed since the Wall Communications report also found that Canada is middling at best relative to the other countries in the survey (US, UK, France, Australia, and Japan). In fact, Canada is described as being "on the high side" for virtually every key category, with only the U.S. faring consistently worse.


On wireless services, Canada ranks as the second most expensive for average use and the third most expensive for high volume use. The study states:

In sum, the Canadian Level 2 (average usage) mobile wireless service basket price falls in the middle of the group relative to the five foreign justifications included in this study. However, in the case of the Level 1 (low usage) and Level 3 (high usage including data) service baskets, Canada tends to fall on the high side of the average for the group of surveyed countries.

Broadband pricing ranks are similar with the second most expensive broadband services for the faster categories (16 - 40 Mbps and above 40 Mbps). As the study, notes Canadian pricing is relatively good at lower speeds, but poor for faster services:

In sum, Canadian broadband Internet service prices compare favourably with the other surveyed countries in the case of the Level 1 (< 3.0 Mbps download speeds) and Level 2 (4 – 15 Mbps) broadband service baskets. However, Canadian Level 3 (16 – 40 Mbps) and Level 4 (> 40 Mbps) prices are higher than the prices measured in the surveyed countries included in the study, with the exception of the U.S.

On mobile data, the survey finds that Canadians have access to fast mobile networks, but pay the highest rates among surveyed countries for larger data allocations (ie. 5 GB per month).

On balance, Canadian Level 1 (2 GB/month) mobile Internet service rates fall on the high-side of the average of the group of surveyed countries, whereas Canadian Level 2 (5 GB/month) rates are the highest of the group. On the other hand, Canadian advertized mobile Internet download speeds are higher than those in the other surveyed countries (largely due to the launch of 4G LTE services in Canada).

The full report can be accessed here.

Canadian Telcos Change Tune Over Implementation of CRTC's Consumer Wireless Code With Lawsuit Threat

Michael Geist - Thu, 07/04/2013 - 00:49
The CRTC released its consumer wireless code last month, receiving kudos for new measures that should eliminate three-year contracts. Now the major telecom companies are preparing a lawsuit challenging the rules associated with the implementation of the code. While the code will take effect for any new, renewed, or changed contracts starting on December 2, 2013, the CRTC has stated that all consumers should benefit from the code by June 3, 2015 or two years after its initial release. The telcos object to this position, arguing that it retroactively applies new conditions to contracts that existed prior to the start date of the code. According to an affidavit from SaskTel, the major concern involves the potential for consumers on three-year contracts to walk away from those contracts in June 2015 without further payment, despite terms that could run months longer.

Yet during the wireless hearing, some telcos assured the CRTC that customers would benefit from the code within two years. For example, SaskTel told the Commission that its customers now upgrade their devices (and thus would fall under the code) roughly a year and a half after signing the initial contract:

Customers are turning over their devices in the second to third year. We have introduced an early device upgrade program in October of last year which gives customers the ability to upgrade their device at any time. Since we have implemented that program we've seen customers upgrading after about 17.5 months.


Indeed, the company stated that a significant percentage of its customers would be under the code after two years, despite the fact that the majority of them sign three year contracts. At para 8911:

THE CHAIRPERSON: So, as I understand, you have about 600,000 contracts that are churning, I guess, and renewing at different rates. You may have been present when I -- we asked questions of other companies to be able, maybe through an undertaking, to tell us in your normal course of renewing those, assuming a prospective implementation, how much of those contracts within after one year, two years, three years would eventually have been switched over to a fully implemented code?

MR. ANDERSON: We will see if we can provide some accurate numbers for the 22nd, but I've got to believe intuitively -- again, we see a large percentage of our customers upgrading plans prior to the three-year term because they want to get the new devices. So intuitively I've got to believe even if you didn't have that phenomena, you've got probably one-third of your customer base every year is upgrading to a new contract anyway. So after two years you've probably got two-thirds of the customer base not allowing for any churn, competitive activity or customers that just simply want to upgrade for the new device. So I've got to believe after two years you're going to get a significant percentage of the customers that will be onto a new contract, but we will try and see if we can quantify that a little better --

Telus was similarly asked directly how long it would take for its customer base to benefit from the wireless code. The exchange (at para. 2836):

THE CHAIRPERSON: Okay. Assuming that -- and I take it that you will want to address that perhaps in your comments, but assuming that, from a factual perspective, if you look at the amount of churn, that is, new clients coming in, as well as patterns of amendments from the past, how long would it take, on a prospective basis, for all of your customers to be subject to the --

MR. WOODHEAD: I would say, probably, somewhere between two to three years, and probably closer to two. And, you know, I don't want to leave this as me sounding like I am afraid of anything in this code, or that we are afraid of it, it's about the application of it. We actually want customers to have the benefit of some of these things, it is the actual -- and, again, we will get to it, I think, in the response to Commissioner Molnar's question, in the undertaking, but there are some operational challenges around applying it retrospectively.

THE CHAIRPERSON: And I have never mentioned application retrospectively. I am asking, let's say that we -- and I am just saying six months. I know that some people will comment that six months is too quick, but let's assume that in six months we decide the new code applies. Without it applying retroactively, but prospectively, when will Canadian customers, in your customer base, be able to benefit?

MR. WOODHEAD: I think two years.

THE CHAIRPERSON: Within two years.

MR. WOODHEAD: Yes.

The telcos provided confidential data to the CRTC that may have backtracked somewhat on this timeline, but what is clear is that many still want to lock-in as many Canadians as possible under three-year contracts. The CRTC had expected the carriers to shift more quickly to two-year contracts, but they seem likely to stick with three-year contracts through the two busiest sales periods of the year (back to school and Christmas) as they fight in federal court for the right to enforce those long-term contracts right down to the very last day.

Why a New Approach To Roaming Could Shake Up the Canadian Wireless Landscape

Michael Geist - Wed, 07/03/2013 - 00:50
Having initially dismissed the prospect of Verizon's entry into the Canadian market, telecom analysts are now seeking to downplay the likely impact, questioning whether Verizon would become a consumer-focused competitor and suggesting its focus may be limited to the corporate market. While the Verizon's precise plans remain unknown, it seems likely that much of their interest in Canada stems from roaming costs.

Carrier roaming costs (and revenues) are typically shrouded in secrecy, but it seems likely that Verizon faces a significant imbalance when it comes to roaming costs in Canada. Recent reports from both the OECD and BEREC (the Body of European Regulators for Electronic Communications) point to the typical model for roaming costs, with carriers preferring to simply swap traffic with no net payments. The OECD discusses this in an international roaming study released last month:


It is well documented that operators in certain markets seek to balance traffic to the greatest extent possible, in the first instance, and subsequently seek to negotiate the price for services at the margin. If we consider an extreme in such cases where two operators have traffic volumes which are perfectly in balance, one in country A and one in country B, then if the rates offered are reciprocal which is normally the case, then the net payments are zero. The actual costs faced by the first in question are the costs of service provision, which at the margin will be extremely low. In this instance, either operator has the possibility to offer retail services at a much lower rate if it chooses to do so.

BEREC makes the same point in its 2010 study on international roaming regulation:

In the wholesale roaming market, the majority of deals are reciprocal, so that purchasers buy and sell wholesale roaming from the same counterparty. Where the trade is intra-group or traffic is relatively balanced, in practice the unit price is of little consequence. For non-group trades, the volume of roaming sold may be of much greater commercial significance than the purchase price. In addition, the advent of traffic steering has meant that operators generally try to identify various preferred partners (in order of preference) to which the bulk of their traffic is directed. There appears to be a tendency to balance traffic as far as possible.

Swapping traffic is a problem for Verizon since its CDMA network makes it difficult to balance roaming traffic. Once Bell and Telus shifted away from CDMA, those companies benefited from Verizon customers roaming in Canada (their CDMA network remains active and can accommodate Verizon customers roaming in Canada) but Bell and Telus customers roam on competitor networks in the U.S.  For Verizon, the imbalance may run into the hundreds of millions of dollars each year (a 2008 Australian study - well before today's major roaming data demands - found Telstra's international roaming revenue was $327 million). Assuming a major roaming imbalance, investing several billion dollars into the Canadian market by buying new entrants and bidding on spectrum could be recouped in large measure through the roaming savings.

More compelling is the prospect that Verizon could use its Canadian network to change the approach to roaming in North America altogether. As Europe moves to dramatically reduce roaming costs throughout the European Union, Verizon would be uniquely positioned to offer a single U.S. and Canadian network. The company could move to eliminate roaming fees for U.S. and Canadian customers, while offering cost-competitive U.S. and Canadian roaming together for international providers establishing wholesale roaming agreements. Such a plan would obviously be attractive to the corporate sector as well as regular cross-border travellers (think Canadians that regularly vacation in Florida or Arizona).

For the Canadian carriers, the change would require a response as a single calling market with no roaming fees would represent a serious competitive threat. Further, given Verizon's ability to recoup costs from U.S. and foreign customers, it would be well-positioned to offer competitive Canadian domestic rates. The change would cost the Canadian companies millions in roaming revenues alongside lost customers attracted to a simplified, no roaming offer.

Unlike their response to the new entrants, which focused on low-cost flanker brands with the bet that the new entrants would not survive, the ability for Verizon to reshape the marketplace would require a more robust response that would impact on both the consumer and business segments of the market.  Given the threat, it should come as little surprise to find Bell already sounding the alarm, as it warns against what it sees as unfair competition and calls for a "level playing field."  For Canadian consumers weary of an uncompetitive market, Verizon's entry could finally result in competitive differentiation and some real change.

Happy Canada Day: Celebrating Canada's Digital Policy Success Stories

Michael Geist - Mon, 07/01/2013 - 01:39
As Canadians grapple with news of widespread secret surveillance, trade agreements that could upend intellectual property policy, and the frustrations of a failed wireless policy, there are plenty of digital policy concerns. Yet on Canada Day, my weekly technology law column (Toronto Star version, homepage version) argues that it is worth celebrating the many positive developments that dot the Canadian digital policy landscape.  Eight of the best include:

1.    The Supreme Court of Canada's strong affirmation of user rights and technological neutrality in copyright. Canada's highest court stands as the most pro-user court in the world as it has repeatedly emphasized the need to strike a balance between creator rights and user rights. Its decisions, which include a record five copyright cases handed down in a single day last year, are cited by many as the best approach to reward creators and promote new innovation.


2.    The Canadian Radio-television and Telecommunications Commission's policy on network neutrality. As other countries struggle to develop regulations that safeguard against competitive abuses by Internet providers, the CRTC's 2009 Internet traffic management practices policy is often lauded as a measured approach that opens the door to consumer complaints about net neutrality violations.

3.    The defeat of the government's lawful access legislation. The recent revelations of widespread surveillance programs tempers the perceived victory that came from defeating the 2012 Internet surveillance bill, but the massive backlash demonstrated that Canadians are willing to speak up to protect their privacy rights and that the Internet can be a powerful tool for advocacy purposes.

4.    Canada's promotion of user generated content. Recent Canadian copyright reforms featured a unique user-generated content provision that provides legal protection for creators of "remix" and "mashup" videos alongside safety from liability for websites that host such content. The reforms are the first of its kind, leading other countries to consider whether they should incorporate the Canadians rules into their domestic laws.

5.    The CRTC's pro-consumer agenda.  Telecom and broadcast regulators are rarely viewed as pro-consumer, yet recent changes at the CRTC point to a new perspective on the role of consumers and the public interest in communications policy. From the initial defeat of the BCE-Astral merger to the inclusion of public comments within CRTC hearings (Chair Jean-Pierre Blais has posed consumer responses directly to telecom CEOs), consumers are now the watchword at the Commission.

6.    The Privacy Commissioner of Canada's aggressive investigations of top Internet companies.  While Privacy Commissioner of Canada Jennifer Stoddart complains about the lack of enforcement powers within her legislative mandate, her office has emerged as a global leader in holding the feet of Internet companies such as Facebook to the fire. Canada was the first country to launch a detailed investigation into the social media giant's privacy practices and since then has thrust itself into a leadership role in assessing the privacy impact of new technologies.

7.    Canada's notice-and-notice system for Internet providers.  As countries such as France back away from much-criticized policies that included the prospect of being cut off from the Internet due to allegations of copyright infringement, the Canadian approach of using notices to educate users about potential infringing activity is starting to attract international attention. Data suggests that the Canadian model is effective at reducing infringement, while preserving the privacy and free speech rights of users.

8.    Canada's balanced patent law standards. Canadian courts have brought the same emphasis of balance found in copyright to patent law by focusing on the "patent bargain" of public disclosure of new inventions in return for upholding exclusive patent rights. The courts have not shied away from striking down patents that fail to meet that bargain, much to the chagrin of patent holders who have become increasingly vocal in their criticism.

Verizon on the Horizon: Could the U.S. Giant Shake Up More than Just Canadian Wireless?

Michael Geist - Wed, 06/26/2013 - 21:21
Reports in the Globe yesterday that U.S. telecom giant Verizon has offered $700 million for Wind Mobile as part of an entry into the Canadian wireless market (which could also include buying Mobilicity and bidding in the upcoming spectrum auction) caused significant reverberations throughout the industry. The news sent the stock price of the Canadian incumbents plummeting and analysts - who only days ago were assuring clients such a move would not happen ("highly unlikely" said Scotiabank's Jeff Fan; "what a joke" a telecom executive told Cartt.ca) - scurrying to assess the potential impact of a Verizon entry. Some have argued Verizon would have little interest in a smaller market like Canada, yet the company has actively promoted the elimination of foreign investment restrictions including in a 2008 submission to the Competition Policy Review Panel that detailed how "it had a long-standing presence in the Canadian telecommunications market". 

There remain many questions about a Verizon entry into the market via Wind Mobile, particularly with respect to the use of different wireless technologies and spectrum, but there is little doubt that the company could use its buying power to offer better deals on devices and North America-wide plans that leverage its U.S. network to offer significantly better roaming services. Moreover, the U.S. footprint could appeal to the corporate sector, offering the chance to steal customers from the current incumbents. 

Less discussed would be the potential impact on broadcast rights and distribution.


On the broadcast rights issue, Verizon holds exclusive rights to both the NFL and NHL in the U.S., with the NFL deal signed a few weeks ago valued at $1 billion for four years (making Verizon one of the NFL's most important corporate partners).  Those rights are currently held by BCE in Canada, but a Verizon entry into Canada could shake things up. Verizon could presumably complicate the BCE rights by offering free access to NFL and NHL games to Canadian customers when they travel to the U.S.  More interestingly, Verizon could make a play for joint U.S. - Canada rights in the future, moving closer to an elimination of the geographic divide on content rights.

The broadcast distribution issue could have even bigger repercussions. Of all the challenges faced by a foreign entrant such as Verizon, the biggest may well be restrictions on foreign broadcast distribution. The inability to offer television services as part of a bundled offering is a clear disadvantage for a foreign competitor, who is left chasing the low-end wireless-only consumer market and the high-end corporate market, but without the big consumer mid-to-high end market that often purchases bundled services.

Verizon could use their potential entry to blow this open by seeking government support for changes to the restrictions on broadcast distribution. Recommendations for changes to the BDU restrictions date back many years (e.g., 2003 Industry Committee report) but this would be a particularly opportune time to raise it. The Canadian wireless market is a mess and a Verizon entry would be viewed by the government as the best chance to meet its goal of a fourth carrier and rescue the failing new entrants. With billions at stake and with the CRTC re-examining Canadian television later this year, opening up the BDU market would be in line with a pro-consumer approach and bring greater consistency to foreign investment rules in the communications sector. There are still many questions about a Verizon entry into Canada as a fourth national player, but those questions should not be limited to telecom as there is the potential to similarly shake up the Canadian broadcast world.

"The Miracle in Marrakesh": Agreement Reached on a Treaty for the Visually Impaired

Michael Geist - Wed, 06/26/2013 - 21:16
After years of discussions and repeated efforts to thwart or water down a treaty for the visually impaired, delegates in Morocco reached agreement late Tuesday on a treaty. A draft of the text is available here.

Reddit AMA Asked Me Anything

Michael Geist - Wed, 06/26/2013 - 21:15
I participated in a Reddit AMA together with SurfEasy on Tuesday.  The discussion led to questions on a wide range of issues, including copyright, privacy, surveillance, and the TPP.

The State Valley Money in 2013 – Liveblogging from START SF

ThomasPurves.com - Wed, 06/26/2013 - 10:49

Unless you are feeling particularly exceptional, now’s not a great time to be raising money for your consumer internet startup. But there is money still out there.

Had the great opportunity to be invited to attend the private START in San Fran today put on by the folks behing f.ounders. One of the first panels on Micro VC I took a few notes. And I thought few of my friends would be interested in some inside scoop on the current valley funding environment circa mid-2013. If our rotating door on Ashbury st (aka The Unofficial Visiting B&B for Canadian Tech Nerds) is any indicator, there’s still lots of opportunity down here.

Here’s my speed notes on the session, errors or crazy-talk is probably my fault in typing.

Panel: Micro-VC – 4 Small Funds Focused on seed through series A software VC
Mike Maples (Floodgate), Aileen Lee (Cowboy Ventures/KPCB),
Jeff Clavier (SoftTech), Alex Mittal (Funders Club)
Moderator: Tomio Geron (Forbes)

For some reason, the panel started backwards – talking about big liquidity events and working backwards to seed funding.

Snapchat’s crazy round and founder liquidity

  • Snapchat exit at 800M really big news item this week at huge valuation. Seems like it was highly competitive funding deal to get such a deal. What do you guys think of the the 20M(!) payout to the founders? Huge founder liquidity after only 2 years is risky, because founders have made their money for life and might not be incentive to stick around
  • As an entrepreneur you need to think that you will overcome any obstacle and there is no plan B. taking money of the table with liquidity gives them a plan b. some folks who get rich just get more hungry, but not everyone. (Early cash-out is like the opposite of burning-the-boats motivational strategy)
  • better is founder liquidity after 3-5 years to keep them rewarded and engaged in the company
  • - w/o healthy IPO market, high valuation also creates problems finding a future acquirer at a valuation over a billion dollars

Current Funding Environment

  • Enterprise is strong, but Consumer VC is currently “brutal” vs 2 years ago
  • lots of companies were invested a few years ago and haven’t paid out yet, or at all, or went in too high, and investors do
  • Series A expectations: 1 Million users for a consumer service 2yrs ago, now you need 5 or 10 M users
  • Before you needed 4M revenue run rate for a service business to series A, now 10 M
  • This raising of the bar on series A, has also raised the bar on seed investment
  • Contrary point: the exceptional founders and companies (really about 5-15/year any year) are truly exceptional. They will always manage to get funded. What happens is that, cyclically, less exceptional also founders get funded.
  • Really, there’s always money. But often too much money flocking to certain hot segments or geographies, and not enough going to all opportunities which makes the industry cyclical.
  • Last point: (Panel may be biased but claim) Party rounds (lots of investors at 25-50k each) not great for seed rounds without an achor, institutional or specialized Micro-stage VC investor firm that will really work with you to get you to the next round

Is the Government About to Can Its Own Anti-Spam Law?

Michael Geist - Mon, 06/24/2013 - 21:11
In May 2010, then-Industry Minister Tony Clement introduced anti-spam legislation that he admitted was long overdue. Clement acknowledged that "Canada is seen as a haven for spammers because of the gaps in our current legislation...a place where spammers can reside and inflict their damage around the world." Despite heavy lobbying against the legislation by groups concerned with new rules on electronic marketing, the government pushed ahead, with the bill receiving all-party support and royal assent by the end of that year.

As my weekly technology law column notes (Toronto Star version, homepage version), two-and-a-half years later, the anti-spam law has still not taken effect, awaiting long-delayed final regulations that have been the target of an intensive campaign to water-down or repeal the legislation before it ever takes effect.

Last week, government officials disclosed that the best-case scenario for the law is that final regulations are released late this summer with the implementation of the law delayed until the fall of 2014.  Moreover, many provisions may not become operational until at least 2017, eight years after the first anti-spam law bill was tabled in the House of Commons.


Yet even that timetable may be overly optimistic. With the government reportedly preparing a major cabinet shuffle this summer that may include another change at Industry Canada, it appears that it may be ready to can its own anti-spam law. Should the cabinet shuffle result in a new industry minister, the entire issue will likely go back to the drawing board with the prospect of new briefings, new consultations, and delays that could stretch into 2015 and beyond.

In fact, even if Industry Minister Christian Paradis takes advantage of the narrow window this summer to obtain the necessary approvals for final regulations, the law will contain a myriad of expanded exceptions and implementation delays.

When Parliament passed the legislation, it was touted as one of the toughest and most comprehensive in the world, adopting a pro-privacy consent model that requires explicit approval from consumers in order to send them commercial electronic messages. The law also includes safeguards against software installations on personal computers without consent, all backed by strong enforcement powers that include significant penalties for violation.

As with many deals, however, it pays to read the fine print. The law does not take effect until associated regulations are finalized and lobby groups have used the regulation-making process to raise a host of concerns. While some fine-tuning was to be expected, the regulations have already expanded many exceptions and officials have indicated that further changes may be on the way.

The heavy lobbying has left some politicians unsure of what to make of the law, understandably concerned when small businesses claim it will stop electronic marketing and charities express fear that it will cut off important sources of funding.

Yet the reality is not nearly as frightening as critics suggest. Businesses have been given years to adapt to the new system and a simple request for customer consent sometime before 2017 would address the key consent requirement. For charities, obtaining lifelong consent (or until consent is withdrawn) can be easily obtained when a member or volunteer joins the organization or when a donor makes a contribution.

The government’s dithering on legislation is particularly surprising given that it has otherwise pursued pro-consumer policies on telecom and Internet issues. Delivering anti-spam legislation fits squarely within that approach, since it provides Canadians with legal protections against spyware and assurances that businesses and other organizations will seek permission before sending electronic marketing materials.  Unless the government acts quickly, however, the law may become a victim of a legislative delete button.

The Motion Picture Association's Fight Against a Treaty to Support the Visually Impaired

Michael Geist - Mon, 06/24/2013 - 00:22
Earlier this month, I wrote about a diplomatic conference in Morocco designed to finalize a much-needed copyright treaty for the visually impaired. The column noted that the treaty seeks to do two things: first, it establishes minimum standards for copyright limitations and exceptions for the visually impaired. Second, the treaty would facilitate the export of accessible works.

The conference is now in its second week with growing fears that there will be no deal. The major hold-out appears to be the United States, which is blocking consensus on a range of issues. According to documents released over the weekend, the primary source of the U.S. opposition comes from the motion picture association, which has engaged in months of behind-the-scenes lobbying designed to dismantle the treaty.  For example, the MPA is trying to block the inclusion of a fair use/fair dealing provision, despite the fact that many countries (led by the U.S.) already have such a rule.



The MPA has also encouraged the U.S. to block or muddy a digital locks provision that would require an exception for the visually impaired. Canada is among many countries (including Australia. Switzerland, Argentina. Ecuador, Chile, Brazil, Holy See, Japan, India, African Group, Guatemala, Bangladesh, China, Kenya, South Africa, Morocco) that is supporting the following language:

A Member State/Contracting Party shall ensure effective and necessary measures in accordance with that Member State/Contracting Party’s national copyright law regarding technological protection measures such that beneficiary persons are not prevented from enjoying limitations and exceptions under this instrument/Treaty.

Yet the U.S. is opposed, seemingly based on opposition by the MPA (there are reports this morning that a compromise on this issue may have been reached).

The documents make it clear that the MPA and other rights holder organizations fear a treaty for the visually impaired since it establishes a precedent by focusing on the need for minimum limitations and exceptions in copyright. In response, their aggressive backroom lobbying tactics seek to maintain the rules that stifle access for millions of blind and visually impaired people around the world. The next few days will determine whether they will succeed or if countries such as Canada will stand up for the rights of the blind and visually impaired.
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