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Different Regulations, Different Regulators: Behind Canada's Net Neutrality Advantage

Michael Geist - Mon, 04/28/2014 - 00:49
Last week, many in the Internet community were outraged by a U.S. Federal Communications Commission proposal that would significantly undermine net neutrality. The commentary on the (still unpublished) U.S. proposal says it all - The FCC's New Net Neutrality Proposal is Even Worse Than You Think, Is Net Neutrality Dying, How Open Will the FCC's 'Open Internet' Really Be?, Goodbye, Net Neutrality: Hello, Net Discrimination, and Net Neutrality Dead for Good?. The FCC responded with its own post that did little to assuage the concerns, stating that the U.S. rules will propose:

1.    That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network;
2.    That no legal content may be blocked; and
3.    That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.

Transparency and no legal blocking are hold overs from the earlier Open Internet order. The third issue is where net neutrality would be harmed as the FCC is proposing to shift toward a "commercially unreasonable" standard for treating similar content in different ways. That approach would certainly permit paid prioritization, where deep pocketed content owners could pay to have their content sent on a fast lane, while everyone else is stuck on the slow lane.  Moreover, given that the earlier Open Internet order was struck down by a U.S. court, even transparency and content blocking presently fall through the cracks.

Given the widespread attention to the U.S. developments, many have been asking about the impact in Canada.


While some speculate that Canada won't escape the FCC approach, there are ongoing questions about the CRTC net neutrality case involving mobile video, and lingering concerns about CRTC enforcement, the reality is that Canada's net neutrality rules are broader in scope than the U.S. proposal.  The Canadian net neutrality rules and their enforcement are certainly not perfect, but the Canadian rules (called Internet traffic management practices or ITMPs) are better than those found in the U.S. and may provide a competitive advantage for Internet companies seeking a market without paid prioritization.

Compare the U.S. FCC three rules with the equivalent in Canada. First, the CRTC policy requires transparency about how ISPs manage traffic on their networks:

the Commission directs all primary ISPs, as a condition of providing retail Internet services, to disclose to their retail customers, clearly and prominently on their websites, information related to their technical ITMPs. The ISP must also reference its online disclosures in relevant marketing materials, customer contracts, and terms of service. Online disclosure should include the following information:
  • why ITMPs are being introduced;
  • who is affected by the ITMP;
  • when the Internet traffic management will occur;
  • what type of Internet traffic (e.g. application, class of application, protocol) is subject to management; and
  • how the ITMP will affect a user's Internet experience, including the specific impact on speeds.
Second, the CRTC policy and the law make it clear that content blocking is unlikely to ever be approved:

The Commission notes that the majority of parties are in agreement that actions by ISPs that result in outright blocking of access to content would be prohibited under section 36 unless prior approval was obtained from the Commission. The Commission finds that where an ITMP would lead to blocking the delivery of content to an end-user, it cannot be implemented without prior Commission approval. Approval under section 36 would only be granted if it would further the telecommunications policy objectives set out in section 7 of the Act. Interpreted in light of these policy objectives, ITMPs that result in blocking Internet traffic would only be approved in exceptional circumstances, as they involve denying access to telecommunications services.

Third, paid prioritization - which would result in two-tier speeds based on payment - would face a very tough regulatory road in Canada. Section 27(2) of the Telecommunications Act provides that:

No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

The CRTC has confirmed that this provision applies to Internet services. The statutory language, which incorporates unjust discrimination, undue preferences, and unreasonable prefrences is clearly broader in scope than the proposed FCC Open Internet order. As for its application to net neutrality issues, the CRTC's ITMPs note that:

Where an ITMP does result in discrimination or preference, the Commission considers that establishing that the ITMP is carefully designed and narrowly tailored is important in an evaluation of whether or not the discrimination or preference is unjust or undue.

The framework for analysis requires the ISP to:

Describe the ITMP being employed, as well as the need for it and its purpose and effect, and identify whether or not the ITMP results in discrimination or preference. In the case of an ITMP that results in any degree of discrimination or preference:
  • demonstrate that the ITMP is designed to address the need and achieve the purpose and effect in question, and nothing else;
  • establish that the ITMP results in discrimination or preference as little as reasonably possible;
  • demonstrate that any harm to a secondary ISP, end-user, or any other person is as little as reasonably possible; and
  • explain why, in the case of a technical ITMP, network investment or economic approaches alone would not reasonably address the need and effectively achieve the same purpose as the ITMP.

Paid prioritization would face an uphill battle under this analysis. Moreover, the slow lane of Internet traffic might also face regulatory challenges were an ISP to slow down content in order to create a difference between the two delivery speeds.  The Commission has ruled that:

In the case of time-sensitive audio or video traffic (i.e. real-time audio or video such as video conferencing and voice over Internet Protocol (VoIP) services), ITMPs that introduce delays or jitter15 are likely to cause degradation to the service. The Commission considers that when noticeable degradation occurs, it amounts to controlling the content and influencing the meaning and purpose of the telecommunications in question. Accordingly, the Commission finds that use of an ITMP resulting in the noticeable degradation of time-sensitive Internet traffic will require prior Commission approval under section 36 of the Act.

While Canadian businesses operating in the U.S. market will be affected by the potential loss of net neutrality (creating a potential trade barrier), the Canadian Internet market remains subject to CRTC rules, not the proposed FCC Open Internet order.  Canadian ISPs might always try test the CRTC rules with paid prioritization (much like they are testing mobile video), but for the moment the CRTC's net neutrality rules are stronger than those in the U.S. 

The CRTC has also left no doubt that it has the power to regulate net neutrality. By contrast,  in the U.S., the FCC has botched the issue by treating the Internet as an information service rather than as a communication service. With that statutory background, the Commission adopting a consumer-oriented perspective, and the government seemingly willing to continue its battle against the major telecom companies, Canada may have a competitive advantage when it comes to net neutrality.

Government Buries Massive Trademark Overhaul in Budget Implementation Bill

Michael Geist - Wed, 04/23/2014 - 00:47
It started innocuously enough with the House of Commons Committee on Industry, Science and Technology releasing its long-awaited report on intellectual property in Canada in March 2013. The report included a recommendation that Canada ratify several international patent and trademark treaties, which came as a surprise (particularly to opposition members of parliament) since no witness had raised the issue before the committee.  

Within weeks, the government accepted the recommendation and one year later it moved to ratify the treaties with scant debate or discussion. Yet the ratification of five intellectual property treaties about which few Canadians have ever heard and that seem certain to increase fees for business was only the start.

Indeed, earlier this month, the government quietly included provisions in the budget implementation bill that will radically overhaul Canadian trademark law. My weekly technology law column (Toronto Star version, homepage version) notes those changes have not been subject to any serious debate, discussion or public consultation.  


Unlike copyright and patent laws, which are focused on striking a policy balance between access and protection, the primary purpose of trademark law is consumer protection. Since consumers often rely on trademarks as an easy means of identifying a product or service (prominent examples include the Nike swoosh or McDonald's golden arches), trademark protection helps limit confusion and potential consumer harm.

Given the link between trademarks and consumer protection, it should come as little surprise to find that a key requirement for trademark protection is "use" of the mark. If a company is not using the trademark, there is little risk of confusion and therefore no need for protection.

Legal cases dating back more than one hundred years have long emphasized the importance of use in order to properly register a trademark. A recent Supreme Court of Canada decision confirmed that "while the Trade-marks Act provides additional rights to a registered trade-mark holder than were available at common law, registration is only available once the right to the trade-mark has been established by use."

Despite the long legal history requiring use, the Canadian government is planning to drop the need for use in order to register trademark. If the provisions in the budget implementation bill are enacted, trademarks will be available to signs (which the law says includes everything from words and names to sounds and smells) that are either used or proposed to be used.  

The trademark law community has reacted with alarm to the planned changes.

Experts note that the change may be unconstitutional because a system no longer based on use may unduly encroach on property and civil rights, which falls under provincial jurisdiction. Moreover, many believe that the changes will result in sharply increased costs for Canadian business since the reforms will create considerable legal uncertainty, likely causing a spike in challenges to proposed trademarks.  

The reforms also seem to open the door to "trademark trolls", who could scoop up dozens of unused, proposed trademarks with plans to pressure legitimate businesses to pay up in order to release the trademarks for actual use.

With some in the intellectual property community warning that "instead of simplifying steps for businesses, the Bill proposes a much less useful Register, higher investigation costs, and shifts the onus to police over-reaching to businesses, as opposed to the Trademarks Office", Industry Minister James Moore has surprisingly succeeded in proposing changes that are both anti-business and anti-consumer.  That may be a boon for a few lawyers, but the business community has been left wondering how trademark reforms that no one seems to have requested found their way into a budget implementation bill.

Access Copyright Urges Copyright Board to Ignore Bill C-11's Expansion of Fair Dealing

Michael Geist - Wed, 04/16/2014 - 21:24
As I noted in a post yesterday, Access Copyright has filed its response to the Copyright Board of Canada's series of questions about fair dealing and education in the tariff proceedings involving Canadian post-secondary institutions. Yesterday's post focused on how Access Copyright has urged the Copyright Board to ignore the Supreme Court of Canada's ruling on the relevance of licences to a fair dealing analysis. Today's post examines the collective's response to the Copyright Board's question on the effect of the fair dealing legislative change in Bill C-32/C-11. Access Copyright engages in revisionist history as it seeks to hide its extensive lobbying campaign that warned that the reforms would permit mass copying without compensation.

For two years during the debates over the bill, Access Copyright stood as the most vocal opponent of the expansion of the fair dealing purposes to include education. Given its frequent public comments and lobbying efforts on the bill, one would think its response to the Copyright Board, would be pretty straight-forward. For example, it created a copyright reform website - CopyrightGetitRight.ca - that warned:

the education exception will permit mass, industrial-scale copying (equivalent to millions of books every year) without compensation to the creators and publishers who invested their creativity, skill, money and effort to produce this content.


In the 2010 digital economy consultation, Access Copyright told the government much the same thing:

New exceptions, which create a sudden increase in uncompensated uses of works, will result in significant lost sales and millions of dollars in revenue losses to Canadian content owners from collective licences alone.

Maureen Cavan, then the executive director of Access Copyright said:

Schools won’t have to pay to make reproductions of textbooks and other materials developed to meet the requirements of provincial curricula...the education exceptions may permit mass, high-volume copying (equivalent to millions of books every year) without compensation to the creators and publishers who invested their creativity, skill, money and effort to produce this content.

Access Copyright was asked during the Bill C-32 committee hearings to specify the likely cost.  Roanie Levy, the current Access Copyright executive director, responded:

Based on our study, we believe that about $60 million is at risk as a result of the scope of fair dealing in the education sector, as well as other education-related exemptions provided for in Bill C-32. This is revenue that COPIBEC and Access Copyright collects today for the copying of a chapter here, a page there, for the distribution of works in class, for the use of works in exams. It also includes the royalties that certain film distributors collect from the education sector.
So we're talking about a minimum of $60 million at risk, but you also have to consider that, when a use or reproduction becomes free of charge, an increase in that type of reproduction follows. There will also be a revenue shortfall that will be more difficult to quantify as a result of a decline in sales of texts intended for schools.

Unequivocal positions, which the government rejected by adding education as a fair dealing purpose with no limitations or restrictions. 

Yet when Access Copyright is now asked about the effect of the change, it claims that the legislative change that it once warned would cost $60 million was not a change at all. Instead, its response to the Copyright Board is that the legislative change did not change the law but rather codified the existing law as expressed in the Supreme Court of Canada fair dealing decisions. For example, its response includes the following:

In effect, the majority of the Supreme Court of Canada jurisprudentially expanded the meaning to be afforded "research" and "private study" to include instruction. This decision expanded what was once understood to be limited allowable purposes of private study and research to include copying performed for the purpose of instruction or education. This expansion of the allowable fair dealing purposes was later codified in the amendments to section 29 of the Act. The coming into force of the statutory amendment in November 2012 did not serve to further expand fair dealing because the Supreme Court of Canada had already interpreted the exception as including that purpose. Simply put, and contrary to the apparent position taken by a number of educational users that the legislative amendments further expanded fair dealing in education, the legislative inclusion of education as an express allowable fair dealing purpose simply now accords with the jurisprudence.

There are at least two obvious problems with Access Copyright's attempt to revise history.  The first is its record - in the media, in lobbying campaigns, and before Parliament - that the fair dealing reform in the bill was a significant change that would "permit mass, industrial-scale copying (equivalent to millions of books every year) without compensation to the creators and publishers."

The second is that Access Copyright is attempting to deceive the Copyright Board by suggesting that the legislation came after the Supreme Court of Canada decisions. As it well knows, the Supreme Court of Canada decisions actually came two weeks after Bill C-11 received royal assent. Access Copyright deceptively uses the coming into force date to misleadingly suggest that the law simply codified the court's decisions, when the court's decisions predated the legislative reform. Bill C-11 could not have codified the Supreme Court rulings since the bill passed the House of Commons, the Senate and received royal assent before the release of the Access Copyright decision by the Supreme Court.

Why is Access Copyright attempting to revise history?  Once again, the reasons are obvious. First, the government would not have added education to the fair dealing purposes if it had no meaning at all.  Rather, it was clearly the government's intent to expand the scope of fair dealing to cover more than research and private study. Second, Access Copyright is seeking to deflect attention from the fact that it has already told everyone what it thinks the legislation means. To again repeat its own words from the advocacy site it used to encourage people to speak out about the bill, the reforms "permit mass, industrial-scale copying (equivalent to millions of books every year) without compensation to the creators and publishers."

Access Copyright Urges Copyright Board to Ignore Supreme Court Ruling on Fair Dealing

Michael Geist - Tue, 04/15/2014 - 21:17
Access Copyright has filed its response to the Copyright Board of Canada's series of questions about fair dealing and education in the tariff proceedings involving Canadian post-secondary institutions. I have several posts planned about the 40 page response, which continues the copyright collective's longstanding battle against fair dealing. This one focuses on Access Copyright's astonishing effort to urge the Copyright Board to reject the Supreme Court of Canada's clear ruling on the relevance of licensing within the context of fair dealing.

Access Copyright has frequently argued that the availability of a licence should trump fair dealing. For example, in the 2001 copyright consultation it stated:

As a rule, where collective licensing is in place there should be no exception or limitation to a right for which the holder has a legitimate interest. As defined in the Act, anytime that a licence to reproduce a work is available from a collective society within a reasonable time, for a reasonable price and with reasonable effort, it is commercially available.

Access Copyright reiterated its position in its 2003 intervention in the Law Society of Upper Canada v. CCH Canadian case.  It argued:


Copibec and Access Copyright submit that the obtaining of photocopy licences, when they are offered by collective societies that are authorized by copyright owners to grant licences on their behalf, is an established and readily available alternative to the dealing. Where collective societies have created a workable market for institutional users to obtain licences for the right to reproduce works protected by copyright, courts should acknowledge that the reproduction of such works, absent a licence, will generally affect the potential market for those works, and take this factor into account in any analysis of whether a dealing is "fair."

The Supreme Court of Canada proceeded to directly respond to the Access Copyright argument in its CCH decision. The unanimous court ruled:

The availability of a licence is not relevant to deciding whether a dealing has been fair. As discussed, fair dealing is an integral part of the scheme of copyright law in Canada. Any act falling within the fair dealing exception will not infringe copyright. If a copyright owner were allowed to license people to use its work and then point to a person's decision not to obtain a licence as proof that his or her dealings were not fair, this would extend the scope of the owner's monopoly over the use of his or her work in a manner that would not be consistent with the Copyright Act's balance between owner's rights and user's interests.

That is about as clear cut as you can get: Access Copyright directly raised an argument and the Court unanimously rejected it. So what does Access Copyright do in its brief to the Copyright Board? Go right back to the same argument that the Supreme Court rejected:

In the digital age, the availability of a licence – whether from the rightsholder directly or from the collective that represents the rightsholder – has to be a consideration as to whether there is an alternative to the dealing. (The commercialization of works in a digital environment is done through the issuance of licences as opposed to the sale of physical copies of works.) In this case, a licence is clearly available from Access Copyright: the works in issue are all in Access Copyright’s repertoire. Further, the evidence filed by Access Copyright establishes that licences for the exact excerpt of the works that have been copied are available for purchase from the publishers. Given these alternatives, the copying purportedly permitted by the Policies is unfair.

Unfortunately, this example is only one of many misleading or inaccurate claims in the Access Copyright brief.  More on its effort to deceive the board on the timing of the Supreme Court of Canada's fair dealing decisions and the government's expansion of fair dealing in Bill C-11 in a post tomorrow.

The Expansion of Warrantless Disclosure Under S-4: Government's Response Fails to Reassure

Michael Geist - Sun, 04/13/2014 - 21:09
My post and column on the expansion of warrantless disclosure under Bill S-4, the misleadingly named Digital Privacy Act, has attracted some attention and a response from Industry Canada.  The department told iPolitics:

"Companies who share personal information are required to comply with the rules to ensure that information is only disclosed for the purpose of conducting an investigation into a contravention of a law or breach of an agreement. For example, self-regulating professional associations, such as a provincial law society, may wish to investigate allegations of malpractice made by a client. When organizations are sharing private information, the Privacy Commissioner can investigate violations and may take legal action against companies who do not follow the rules. This is consistent with privacy laws in British Columbia and Alberta and was recommended by the Standing Committee Access to Information, Privacy and Ethics."

The response may sound reassuring, but it shouldn't be.


First, the Privacy Commissioner of Canada can obviously address complaints regarding companies that do not follow the rules. However, the new rules plainly allow warrantless disclosure of personal information for an investigation into 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. This broadly worded exception will allow companies to disclose personal information to other companies or organizations without court approval.

Second, the disclosure itself is kept secret from the affected individual, who is unlikely to complain since they will be unaware that their information has been disclosed. 

Third, allowing a regulated industry to conduct investigations (such as a provincial law society) is a far narrower issue than the wide open warrantless approach found in the bill.

Fourth, 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. 

Yet 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. In response, Industry Canada claims that Canadians can file complaints if the provision is misused, but by definition they will not know that their personal information has been disclosed.
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