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Bell to Employees: Click Here To Support Our Website Blocking Proposal at the CRTC

Michael Geist Law RSS Feed - Tue, 2018/02/20 - 19:29

A source has provided screen shots of internal Bell corporate correspondence encouraging employees to file interventions at the CRTC in support of its website blocking proposal. The effort to drum up support is not unique: ACTRA posted an advocacy page when the proposal launched complete with suggested language to use at the CRTC and OpenMedia has begun supporting Unfairplay.ca, which allows Canadians to learn more about the issue and make their voices heard. However, internal corporate messaging from Bell to its employees telling them “you can let the CRTC know you support FairPlay Canada” is likely to raise concerns Bell will participate in the CRTC process on its own behalf and provide behind-the-scenes encouragement to employees to add supportive interventions. In fact, iPhoneinCanada quickly ran a story on the issue calling the approach “disingenuous.”

 

Bell internal messaging on FairPlay

 

Bell may be particularly vulnerable on the issue since in 2015 it agreed to pay a $1.25 million settlement with the Competition Bureau over encouraging some Bell employees to post positive reviews and ratings on Bell apps in the iTunes Apple Store and Google Play Store. As part of the consent agreement, Bell agreed to enhance its corporate compliance program “with a specific focus on prohibiting the rating, ranking or reviewing of apps in app stores by employees and contractors.” The agreement notes that the Commissioner of Competition concluded that the company-encouraged postings “created the materially false or misleading general impression that they were made by independent and impartial consumers.”

There is nothing on the materials I was provided that indicated Bell also encouraged employees to disclose their affiliation to the company. As of today, there is only one submission of more than 5,200 that lists Bell as the company affiliation (and that intervention is unlikely to be affiliated with Bell). All Canadians can provide their views on the website blocking proposal, but corporate encouragement to employees to participate in regulatory processes on the company’s behalf may raise the kinds of concerns regarding misleading impressions that sparked the Commissioner of Competition to intervene in 2015.

The post Bell to Employees: Click Here To Support Our Website Blocking Proposal at the CRTC appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 6: Over-Blocking of Legitimate Websites

Michael Geist Law RSS Feed - Tue, 2018/02/20 - 10:43

As the public concern over the Bell coalition website blocking plan continues to grow (both the Canadian Press and CBC this weekend covered the thousands of interventions at the CRTC), the case against the plan resumes with a review of why it is likely that it will lead to over-blocking of legitimate websites. Last week’s post highlighted the probable expansion of the scope of piracy for blocking purposes, a theme that continues today with a look at the many incidents over-blocking of legitimate sites sparked by website blocking (other posts in the series include the state of Canadian copyright, weak evidence on the state of Canadian piracy, the limited impact of piracy, and why the absence of a court order would place Canada at odds with virtually all its allies).

The danger of over-blocking legitimate websites raises serious freedom of expression concerns, particularly since experience suggests that over-blocking is a likely outcome of blocking systems. The Council of Europe Commissioner for Human Rights issued a report in 2014 on the rule of law on the Internet in the wider digital world, noting:

blocking is inherently likely to produce unintentional false positives (blocking sites with no prohibited material) and false negatives (when sites with prohibited material slip through the filter). From the point of view of freedom of expression, the most problematic is widespread over-blocking: the blocking of access to sites that are not in any way illegal, even by the standards supposedly applied.

One of the best-known cases of over-blocking arose in Canada in 2005, when Telus unilaterally blocked access to a pro-union website without a court order during a labour dispute. In doing so, it simultaneously blocked access to an additional 766 websites hosted on the same computer server. The blocked sites included an engineering company, an Australian-based site promoting alternative medicine, a U.S. company that recycled electronics parts, and a fundraising site for breast cancer research. Today, Telus is largely dismissive of the blocking incident with an executive telling a House of Commons committee last week that “if you believe that this is the end of the world and the Internet as we know it, Godspeed. I think actually it is what it is.” Indeed, it is what it is: a Canadian telecom company violating what are now recognized as net neutrality rules by blocking hundreds of websites without a court order.

Yet the real danger is that this is not ancient history. Working with University of Ottawa law students Tanvi Medhekar and Matt Westwell, we identified numerous instances around the world in recent years where anti-piracy blocking resulted in over-blocking of legitimate sites. For example, in 2013, UK ISPs blocked access to around 200 legitimate websites including Radio Times. The blocking occurred as a result of a court order targeting two file sharing websites. There have been many similar instances in the UK including the 2012 blocking of the Promo Bay and the 2015 blocking of CloudFlare customers. In fact, OFCOM, the UK regulator, anticipated the over-blocking issue in 2010 study that noted:

We believe that IP address based site blocking is not granular and is likely to lead to over-blocking. This may undermine the confidence in any site-blocking scheme, and create significant liability risks for service providers. The over blocking property is a by-product of sites sharing IP addresses.

The report noted risks of over-blocking with all technical approaches to site blocking.

The UK experience has been replicated in other countries. For example, Argentina blocked access to over a million blogs after a court ordered blocking of two sites. Further, when Argentina blocked access to the Pirate Bay in 2014, it simultaneously blocked access for the entire country of Paraguay, which relies on Argentina and Brazil for its Internet connectivity. India blocked access to hundreds of sites, including Google Docs, after a court ordered blocking of a streaming site in 2014. In 2012, as a result of an order by the Madras High Court to block copyright content, 38 Internet providers, including Airtel, blocked a range of websites including legitimate content on video sharing sites such as Vimeo. Portugal, which the Bell coalition cites as a model, inadvertently blocked a U.S. video game developer in 2016. Most recently, Internet backbone provider Cogent blocked access last year to sites not included on a Spanish court order and Russia blocked access to 40,000 legitimate sites as it took aim at 4,000 sites on a piracy block list. The year before, a Moscow court issued an order blocking 1222 websites but more than 11,000 legitimate sites were blocked in the process.

There are many examples of anti-piracy measures leading to over-blocking, but over-blocking can involve other content filtering. For example, the Australian Securities and Investment Commission, Australia’s financial regulator, revealed that in 2013 it blocked access to 250,000 legitimate sites after previously blocking another 1200 websites (including the Melbourne Free University) in an attempt to block two websites it accused of fraudulent activity. Further, one UK study found that one in five of the most visited sites on the Internet were being blocked by ISP filters.

The Bell coalition website blocking proposal cites a 2017 UK court decision for the proposition that “there is no evidence of overblocking.” Yet that decision only examined blocking arising from several instances involving soccer streaming and did not review the broader evidence on the impact of blocking orders. A more fulsome review reveals that blocking orders frequently lead to over-blocking, potentially affecting tens of thousands or even hundreds of thousands of legitimate websites. Given the hundreds of ISPs in Canada with varying technical capabilities, mandated website blocking as proposed by the Bell coalition would likely lead to over-blocking of legitimate sites with providers left to shrug their shoulders and note that “it is what it is.”

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 6: Over-Blocking of Legitimate Websites appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 5: The Inevitable Expansion of the Block List Standard for “Piracy” Sites

Michael Geist Law RSS Feed - Fri, 2018/02/16 - 10:43

The Bell coalition website blocking proposal downplays concerns about over-blocking that often accompanies site blocking regimes by arguing that it will be limited to “websites and services that are blatantly, overwhelmingly, or structurally engaged in piracy.” Having discussed piracy issues in Canada and how the absence of a court order makes the proposal an outlier with virtually every country that has permitted site blocking, the case against the website blocking plan now turns to the inevitability of over-blocking that comes from expanding the block list or from the technical realities of mandating site blocking across hundreds of ISPs for millions of subscribers. This post focuses on the likely expansion of the scope of piracy for the purposes of blocking and the forthcoming posts will discuss other sources of blocking over-reach.

The Bell coalition’s definition for piracy sites is not found in legislation. Rather, it seeks to effectively draft its own legislative definitions for assessing whether a site or service is blatantly, overwhelmingly or structurally engaged in piracy. Regardless of the standard, the difficulty of identifying “pirate sites” should not be under-estimated. Consider the MUSO report that is the coalition’s primary source of piracy evidence. As I noted in the discussion on the evidence of piracy in Canada, MUSO has developed a list of 23,000 piracy sites which it uses as the basis for estimating the number of piracy visits in Canada. Yet the sample sites used by MUSO highlight the challenge in identifying what constitutes a piracy site, which is a difficult issue for developing reliable statistical data and an even bigger problem with respect to mandated website blocking.

For example, its list of web download sites includes addic7ed.com, a site that contains user-generated sub-titles for television shows and movies. The site includes completed sub-titles and works in progress that allow users to contribute to the translations and sub-titles. It does not contain full video or audio. The legality of user-generated sub-titles may be open for debate (sub-titles can be used for lawfully acquired videos) but few would think of this kind of site as one that is “blatantly, overwhelmingly, or structurally engaged in piracy.”

The MUSO list also contains multiple sites that can be used to capture the video from sites such as YouTube. Stream ripping is a concern for the music industry, but these technologies (which are also found in readily available software programs from a local BestBuy) also have considerable non-infringing uses, such as for downloading Creative Commons licensed videos also found on video sites.

The obvious question is whether the Bell coalition believes these sites meet its standard for blocking. If they do, the standard is far lower than what would be commonly understood as a site or service that is blatantly, overwhelmingly or structurally engaged in piracy. If they fall outside the standard, the validity of the MUSO report is called into question since its estimate of piracy visits in Canada include visits to those sites. In other words, either the scope of block list coverage is far broader than the coalition admits or its piracy evidence is inflated by including sites that do not meet its piracy standard.

Once the list of piracy sites (whatever the standard) is addressed, it is very likely that the Bell coalition will turn its attention to other sites and services such as virtual private networks (VPNs). This is not mere speculation. Rather, it is taking Bell and its allies at their word on how they believe certain services and sites constitute theft. The use of VPNs, which enhance privacy but also allow users to access out-of-market content, has been sore spot for the companies for many years. In 2015, Rogers executive David Purdy reportedly called for shutting down VPNs, while Bell executive Mary Ann Turcke specifically targeted VPN usage to access U.S. Netflix, telling an industry conference:

“It has to become socially unacceptable to admit to another human being that you are VPNing into U.S. Netflix. Like throwing garbage out your car window – you just don’t do it. We have to get engaged and tell people they are stealing. When we were young and made the error of swiping candy bars at the checkout of the grocery store, what did our parents do? They marched us back in, humiliated us, told us to apologize to the nice lady and likely scolded us on the way home.”

In the aftermath of those comments, briefing notes for Canadian Heritage Minister Melanie Joly identified VPNs as an emerging copyright issue. The comments equating VPN use to theft echo the remarks being made today by the Bell coalition about piracy sites and services. Further, since the response to site blocking from some Internet users will surely involve increased use of VPNs to evade the blocks, the attempt to characterize VPNs as services engaged in piracy will only increase. VPN services are already targeted by IP lobby groups such as the IIPA and can be expected to face demands for blocking (similar to the way Netflix and Hulu have cracked down on VPN use).

Beyond VPNs, it would not be surprising to find legitimate services streaming unlicensed content as the next target. With Bell characterizing accessing U.S. Netflix as stealing, the company may call for blocking of content from foreign services without Canadian rights. In fact, that is precisely what Bell argued in 2015 in the context of U.S. television signals. Kevin Crull, then president of Bell Media, told a conference:

Canada is the only country in the world that allows American networks to be retransmitted without restriction despite valid and exclusive copyrights held by domestic broadcasters…Do we need [the American over-the-air] networks? Are these signals necessary for Canadian viewers? No. Canadian networks buy the rights to 99 of the top 100 American shows. No viewer would be denied popular content.

The Bell solution was simple: block U.S. signals on cable and satellite services. The argument in the Internet streaming service context will be the same, namely that Canadian rights holders are having their rights undermined by the accessibility of unlicensed U.S. streams that constitute infringement in Canada. Given the past arguments against access to these sites and services, which Bell coalition members have called “stealing” and “theft”, the steady expansion of the block list seems like an inevitability, which is why the exclusion of Parliament in setting policy and the courts in reaching any determination with respect to blocking is a step in the wrong direction.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 5: The Inevitable Expansion of the Block List Standard for “Piracy” Sites appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 4: Absence of Court Orders Would Put Canada At Odds With Almost Everyone

Michael Geist Law RSS Feed - Thu, 2018/02/15 - 10:21

The first three posts in the case against the Bell coalition website plan focused on why it has failed to provide convincing evidence that the drastic step of site blocking is needed (existing law, weak evidence on Canadian piracy, limited negative impact on the market). The series continues by examining some of the problems with the proposal itself. One of the most obvious problems – indeed one that is fatal – is the absence of court orders for website blocking. The attempt to avoid direct court involvement in blocking decisions means the proposal suffers from an absence of full due process, raising a myriad of legal concerns. If adopted, the coalition website plan would put Canada at odds with almost every other country that has permitted blocking since the data is unequivocal: the overwhelming majority require a court order for site blocking.

The website blocking coalition has tried to downplay the absence of a court order from its proposal by suggesting that many countries have site blocking rules and that relying on alternate systems is commonplace. Its application states that at least 20 countries have site blocking, some with courts (the UK) and some without (Portugal). An examination of website blocking around the world reveals the inference that non-court ordered blocking is commonly used is misleading and inaccurate.

Just how rare is non-court ordered blocking? Working with Amira Zubairi, a University of Ottawa law student, we examined 22 countries that have or have had some form of copyright-related website blocking. Some groups say that there are 27 countries with website blocking, but we excluded five countries due to widespread censorship in their blocking systems: Saudi Arabia (which features government-backed Internet blocking), Indonesia (which has blocked 800,000 sites), Malaysia (which regularly uses the power to block legitimate sites), Turkey (which uses real-time large scale blocking of sites including Wikipedia) and South Korea (which uses censors to block access to thousands of web pages).

Our research shows that of the 22 countries that have site blocked for copyright purposes, 20 use or have used court orders (the exceptions are Portugal (which is voluntary) and Italy (which permits both)). Of course, there are many notable countries, including the United States, Japan, Switzerland, Mexico (whose Supreme Court ruled blocking is disproportional) and New Zealand, that do not have site blocking at all.

Comparative Analysis of Copyright Website Blocking Oversight

Country
Court/No Court
Cases/Experience Argentina Court The Argentinean National Communications Commission ordered ISPs to block access to the Pirate Bay after a Buenos Aires court issued an injunction. Australia Court Rights holders can apply to the Federal Court for an injunction directing ISPs to block access to websites that infringe copyrighted content when: the geographical origin of the website is outside of Australia, and when the website has the primary purpose of infringing or facilitating the copyright infringement. The Australian system is under review. Austria Court Austrian courts can issue injunctions that can be imposed on ISPs to prohibit them from allowing customers to access certain websites. In 2016, an appellate court removed a block on the Pirate Bay, however, ruling that rights holders had failed to exhaust all available remedies. Belgium Court In 2011, a Belgian appellate court overturned a lower court ruling that found that blocking was disproportionate to allow for the blocking of the Pirate Bay. Chile Court Chile adopted a new law in 2010 regulating ISP liability for online copyright infringement. The law requires a court order before ISPs are required to take down allegedly copyright-infringing material from websites, block access to an allegedly infringing website, disclose customer information, or terminate customers’ Internet accounts. Denmark Court In 2015, a Danish court ordered the blocking of 12 sites. Denmark was the first country to order the blocking of the Pirate Bay. Finland Court Section 60(c)(1) of the Finland Copyright Act allows courts to issue an injunction to discontinue and order intermediaries to discontinue the making of allegedly copyright infringing material available to the public where requirements set out in the provision are fulfilled. In 2011, a Helsinki court ordered the blocking of the Pirate Bay. France Court Article L. 336-2 of the French Intellectual Property Code allows rights holders to seek a court order to have ISPs implement measures to stop or prevent online copyright infringement. Germany Court In November 2015, the German Supreme Court in Karlsruhe ruled ISPs might be responsible for blocking websites offering illegal music downloads, but only if copyright holders showed they had first made reasonable attempts to stop such piracy by other means. Greece Court Copyright holders can apply for injunctions against intermediaries who facilitate access to third party infringers (Article 64A of the Copyright Law), such as websites that are used for dissemination of music and film. In 2015, an Athens Court ruled that barring access to torrent sites is disproportionate and unconstitutional, while hindering the ISPs’ entrepreneurial freedoms. Iceland Court In October 2014, the Reykjavík District Court ordered two ISPs (Hringdu and Vodafone) to block the Pirate Bay. India Court India courts have issued orders for ISPs to block access to sites such as the Pirate Bay. Ireland Court In April 2017, nine ISPs were ordered to block access to three websites. In January 2018, the Commercial Court in Dublin ordered eight sites blocked. Italy Both Italian courts can issue blocking orders. In addition, the broadcast and telecommunications regulator Authorities for Guarantees Communication (AGCOM) has the power to issue website blocking injunctions. Netherlands Court Under Article 26d of the Copyright Act, and Article 15e of the Neighbouring Rights Act, district courts can issue an injunction to prevent copyright and other rights’ infringements through the services of intermediaries, by ordering the intermediaries to cease services used for infringements. The Supreme Court is currently considering whether blocking is a proportionate sanction. Norway Court In 2015, Norway Oslo District Courthouse ruled that all ISPs and access providers must block the TLDs of a number of torrent tracers like the Pirate Bay. Six different torrent trackers/pirating websites were blocked. Portugal No Court, Voluntary Proess A voluntary process was formalized through an agreement between ISPs, rights holders, and the Ministry of Culture and the Association of Telecommunication Operators, which allows copyright holders to add new sites to a blocklist without any intervention or oversight from a court. Russia Court Courts can order ISPs and web-hosts to permanently block websites that provide access to infringing content. Singapore Court Section 193DDA(1) establishes under the Singaporean Act (Copyright Act) that courts can award an injunction against an ISP if the services of the ISP have been or are being used to access an online location to commit or facilitate copyright infringement, and the online location is a flagrantly infringing online location. In February 2016, Singapore’s High Court ordered local ISPs including Singtel, StarHub, and M1 to disable access to SolarMovie.ph. Spain Court In March 2012, the Spanish government approved the Sinde Law that requires websites with pirated material to be blocked within 10 days. The legislation created a government body that has the power to force ISPs to block sites. Rights holders can report websites hosting infringing content to a government commission. A court ultimately rules on whether to block the site. Sweden Court In March 2017, a Swedish court ordered an ISP to block file-sharing websites. On February 13, 2017, the Swedish Patent and Market Court (part of the Svea Court of Appeals), in a judgment of final instance, issued a decision requiring the ISP, B2 Bredband to block access to the file-sharing sites the Pirate Bay and Swefilm. United Kingdom Court Copyright owners can use Section 97A of the Copyright, Designs and Patents Act 1988 to secure mandatory blocking orders against copyright infringing websites, which must be enforced by major ISPs like BT, Sky Broadband, and Virgin Media.

 

The comparative data confirms that website blocking for copyright purposes is still quite rare. In those countries that have had it, the most common case involves a court action targeting the Pirate Bay. Moreover, the use of courts highlights how due process concerns are addressed. Courts in several countries, including Mexico, Austria, and Greece, have ruled that site blocking is disproportionate, noting that copyright owners may have failed to exhaust other potential remedies. In fact, just last week the Supreme Court of Canada established a higher threshold for the takedown of content online, shifting away from last year’s Google v. Equustek decision and signalling the importance of having courts consider all rights when seeking to block access to content online.

The absence of a court order means the Bell coalition website blocking proposal would place Canada offside almost all countries that permit blocking. The issue was unsurprisingly the immediate sticking point at a hearing on net neutrality at the Standing Committee on Access to Information, Privacy and Ethics this week where Liberal MP Nathaniel Erskine-Smith immediately focused on the due process concerns with the site blocking proposal. Rogers executive Pam Dinsmore responded that “there is an enormous amount of due process built into the application”, citing the piracy agency review, the CRTC approval and the possibility of an application to the Federal Court of Appeal. However, courts do not issue the block order and the potential for court involvement arises only after a site has been added to the block list and approved by the CRTC.

Further, in questioning from NDP MP Brian Masse about site blocking moments earlier, Rogers’ Dinsmore suggested that the company would only block with a court order:

I think what you’re asking is if an ISP is ordered to block a website by a court, at what stage does the ISP actually do that blocking if in fact that decision gets appealed? It’s a fair question. Presumably we would be obliged, under a blocking order, to block a given website unless there was a stay to the order that was applied for by the website provider, in which case if there was a stay of the decision, pending the appeal and the conclusion of the appeal, then we would not block that website for that time period. But unless there was a stay to the decision, we would be obliged to block, and we would never as an ISP, in this context we wouldn’t block unless there was a blocking order. We wouldn’t take it upon ourselves to make the determination on whether content is legal or illegal. We would await the court order and ergo we would follow it.

Yet the website blocking proposal that Rogers supports would remove the need to wait for a court order.

The proposal is clearly inconsistent with the vast majority of countries around the world. Notwithstanding assurances that there are many systems that do not depend on court orders, the reality is that almost everyone with a free and open Internet only engages in the possibility of website blocking with a court order. The failure to include one – indeed the very point of the Bell coalition proposal seems to be to avoid the court process – would put Canada at odds with almost all our allies and likely be subject to an immediate legal challenge given our rules on openness, net neutrality, and due process.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 4: Absence of Court Orders Would Put Canada At Odds With Almost Everyone appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 3: Piracy Having Little Impact on Thriving Digital Services and TV Production

Michael Geist Law RSS Feed - Wed, 2018/02/14 - 10:55

The case against the Bell coalition’s website blocking plan continues with an examination of the state of new digital business models and Canadian content production (earlier posts looked at Canadian copyright law and weak evidence on Canadian piracy). Given the high threshold needed to gain CRTC support for website blocking (which requires exceptional circumstances), the coalition proposal must not only make the case that there is a significant Canadian piracy problem, but also that piracy is having an enormous impact on the business and creative sectors.

The proposal tries to meet that standard by claiming that Canadian piracy “makes it difficult if not impossible to build the successful business models that will meet the evolving demands of Canadians, support Canadian content production, and contribute to the Canadian economy.” Yet as with the actual data on Canadian piracy, which firmly rebuts claims that Canada is a piracy haven, the Canadian data on the digital economy and Canadian creative sector show a thriving industry.

Supporting Canadian Content Production

As I noted in a recent post on the latest data from the Canadian Media Producers Association, the total value of the Canadian film and television sector exceeded $8 billion last year, over than a billion more than has been recorded over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production.

If the standard the CRTC is to consider involves support for Canadian content production, the situation has never been better. Canadian content production hit an all-time high last year at $3.3 billion, rising by 16.1%. Notably, the increased expenditures do not come from broadcasters, who lead on the website blocking proposal and whose relevance continues to diminish year-by-year. In fact, the private broadcasters (led by Bell) now contribute only 11% of the total financing for English-language television production. Their contribution is nearly half of what it was just three years ago (now standing at $236 million) in an industry that is growing. Yet despite the private broadcaster decline, money is pouring into the sector from distributors (who see benefits of global markets) and foreign financing (which has grown by almost $200 million in the past four years) leading the way. The sector remains heavily supported by the public, with federal and provincial tax credits now accounting for almost 30% of financing.

The increase in foreign investment in production in Canada is staggering. When Netflix began investing in original content in 2013, the total foreign investment (including foreign location and service production, Canadian theatrical, and Canadian television) was $2.2 billion. That number has doubled in the last five years, now standing at nearly $4.7 billion. While much of that stems from foreign location and service production that supports thousands of jobs, foreign investment in Canadian television production has also almost doubled in the last five years

The increasing irrelevance of private broadcasters for financing Canadian television production is particularly pronounced in the fiction genre (ie. drama and comedy shows). This is easily the most important genre from an economic perspective, with $1.29 billion spent last year. Private broadcasters only contributed $59 million or five percent of the total. By comparison, foreign financing was $285 million. In sum, the data confirms that there has never been more money invested in film and television production in Canada.

Supporting Digital Business Models

The Canadian data on digital business models also points to a steady stream of success stories that refute claims that it is difficult if not impossible to create successful business models in Canada.  Online video services, which the Bell coalition suggests are harmed by streaming sites, are experiencing rapidly expanding revenues, now generating more than $1 billion per year. In fact, two Canadian online video services – CraveTV and Club illico – are estimated to have earned $373 million last year, up from just $13 million four years earlier.

Bell CEO George Cope confirmed the success during a recent quarterly conference call, stating:

Crave strategy continues to work for us number of customers up 22% year-over-year, allowing us to have a product that you can view through traditional linear TV or and over-the-top environment.

The positive data sparked a question from Drew McReynolds about the rate of cord cutting:

on cord cutting, cord shaving trends overall, you are obviously doing quite well on Crave and Alt TV, wondering if you’re seeing in the TV market a real structural acceleration, let’s say over the last 6 to 12 months or is it more of a steady acceleration or steady kind of rate of cord cutting, cord shaving?

Cope’s response:

It seems steady to me – clearly we have not seen some acceleration, but we notice a growing share and we got to be in, you know we absolutely have to be in that space in the market place, so we actually saw some growth and you know from a pay sub perspective, but we haven’t seen a sudden acceleration and you can – the industry will now take the total TV net adds and be able to see that you know the decline in, and I don’t think that rate has accelerated

Simply put, Canada is now one of the world’s leading markets for online video services. According to the Reuters Institute Digital News Report 2017, Canada ranks among the top countries for consumers paying for online video services. There are now approximately 20 subscription streaming services in Canada and surveys indicate that more than half of all English-language households subscribe to Netflix. In fact, the data indicates that a higher percentage of Canadians pay for online video services than consumers in countries with site blocking such as Australia and the U.K.

That is not a market where digital business models can’t succeed due to piracy. Rather, the data confirms Canadians’ willingness to pay for well-priced, convenient services, which has presumably prompted CBS to expand its streaming service to Canada, following on Amazon’s recent streaming video entry. Record earnings, a top tier global ranking for subscribers, and new market entrants are the sign of a thriving market, not one struggling to survive due to claims of piracy.

The Canadian success story is not limited to online video as the online music market has experienced similar growth. According to industry data, the Canadian music market is growing much faster than the world average (12.8% in 2016 vs. 5.9% globally), streaming revenues more than doubled last year to US$127.9 million (up from US$49.82 million) growing far faster than the world average, the Canadian digital share of revenues of 63% is far above the global average of 50%, and Canada has leaped past Australia to become the 6th largest music market in the world. The numbers are big for music creators as well. SOCAN, Canada’s largest music copyright collective, recently reported that its Internet streaming revenues rose 46% last year, nearly hitting $50 million annually. In 2013, that number was only $3.4 million.

Nordicity recently issued a detailed look at trends in the creative industries, summarizing the situation in the following manner:

In 2016, it was noted that OTT (over-the-top video) takes a piece of subscriber revenues from BDUs, as well as from pay/specialty broadcasting services. Newly recognized is both the disruptive impact on television and also the opportunity for content producers.

The opportunity for creators is the theme of Canadian Heritage Minister Melanie Joly’s vision for the sector, which focuses on encouraging investment in Canada and sales to foreign markets. The data suggests great success in this regard, demonstrating that the Bell coalition’s claims about the impossibility of building successful business models due to piracy bear little resemblance to the reality of the Canadian market.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 3: Piracy Having Little Impact on Thriving Digital Services and TV Production appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 2: Weak Evidence on the State of Canadian Piracy

Michael Geist Law RSS Feed - Tue, 2018/02/13 - 11:15

Having examined the state of current Canadian copyright law with respect to anti-piracy measures, the series outlining the case against the Bell coalition’s website blocking plan continues with an examination of the evidence on Canadian piracy. The coalition argues that piracy in Canada is a growing threat, relying on data from MUSO to suggest that current activities “makes it difficult if not impossible to build the successful business models that will meet the evolving demands of Canadians, support Canadian content production, and contribute to the Canadian economy.” My next post will discuss economic evidence in Canada, highlighting record growth in authorized streaming services and production in the Canadian creative sector. This post is limited to data on Canadian piracy rates and whether drastic measures such as website blocking are needed.

Before discussing piracy in Canada, it is important to emphasize that critiquing the data on piracy does not make one “pro-piracy.” No one denies that infringing activity takes place, whether in Canada or elsewhere. Rather, website blocking represents a significant reform with major costs and implications for freedom of expression, net neutrality, and the balanced enforcement of intellectual property rights. Without a compelling case that piracy in Canada is particularly severe – and evidence that the proposed solution will have a major impact on piracy rates – the risks and costs associated with such a plan will outweigh any perceived benefits.

Canadian Studies on Piracy Rates

The most recent Canadian government backed report on piracy is the Circum Network study from 2016. The Bell coalition submission cites the report in support of the claim that Internet providers should play a role in combatting piracy. Yet the report contained few recommendations and did not find much enthusiasm among Canadian stakeholders for investing in anti-piracy activities (which may help explain why existing tools are not being used). The report states that “Canadian representatives of rights holders consulted as part of this study tended not to give online piracy fighting a high priority. While they condemn unauthorized access to intellectual property and while some rights holders indicated actively reacting, they generally considered that their scarce resources are better invested in other battles and counted on global organizations to pursue the fight.” In fact, there was even disagreement among those rights holders that supported government action. While some wanted law enforcement to escalate the piracy issue, others preferred to focus primarily on education efforts.

Those views are echoed in other reports. For example, a 2017 report from the Canada Media Fund noted that “some industry watchers have gone so far as to suggest that piracy has been ‘made pointless’ given the possibility of unlimited viewing in exchange for a single monthly price”, a reference to the commercial success of services such as Netflix and other online video streaming services that now generate more than $1 billion per year in Canada in revenue.

In addition to the commercial success in Canada that refute claims that it is near-impossible to establish successful business models, the data consistently shows that Canada is not a global leader when it comes to piracy. For example, Music Canada recently reported that Canada is well below global averages in downloading music from unauthorized sites (33 per cent in Canada vs. 40 per cent globally) or stream ripping from sites such as YouTube (27 per cent in Canada vs. 35 per cent globally.

The lower Canadian piracy rates are also reflected in data from CEG-TEK, one of the most prolific (mis)users of the notice-and-notice system, which reported in 2015 that there were “massive changes” in the Canadian market after the new copyright legal rules were established. In fact, it noted that the biggest decrease in piracy occurred on Bell’s network:

•    Bell Canada – 69.6% decrease
•    Telus Communications – 54.0% decrease
•    Shaw Communications – 52.1% decrease
•    TekSavvy Solutions – 38.3% decrease
•    Rogers Cable – 14.9% decrease

Similarly, the Business Software Alliance reports that Canada is at its lowest software piracy rate ever, well below global and European averages.

The MUSO Report: Declining Piracy Rates and Questionable Assumptions

The Bell coalition website blocking proposal ignores this data, putting its eggs primarily in one basket: a MUSO study on the state of Canadian piracy (Sandvine data that 7% of North American households subscribe to unauthorized services leaves 93% not subscribing to such services, which does not advance their argument nor does it involve Canadian-specific data). The MUSO study comes up with a big number – 1.88 billion visits to piracy sites in Canada. Yet a closer look at the study shows that Canadian piracy rates declined during the study period. Moreover, there are very questionable assumptions that call into question the validity of the data and highlight why definitions of “piracy sites” is subject to considerable manipulation.

The report itself plainly states that Canadian piracy rates declined during the study period. It points to the trends in the first six months vs. the last six months:

Metric
Trend
Piracy Sites Visits (Overall) -5.4% Streaming Sites -2.89% Web Download Sites -1.37% Public Torrent Sites -26.78% Private Torrent Sites -8.38%

 

In other words, for every type of site measured by MUSO, Canadian traffic declined during the study period.

Beyond the decline in piracy visits, the study is subject to questionable assumptions that raise questions about the validity of the data.  Underlying the MUSO data is website traffic information from SimilarWeb, which samples traffic in countries around the world. There have been several studies that found that SimilarWeb is prone to over-estimating website traffic (here, here), which could mean the overall number is inflated.

Even if the visits are accurate, the MUSO data captures many sites that fall outside the types of piracy sites most envision. The company takes its own list of 23,000 piracy sites and uses the SimilarWeb data as the basis for concluding the number of piracy visits. Yet the sample sites used by MUSO highlight the challenge in identifying what constitutes a piracy site. For example, web download sites include addic7ed.com, a site that contains user-generated sub-titles for television shows and movies. The site includes completed sub-titles and works in progress that allow users to contribute to the translations and sub-titles. It does not contain full video or audio. The legality of user-generated sub-titles may be open for debate (sub-titles can be used for lawfully acquired videos) but few would think of this kind of site as “blatantly, overwhelmingly, or structurally engaged in piracy.” The MUSO list also contains multiple sites that can be used to capture the video from sites such as YouTube. Stream ripping is a concern for the music industry, but these technologies (which are also found in readily available software programs from your local BestBuy) also have considerable non-infringing uses, such as for downloading Creative Commons licensed videos also found on video sites.

Where the site used in the database is widely viewed as a “piracy” site, the data doesn’t always support claims that website blocking is an effective tool for reducing site visits. For example, putlocker.is identified by MUSO as sample streaming site. Indeed, the site is on the blocklist in both Australia and the United Kingdom (both established through court rulings, not the administrative process envisioned by the Bell coalition). SimilarWeb has the latest data for site visits to Putlocker.is with Canada ranking below both Australia and the UK as a traffic source, despite inclusion on a blocklist in the latter two countries. Canada is also declining faster as a traffic source than Australia, the UK, and the United States (which is easily the top source of traffic).

None of this data is meant to justify infringing activity. However, claims that Canada is a piracy haven are not supported by the data. If anything, the data supports the view that Canadians are rapidly shifting away from unauthorized sites toward legal alternatives as better, more convenient choices come into the market. More on that side of the story in tomorrow’s post.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 2: Weak Evidence on the State of Canadian Piracy appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 1: Canada’s Current Copyright Law Provides Effective Anti-Piracy Tools

Michael Geist Law RSS Feed - Mon, 2018/02/12 - 12:49

The Bell coalition’s website blocking proposal has sparked a huge public outcry, with thousands of Canadians submitting interventions to the CRTC opposing a plan premised on website blocking without direct court involvement. I have written several posts on the issue – a general assessment on why it is a terrible idea, a closer look at the economic reality of the Canadian film and television sector, and a discussion of Bell’s inconsistent comments to the CRTC vs. business analysts – but the case against the radical plan merits a closer look at both the evidence and the legal arguments. With this post, I begin a new series that will make the case against the Bell coalition’s website blocking plan.

The series begins with the initial response to the plan from Innovation, Science and Economic Development Minister Navdeep Bains, who stated:

We understand that there are groups, including Bell, calling for additional tools to better fight piracy, particularly in the digital domain. Canada’s copyright system has numerous legal provisions and tools to help copyright owners protect their intellectual property, both online and in the physical realm. We are committed to maintaining one of the best intellectual property and copyright frameworks in the world to support creativity and innovation to the benefit of artists, creators, consumers and all Canadians.

Bains was right to note that Canada already has many legal provisions designed to assist copyright owners. In fact, Canada has some of the world’s toughest anti-piracy provisions, which Bell and others have actively used in recent years. This includes lawsuits against set-top box distributors, mod-chip sellers, and websites such as TVAddons. Some of these lawsuits have resulted in massive damage awards running into the millions of dollars.

Further, Canadian copyright law has also been used to shut down websites whose primary purpose is to enable infringement with rights holders relying on an “enabler provision” contained in the 2012 copyright reforms that can be used to target online sites that provide services primarily for the purpose of infringement. It states:

It is an infringement of copyright for a person, by means of the Internet or another digital network, to provide a service primarily for the purpose of enabling acts of copyright infringement if an actual infringement of copyright occurs by means of the Internet or another digital network as a result of the use of that service.

The factors to determine whether the provision applies include:

  • whether the person expressly or implicitly marketed or promoted the service as one that could be used to enable acts of copyright infringement;

  • whether the person had knowledge that the service was used to enable a significant number of acts of copyright infringement;

  • whether the service has significant uses other than to enable acts of copyright infringement;

  • the person’s ability, as part of providing the service, to limit acts of copyright infringement, and any action taken by the person to do so;

  • any benefits the person received as a result of enabling the acts of copyright infringement; and

  • the economic viability of the provision of the service if it were not used to enable acts of copyright infringement.


This powerful legal tool is made even stronger by the existence of statutory damages in Canada that can lead to millions in liability for infringement. In fact, Canada is in the minority of countries that even has statutory damages as most require evidence of actual damages. The combination of specific provisions to target sites that facilitate infringement with the possibility of enormous damage awards means that Canada already has tough copyright laws in place to combat piracy.

Yet the Bell coalition is effectively arguing that it needs more laws or legal tools to target non-Canadian sites that may be accessed by Canadians. However, Canadian law already provides for injunctive relief in appropriate circumstances with the Supreme Court of Canada’s Equustek decision one of the more recent manifestations of courts issuing orders to non-parties in support of intellectual property rights.

There is no guarantee that courts will issue such an injunction – courts around the world have consistently identified the challenge of balancing protection of intellectual property rights with the implications of site blocking on freedom of expression – but a comprehensive, impartial court review with full due process is precisely what should be required before the power of the law is used to block access to content on the Internet. Copyright owners are seeking to create their own system at the CRTC without direct court involvement or policy review by Parliament. Before entertaining such a possibility, they should surely be required to test the effectiveness of existing law.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 1: Canada’s Current Copyright Law Provides Effective Anti-Piracy Tools appeared first on Michael Geist.

Sending a Different Message: After Bell Website Blocking Coalition Warns About Cord Cutting, Bell CEO Says It Isn’t Accelerating

Michael Geist Law RSS Feed - Fri, 2018/02/09 - 10:10

The Bell coalition website blocking proposal places considerable emphasis on the impact of cord cutting, a reference to television subscribers canceling their service. Earlier this week, I blogged about CMPA data that called into question claims of negative impacts on the industry, with the actual data confirming record investment in Canadian television and film production and more than a billion dollars being spent annually by consumers on authorized video services such as Netflix, CraveTV, and Club illico.

While the Bell coalition wants the CRTC to believe that there is urgent problem requiring a radical regulatory solution (it acknowledges the CRTC can only authorize blocking in exceptional circumstances that further the objectives of the Telecommunications Act), Bell’s own commentary to financial analysts strike a much different tone. During yesterday’s quarterly earnings conference call with analysts, Bell executives said absolutely nothing about piracy or website blocking, instead emphasizing the success of both its TV and online streaming services. For example, CEO George Cope stated:

So IPTV, I think, was also – I think, we’ve reviewed a strong with 32,000 net adds and was our best quarter for satellite TV since Q2 2014, where we saw an improvement this year in losses of 30%. Overall, we added 11,000 new TV subscribers in our wireline footprint, and we also continue to see an acceleration in the rates of decline of NAS losses. So 34% less customers on last year left us, and in fact, for another quarter, I think, that’s four quarters in a row, in our fiber footprint, we’ve actually had positive NAS growth.

In other words, Bell is adding subscribers and overall declines are slowing down. In fact, Cope noted Internet streaming was a key source of growth:

Crave strategy continues to work for us number of customers up 22% year-over-year, allowing us to have a product that you can view through traditional linear TV or and over-the-top environment.

The positive data sparked a question from Drew McReynolds about the rate of cord cutting:

on cord cutting, cord shaving trends overall, you are obviously doing quite well on Crave and Alt TV, wondering if you’re seeing in the TV market a real structural acceleration, let’s say over the last 6 to 12 months or is it more of a steady acceleration or steady kind of rate of cord cutting, cord shaving?

Cope’s response:

It seems steady to me – clearly we have not seen some acceleration, but we notice a growing share and we got to be in, you know we absolutely have to be in that space in the market place, so we actually saw some growth and you know from a pay sub perspective, but we haven’t seen a sudden acceleration and you can – the industry will now take the total TV net adds and be able to see that you know the decline in, and I don’t think that rate has accelerated

Telling regulators one thing and emphasizing something different to business analysts is nothing new. In 2016, I noted that Bell told cabinet that its scale of investment in fibre would be affected by a CRTC decision even as a company executive told a business audience that Bell’s plan was to eliminate their copper network altogether. Indeed, then-chair Jean-Pierre Blais noticed it too:

Oddly enough, as they were saying one thing to us about slowing down investments, they were having a completely different dialogue with the investors and saying quite the opposite.  I don’t know what they think we read and don’t read, but I’ve got some very, very smart people working for me at the CRTC and we read investor reports, we read what’s in the news, we know what’s happening. So it goes straight to credibility when you make arguments in front of us one day and take a completely different position when you’re in an investor or shareholder call.

The current CRTC chair Ian Scott would do well to ask the Bell coalition why it says one thing in its application for website blocking and paints a much different picture on the state of its business on investor calls.

The post Sending a Different Message: After Bell Website Blocking Coalition Warns About Cord Cutting, Bell CEO Says It Isn’t Accelerating appeared first on Michael Geist.

Trudeau Puts An End to the Netflix and ISP Tax Debate: “Consumers…Pay Enough for Their Internet”

Michael Geist Law RSS Feed - Thu, 2018/02/08 - 09:50

For the past two years, the prospect of creating a Netflix tax or Internet tax has been the digital policy issue that would not die in Canada. The Standing Committee on Canadian Heritage called for an Internet tax last June, the province of Quebec remains anxious to pay digital sales taxes (there is nothing stopping them from doing so now), and many creator groups continue to the call for mandated contributions on Netflix to “level the playing the field” (the level playing field argument is misleading). The uncertainty surrounding Netflix and ISP taxes has not been helped by the reopening of the issue at the CRTC after the release of the government’s digital Cancon strategy and Canadian Heritage Minister Melanie Joly’s occasionally leaving the door open to the possibility.

This week, however, the opposition NDP twice raised the prospect of a Netflix tax with Prime Minister Justin Trudeau in the House of Commons during Question Period and he proceeded to firmly shut the door on the proposal. On Monday, NDP MP Peter Julian asked:

Speaking of letting the wealthy off the hook, the government seems more than happy to let web giants continue to make huge profits without contributing to the Canadian economy. While the rest of the world is trying to make these companies pay, the Liberals are doing the opposite. They are making deals with Netflix and other companies, and offering massive tax breaks. Canadians pay their taxes and expect companies to do the same. When will the Liberals start making web giants pay their fair share?

Trudeau responded:

Mr. Speaker, the NDP is proposing to raise taxes on the middle class, which is something we promised we would not do and have not done. We explicitly promised in the 2015 election campaign that we would not be raising taxes on Netflix. People may remember Stephen Harper’s attack ads on that. They were false. We actually moved forward in demonstrating that we were not going to raise taxes on consumers, who pay enough for their Internet at home.

On Tuesday, NDP MP Guy Caron went back to the issue:

Mr. Speaker, when we ask him why web giants like Netflix and Facebook do not have to charge sales tax even though their Canadian competitors do, the Prime Minister says that he promised not to raise taxes for the middle class. We are talking about a tax that already exists, sales tax. We want fairness in the industry. It is unacceptable that the Prime Minister does not have the courage to ask web giants to pay their fair share. When will the Prime Minister understand that and insist on fair treatment for the entire industry?

Trudeau’s response:

Mr. Speaker, once again, as the NDP has said, web giants must pay their fair share. It is not web giants that the NDP wants to charge, it is taxpayers. The New Democrats want to make taxpayers pay more taxes. They want Canadians, Quebec and Canadian taxpayers, to pay more taxes for their online services. We, on this side of the House, promised not to raise taxes for taxpayers, and we are going to stand by that promise. If the New Democrats want to raise taxes for Canadians, they should say so instead of hiding behind talk of big corporations.

There were follow-up questions and answers each day that largely repeated the same message. Trudeau’s response provides an unequivocal end to the possibility of a Netflix digital sales tax, a mandated Netflix contribution, or an ISP tax. The government’s position is that it has promised no Netflix taxes and it plans to stand by that commitment. Moreover, Trudeau rightly recognizes that the calls for new taxes would increase the cost of Internet services, a policy that runs directly counter to the government’s goal of universal, affordable Internet access. As for a digital sales tax, Trudeau breaks through the rhetoric of Netflix paying such a tax by reminding proponents that providers do not pay the tax, consumers do.

Despite industry data that undermines the argument, cultural groups have been holding out for new taxation and regulation of Internet services for several years. Given the responses this week in the House of Commons from the Prime Minister, it is readily apparent the policy measures do not have the support of the government.

The post Trudeau Puts An End to the Netflix and ISP Tax Debate: “Consumers…Pay Enough for Their Internet” appeared first on Michael Geist.

Canadian Copyright Diplomacy: My Appearance before the Senate Standing Committee on Foreign Affairs

Michael Geist Law RSS Feed - Wed, 2018/02/07 - 11:49

Last week, I appeared before the Senate Standing Committee on Foreign Affairs as part of its study on the impact and utilization of culture and arts in foreign policy and diplomacy. I was asked to consider the impact of Canadian copyright in foreign diplomacy, leading to an interesting and engaging discussion that touched on everything from the changes to the IP provisions in the TPP to the legality of streaming services. My opening remarks, which emphasized the potential for Canada to engage in copyright diplomacy by serving as model for other countries, is posted below.

Appearance before the Senate Standing Committee on Foreign Affairs, February 1, 2018

Good morning. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law, and I am a member of the Centre for Law, Technology, and Society. My areas of specialty include digital policy, intellectual property, and privacy. I appear in a personal capacity representing only my own views.

I have limited time, but will begin with a bit of myth-busting when it comes to the state of Canadian copyright and the cultural market. This is relevant since it has a direct impact on three areas linked to your study: (1) external pressures to reform domestic laws, (2) the prospect of using Canadian copyright laws to influence reforms in other countries, in a sense engaging in copyright diplomacy; and (3) the interaction between Canadian copyright law and our sometimes contentious trade agreement negotiations.

Canadian copyright law in perspective

It is essential to state clearly and proudly that Canada meets its international commitments with respect to copyright. Indeed, we are viewed by many as a leader: a leader in offering strong protections for creators, a leader in striking a balance for fair access and innovation, and a leader in crafting innovative rules that are worthy of emulation by others.

Canada’s compliance with international standards can be found in every aspect of our law. We are a member in good standing with every major copyright treaty. We meet the international standard for term of copyright protection, we offer creators protection for both economic and moral rights, and we have some of the toughest anti-piracy laws in the world.

Canada also increasingly sets the standard for progressive approaches on access.  We have unique provisions to protect user generated content and educational access to Internet materials, we seek to strike a fair balance on the rights of creators and users in addressing online infringement allegations, we have a flexible user rights framework that protects creator interests on issues such as parody, satire, and criticism, journalists’ interest in news reporting, and research and teaching interests in all levels of Canadian schools and education.

The impact on the market

The impact of a balanced, progressive law compliant with international standards can be felt throughout the cultural sector.

For example, the days of worrying whether consumers would pay for music are largely over with the Canadian music market growing much faster than the world average, streaming revenues more than doubling in 2017, the Canadian digital share of revenues of 63 per cent exceeding the global average of 50 per cent, and Canada leaping past Australia to become the 6th largest music market in the world.

There are similar stories across virtually every cultural sector. Since the 2012 copyright reforms, music collective SOCAN’s Internet streaming revenues have grown more than tenfold. In fact, a report yesterday indicated that it grew again by a significant margin last year, nearly reaching $50 million annually. By comparison, in 2013, Internet streaming revenues were just over $3 million. Movie theatre and overall broadcast revenues have also continued to increase since 2012 and the video game sector represents one of Canada’s greatest cultural success stories.

The success extends to the publishing and education markets. Notwithstanding what you might hear, since the 2012 copyright reforms, there has been not been a decline in the publication of new Canadian titles. Educational spending on licensing works from publishers and authors has increased as the sector shifts from buying physical books and paying for collective licences to licensing e-books and access to massive content databases. Many universities (including my own) today licence over a million e-books, many with perpetual licences. This means that even as some publishers and authors express concern about educational copying practices, they earn new revenues from digitally licensing their works to educational institutions.

The implications of the Canadian success story

What are some of the implications of the Canadian success story?

First, on the domestic front, Canada is about to embark on a review of the copyright law that will serve as the foundation for future reforms. There is always room for improvement – we need better rules to support our ambitions on artificial intelligence and need to improve our notice-and-notice system for allegations of infringement to stop trolling activity – but we are starting from a strong position. In fact, Ministers Bains and Joly, in their letter to the Industry Committee, note that since market disruption often drives copyright reform, the law may not always be the best tool to address the current state of technology-driven change. The ministers acknowledge that many issues fall outside of the scope of the law, suggesting that efforts to use legal tools to impede changing marketplace dynamics may ultimately harm the very stakeholders the law is intended to assist.

Second, Canada should not shy away from engaging in cultural diplomacy to see its copyright rules adopted in other countries.  For example, I have just returned from Hong Kong, where I taught a short technology law course at Hong Kong University. Many in Hong Kong have been particularly interested in Canada’s non-commercial user generated content provision, noting that it could provide much needed safeguards for freedom of expression. Other countries have looked closely at our fair dealing approach and our Internet liability rules as potential models for their laws.

Third, these two issues converge when it comes to trade policy. Canada worked with the EU to craft a more balanced copyright framework that recognized both sides meet international standards and just led in the effort to bring the Trans Pacific Partnership to fruition without the United States, successfully arguing that several unbalanced copyright provisions that went beyond international standards should be suspended.  Indeed, the suspension of copyright term extension and digital lock rules helped create a more progressive agreement that may entice other countries to join.

Further, the recent Canadian approach helps establish a model for future trade agreements premised on meeting international standards of protection and progressive rights of access. The next step will be to bring our more innovative provisions into the trade realm, with obvious opportunities for Canada to position itself as a global copyright leader to the benefit of creators and users alike.

I look forward to your questions.

The post Canadian Copyright Diplomacy: My Appearance before the Senate Standing Committee on Foreign Affairs appeared first on Michael Geist.

No Panic: Canadian TV and Film Production Posts Biggest Year Ever Raising Doubts About the Need for Site Blocking and Netflix Regulation

Michael Geist Law RSS Feed - Tue, 2018/02/06 - 11:10

This year in digital and broadcast policy is likely to be dominated by two lobbying efforts: the radical website blocking plan proposed by the Bell coalition and the ongoing efforts from Canadian culture groups to impose new regulations on online video services such as Netflix. At the heart of both lobbying efforts are similar claims that seek to paint the Canadian cultural sector at risk of collapse without new regulations in the form of blocking or mandated contributions. Last week, the Canadian Media Production Association released Profile 2017, its annual report on the state of the industry. The latest report tells a remarkable success story. Far from the doom and gloom, the Canadian industry is achieving record growth, suggesting that website blocking and new Internet regulations are ill-advised solutions in search a problem.

The total value of the sector exceeded $8 billion, over than a billion more than has been recorded over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production. Canadian television, which some claim is at risk due to services such as Netflix, posted the largest expenditure ever (or least over the past two decades looking back at older annual reports).

 

CMPA, Profile 2017, p. 17 http://www.primetimeinottawa.ca/wp-content/uploads/2018/02/PROFILE2017.pdf

 

The data in the report undermines claims from the Bell website blocking coalition that piracy lies at the heart of declining television subscriber revenues. For example, the Bell coalition application attributes cord cutting to piracy, guessing that “if even one third of the lost or never obtained subscriptions are in part attributable to piracy, the lost revenues for BDUs would be between $220 million and $350 million annually.”

But the industry data explains where the money is actually going: online video services, which have seen increased revenues of more than $1 billion per year over the last four years. In fact, two Canadian online video services – CraveTV and Club illico – are estimated to have earned $373 million last year, up from just $13 million four years earlier. In other words, these are not “lost revenues”, but rather shifting revenues from traditional television packages to paid Internet streaming services.

 

CMPA, Profile 2017, p. 23 http://www.primetimeinottawa.ca/wp-content/uploads/2018/02/PROFILE2017.pdf

 

Further, movie theatre companies such as Cineplex have also joined the website blocking coalition, but their revenues have also increased in recent years. The Bell coalition claims that millions may be lost at the box office, but the data shows box office revenues increasing in Canada by 2.2% last year to a three-year high. The data also indicates that Canadian films consist of very a small part of overall revenues. English language films generated a total of $7.4 million for the entire year at the Canadian box office. With 113 English-language films playing in theatres, the average revenue for an English language film was just $65,000. Their issue is clearly not piracy, but rather a larger challenge of competing against U.S. and other foreign films for attention.

Both the Bell website blocking coalition and those arguing for Netflix regulation are united in the view that the Canadian television production sector is at risk, either due to piracy or the presence of foreign streaming services that do not face “Netflix taxes.” For example, the Bell coalition website blocking proposal highlights the economic impact of the production sector and argues “left unchecked, piracy will dramatically erode the contribution of these companies and their employees to Canada’s digital and creative economies.” Those comments were echoed in a Globe and Mail article today in which Bell executive Randy Lennox argued that production is at risk without site blocking. Proponents of Netflix taxes or regulation claim that the emergence of unregulated streaming services such as Netflix will mean less money to support to Canadian productions.

However, the experience to date is the completely the opposite with new streaming services investing in the sector and helping to propel it to greater heights. The increase in foreign investment in production in Canada is staggering. When Netflix began investing in original content in 2013, the total foreign investment (including foreign location and service production, Canadian theatrical, and Canadian television) was $2.2 billion. That number has doubled in the last five years, now standing at nearly $4.7 billion. While much of that stems from foreign location and service production that supports thousands of jobs, foreign investment in Canadian television production has also almost doubled in the last five years. The data makes it clear that Netflix isn’t a threat, it’s an opportunity with new money entering the sector.

 

CMPA, Profile 2017, p. 28 http://www.primetimeinottawa.ca/wp-content/uploads/2018/02/PROFILE2017.pdf

 

Indeed, Canadian content production hit an all-time high last year at $3.3 billion, rising by 16.1%. Notably, the increased expenditures do not come from broadcasters, whose relevance continues to diminish year-by-year. In fact, the private broadcasters (led by Bell) now contribute only 11% of the total financing for English-language television production. Their contribution is nearly half of what it was just three years ago (now standing at $236 million) in an industry that is growing. Yet despite the private broadcaster decline, money is pouring into the sector from distributors (who see benefits of global markets) and foreign financing (which has grown by almost $200 million in the past four years) leading the way. The sector remains heavily supported by the public, with federal and provincial tax credits now accounting for almost 30% of financing.

 

CMPA, Profile 2017, p. 55 http://www.primetimeinottawa.ca/wp-content/uploads/2018/02/PROFILE2017.pdf

 

The increasing irrelevance of private broadcasters for financing Canadian television production is particularly pronounced in the fiction genre (ie. drama and comedy shows). This is easily the most important genre from an economic perspective, with $1.29 billion spent last year. Private broadcasters only contributed $59 million or five percent of the total. By comparison, foreign financing was $285 million. Those numbers should be considered with Netflix critics claim that an additional $100 million per year means very little.

 

CMPA, Profile 2017, p. 57 http://www.primetimeinottawa.ca/wp-content/uploads/2018/02/PROFILE2017.pdf

 

The Canadian industry data should be cause for celebration within the industry. The success story confirms that Canadian television and film production is far less dependent on regulation than is often portrayed with a sector that can compete on the global stage. Moreover, the data also undermines far-fetched claims from the Bell coalition that the industry is in crisis and that drastic measures such as website blocking are needed to save it. Billions of dollars are entering the marketplace with Canadian production at an all-time high, meaning politicians and regulators should avoid hitting the panic button and resist harmful policy proposals that are inconsistent with actual industry data.

The post No Panic: Canadian TV and Film Production Posts Biggest Year Ever Raising Doubts About the Need for Site Blocking and Netflix Regulation appeared first on Michael Geist.

Thousands Slam Bell Coalition’s Website Blocking Proposal in Submissions to the CRTC

Michael Geist Law RSS Feed - Mon, 2018/02/05 - 12:27

If the Bell coalition’s website blocking proposal was designed to garner attention, it achieved its goal as the proposal attracted thousands of individual submissions to the CRTC within days of it being posted online. The massive response is overwhelmingly negative, however, with thousands of Canadians registering their objections to the proposal. I wrote about the site blocking plan in a Globe and Mail op-ed and discussed it in an interview with CBC’s As It Happens. I will have many more posts on why the radical proposal should be rejected in the days ahead.

As of this morning, there are over 4,200 interventions on the CRTC site. To put these numbers in perspective, there were more objections to website blocking in less than a week than interventions to the CRTC’s much-promoted Let’s Talk TV consultation over several months. What makes the public response particularly noteworthy is that the submissions are not the result of an organized campaign. OpenMedia is inviting Canadians to comment through its website, but these are not its submissions (which will presumably come later in a group response). In fact, in skimming through the responses (JF Mezei helpfully pulled the first 3,800 together), it is striking how while the sentiment remains the same for the vast majority of submissions (do not approve website blocking), the individual responses are largely unique. Indeed, some submissions identify many technical, legal, and policy concerns with the proposal (for example, here, here, here, here, here).

This can be contrasted with the only organized write-in campaign that I have seen thus far, which is maintained by ACTRA. ACTRA is encouraging its members to write-in support of the plan (there are a few among the current submissions), providing full instructions in how to complete the CRTC form, including text than can be copied and pasted into the submission form. ACTRA goes so far as to tell its members to say they do not wish to appear before the commission. Interestingly, there are submissions from ACTRA members directly opposing the proposal and expressing disappointment with their organization’s position (here, here).

The current deadline for submission is March 1st, though there is an application to extend the deadline. In the meantime, Canadians concerned with the website blocking proposal can ensure that their voices are heard at the CRTC site. They can also take the time to forward their comments to their Member of Parliament and the Minister of Innovation, Science and Economic Development Navdeep Bains.

The post Thousands Slam Bell Coalition’s Website Blocking Proposal in Submissions to the CRTC appeared first on Michael Geist.

Canada’s SOPA Moment: Why the CRTC Should Reject the Bell Coalition’s Dangerous Internet Blocking Plan

Michael Geist Law RSS Feed - Fri, 2018/02/02 - 11:30

Six years ago, then Public Safety Minister Vic Toews was challenged over his plans to introduce online surveillance legislation that experts feared would have significant harmful effects on privacy and the Internet. Mr. Toews infamously responded that critics “could either stand with us or with the child pornographers.” The bill and Mr. Toews’ comments sparked an immediate backlash, prompting the government to shelve the legislation less than two weeks after it was first introduced.

This week, telecom giant Bell led a coalition of companies and associations called FairPlay Canada in seeking support for a wide-ranging website blocking plan that could have similarly harmful effects on the Internet, representing a set-back for privacy, freedom of expression, and net neutrality. My Globe and Mail op-ed notes the coalition’s position echoes Mr. Toews, amounting to a challenge to the government and the Canadian Radio-television and Telecommunications Commission (the regulator that will consider the plan) that they can either stand with them or with the pirates.

While that need not be the choice – Canada’s Copyright Act already features some of the world’s toughest anti-piracy laws – the government and the CRTC should not hesitate to firmly reject the website blocking plan as a disproportionate, unconstitutional proposal sorely lacking in due process that is inconsistent with the current communications law framework.

The coalition, which also includes Rogers, Quebecor, and the CBC, has tried to paint the Canadian market as one rife with piracy, yet the data does not support its claims. For example, Music Canada recently reported that Canada is well below global averages in downloading music from unauthorized sites (33 per cent in Canada vs. 40 per cent globally) or stream ripping from sites such as YouTube (27 per cent in Canada vs. 35 per cent globally. Further, a 2017 report from the Canada Media Fund channeled the success of Netflix in noting that “some industry watchers have gone so far as to suggest that piracy has been ‘made pointless’ given the possibility of unlimited viewing in exchange for a single monthly price.”

Even if there was an urgent issue to address, the coalition’s proposal raises serious legal concerns. It envisions the creation of a new, not-for-profit organization that would be responsible for identifying sites to block. The block list would be submitted to the CRTC for approval, which would then order all Internet providers to use blocking technologies to stop access to the sites. The courts would remarkably be left out of the process with the potential for judicial review by the Federal Court of Appeal only coming after the block list was established and approved by the regulator.

The limitations of blocking technologies, which can often lead to over-blocking of lawful content, raises immediate red flags about whether site blocking would be consistent with the Charter of Rights and Freedoms. For example, when Telus restricted access to a pro-union website in 2005, it simultaneously blocked access to an additional 766 websites hosted by the same computer server. Given the implications for freedom of expression, an immediate legal challenge would be a certainty.

The absence of full judicial oversight and the likely Charter challenge are fatal flaws in the proposal, but they are by no means the only ones. The CRTC stated in 2016 in a case involving Quebec’s plan to block unlicensed online gambling sites that the law only permits blocking in “exceptional circumstances”, which places the onus on the coalition to demonstrate that the plan would further Canada’s telecommunications policy objectives. It does a poor job in this regard, relying on easily countered bromides that piracy “threatens the social and economic fabric of Canada”, that the telecommunications system should “encourage compliance with Canadian laws” and that website blocking “will significantly contribute toward the protection of the privacy of Canadian Internet users.”

The CRTC should be particularly wary of establishing a mandated blocking system given the likelihood that it will quickly expand beyond sites that “blatantly, overwhelmingly or structurally” engage in infringing or enabling or facilitating the infringing of copyright. For example, Bell, Rogers, and Quebecor last year targeted TVAddons, a site that contains considerable non-infringing content, that would presumably represent the type of site destined for the block list.

In fact, legitimate online video services could become another target. In 2015, Bell Media executives claimed that Canadians who used virtual private networks to access U.S. Netflix were stealing. The prospect of targeting VPN use, which has many legitimate uses, has long raised concerns for the privacy community, but the website blocking plan could emerge as an alternative with demands to block unlicensed foreign online video services. The U.S. was so concerned about the possibility of Canadian blocking that it demanded a provision prohibiting the practice be included in the Trans Pacific Partnership.

Much of the proposal ultimately rests on claims that website blocking has been implemented in other countries with positive market effects. Yet countries with site blocking such as the U.K., the Netherlands, Norway, Singapore, and Australia include more robust judicial review missing from this proposal. Moreover, the Canadian market is already outperforming many site blocking countries. For example, more Canadians per capita subscribe to Netflix than consumers in site blocking countries such as Italy or the U.K. and Canada recently surpassed Australia as the sixth largest music market in the world.

The U.S., which typically is viewed as the world’s most aggressive copyright enforcer, is notably missing from the list of site blocking countries. It considered the measure several years ago in controversial legislation known as the Stop Online Piracy Act (SOPA), which generated massive online protests and was killed before the voting stage. The U.S. Congress has been wary of introducing similar legislation ever since, a useful lesson for the CRTC and the federal government, who would be well advised to swiftly dismiss the ill-advised and dangerous Canadian site blocking proposal.

The post Canada’s SOPA Moment: Why the CRTC Should Reject the Bell Coalition’s Dangerous Internet Blocking Plan appeared first on Michael Geist.

Why the Canadian Privacy Commissioner’s Proposed Right to be Forgotten Creates More Problems Than it Solves

Michael Geist Law RSS Feed - Mon, 2018/01/29 - 10:10

The right to be forgotten, which opens the door to public requests for the removal of search results that are “inadequate, irrelevant or no longer relevant”, has been among the world’s most controversial privacy issues since it was first established in Europe in 2014. My Globe and Mail op-ed notes that the new right responds to concerns with potential reputational harms from inaccurate or misleading information online, but faces the challenge of balancing privacy protections with the benefits of the Internet for access to information and freedom of expression.

The Privacy Commissioner of Canada waded into the debate on Friday with a new draft report concluding that Canadian privacy law can be interpreted to include a right to de-index search results with respect to a person’s name that are inaccurate, incomplete, or outdated. The report, which arises from a 2016 consultation on online reputation, sets the stage for potential de-indexing requests in Canada and complaints to the Privacy Commissioner should search engines refuse to comply.

The Commissioner envisions a system that would allow Canadians to file de-indexing requests with leading search engines, who would be required to evaluate the merits of the claim and, where appropriate, remove the link from the search index or lower its rank to obscure the search result. Moreover, the commissioner would require search engines to actively block Canadians from accessing the offending links by using geo-identifying technologies to limit access in Canada to the results.

There is a need to address the risks associated with online reputation, but the Privacy Commissioner’s proposal raises a plethora of concerns. First, the claim that existing law includes a right to de-index search results stands on shaky ground. In addition to the broader questions regarding its consistency with freedom of expression protections under the Charter of Rights and Freedoms, there is reason to doubt whether PIPEDA, the private sector privacy law, applies to search results.

Federal privacy law is limited to commercial activity, yet search results are typically provided at no cost to the user nor the sites being indexed. Indeed, all the activity behind search – indexing content, developing algorithms to identify relevant results, and the display of those results – fall outside a conventional commercial transaction. There may be paid results or other advertising displayed with some search results, but those are arguably secondary to the indexing, ranking, and display of the relevant links.

Second, the report’s conclusions stand at odds with the majority of responses generated by the Privacy Commissioner’s consultation. The feedback from leading Internet services, media companies, academics, and civil society groups cautioned against creating a right to be forgotten in Canada. Without a foundation for its approach arising from the consultation, participants can be forgiven for wondering whether the report’s recommendations were a foregone conclusion.

Even if the report can be justified as consistent with existing privacy law, the proposed approach features a remarkable level of micro-managing of search engine activity. The de-indexing right is limited solely to search results for a specific name, meaning that alternate searches will not be affected. For example, an embarrassing court decision might be blocked for a person’s name, but parallel searches for facts arising from the case would not.

The report also suggests that rather than de-indexing a link, search engines might instead be asked to lower the rank of a search result or flag the result as inaccurate or incomplete. This would vest editorial power in search engines they have generally been reluctant to assume. While algorithmic decision making is far from neutral and deserves greater scrutiny, using privacy law to justify intentionally obscuring results by lowering ranks transforms information intermediaries into knowledgeable publishers.

Once the revised search results are developed, the report has further recommendations on who can access them, calling on search engines to use geo-identifying technologies to block access in Canada to offending links. Mandated use of blocking technologies as well as a parallel recommendation for a notice-and-takedown system for content that is not found under current Canadian law represents a dramatic departure from the existing Internet rules of the road. These forms of regulation cannot simply be read into PIPEDA by the Privacy Commissioner, but rather should require careful review and legislative reforms by Parliament.

Perhaps most troubling is that the report empowers search engines to play the role of judge and jury over the relevance and harm associated with links to content. Companies such as Google have attracted increasing concern over their ubiquitous role in how we access information. If implemented, the Privacy Commissioner’s report would troublingly expand that role by granting Internet giants the power to determine upon request whether a search result is incomplete or outdated as well as whether it should be de-indexed, lowered in ranking, or flagged as incomplete. In the search for a solution to online reputational harm, the proposal creates more problems than it solves.

The post Why the Canadian Privacy Commissioner’s Proposed Right to be Forgotten Creates More Problems Than it Solves appeared first on Michael Geist.

Don’t Make the TPP Mistake Again: Why Canada Needs to Maintain a Progressive Approach on IP in NAFTA

Michael Geist Law RSS Feed - Fri, 2018/01/26 - 10:18

The intellectual property chapter has not been a focal point of the NAFTA negotiations this week in Montreal, but the successful conclusion of the TPP11 (or CPTPP) serves as a reminder that it is likely to emerge as a contentious issue in the months ahead. The U.S. position on the NAFTA IP chapter is clear: it wants to replicate the original TPP IP chapter. Yet Canada now stands opposed to that chapter having backed the suspension of many of its provisions including copyright term extension, digital locks, notice-and-takedown, patent protections, biologics protections, and pharmaceutical plan rules. In fact, Prime Minister Justin Trudeau this week cited changes to the IP provisions as one example of how the government worked to make the TPP more progressive.

The Canadian government maintains that it is seeking a similarly progressive approach in a revised NAFTA. Many of the TPP participants have now effectively acknowledged that the TPP IP chapter was imbalanced and not in their national interest. For example, the Government of New Zealand has posted a list of the suspended TPP provisions and what they mean for that country. The change is dramatic as the NZ government admits the TPP IP provisions would have cost hundreds of millions of dollars, required significant legislative reforms, and restricted future policy flexibility.

Canada faced many of the same costs and restrictions under the TPP IP chapter. The full list of suspended IP provisions, with links to my original posts assessing the Canadian impact, include:

The U.S. will seek to bring these provisions back in NAFTA. With the Canadian government having taken note of the public opposition to these rules and the Prime Minister emphasizing the importance of a progressive trade approach that includes a more balanced approach to IP, Canada should not make the same mistake again. It should remain steadfast in supporting the revised TPP IP chapter as the preferred approach, which better reflects international standards and Canadian priorities.

The post Don’t Make the TPP Mistake Again: Why Canada Needs to Maintain a Progressive Approach on IP in NAFTA appeared first on Michael Geist.

NAFTA Offers Chance for Much-Needed Internet Safe Harbour Rules in Canada

Michael Geist Law RSS Feed - Thu, 2018/01/25 - 11:24

The NAFTA negotiations resume in Montreal this week with Internet liability emerging as an increasingly contentious issue. I was pleased to be part of a group of 55 Internet law experts and organizations that recently urged negotiators to include Internet safe harbour rules that promote freedom of expression in the agreement. The provision, which is already found in U.S. law, would lower barriers to startup online companies, advance free speech, and protect sites publishing consumer reviews.

I wrote about the benefits of Internet speech safeguards last year, concluding:

As Canada seeks to attract global players such as Amazon and foster the creation of the next generation of home-grown Internet success stories like Shopify, there is a need for a level legal liability playing field. Indeed, the absence of Canadian safe harbour rules is longstanding weakness in the efforts of Innovation, Science and Economic Development Minister Navdeep Bains to build an innovative online economy. The NAFTA digital trade chapter offers an ideal venue to simultaneously give the U.S. delegation a “win” and for Canada to pursue much-needed domestic digital reforms.

The provision represents an opportunity to satisfy U.S. demands while benefiting Canadian Internet companies and users, who have long been disadvantaged by the absence of equivalent safe harbour protections.

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When Consultations Count: Why the TPP is a Reminder of the Value of Speaking Out

Michael Geist Law RSS Feed - Wed, 2018/01/24 - 10:34

In June 2016, I appeared at one of the government’s public town hall meetings on the TPP.  Alongside then-International Trade Minister Chrystia Freeland (now Global Affairs minister), C.D. Howe’s Daniel Schwanen, and Unifor’s Jerry Dias, I had the chance to raise concerns with the TPP’s IP and e-commerce provisions and then hear from dozens of people who raised a wide range of issues. The town hall was part of a broad public consultation that was frequently derided by critics as a stalling tactic, yet the impact of the consultation was felt with yesterday’s announcement of a deal on a slightly re-worked TPP that includes suspension of many of the most controversial IP provisions.

The consultation ran for months, but data released under the Access to Information Act from the period from November 2015 to June 2016 indicate that the government received over 18,000 emails during that period alone, the majority of which were sent through OpenMedia and emphasized concerns with intellectual property, e-commerce, and ISDS. Of the remaining emails, the top two concerns were ISDS and intellectual property.

It does not appear that the inclusion of IP and ISDS rules on the list of suspended TPP provisions is coincidental. Prime Minister Justin Trudeau cited changes to the IP provisions in his Davos speech as one example of how the government worked to make the agreement more progressive, a positive signal for future copyright reforms given the implicit acknowledgement of the problems with copyright term extension and digital locks. Moreover, International Trade Minister François-Philippe Champagne specifically referenced the public feedback yesterday within the context of the IP changes to the TPP, noting the “suspension of many intellectual property provisions of concern to Canadian stakeholders.” The “stakeholders” is the broader public that responded to the consultation and the statement should be viewed as an admission that the results of those efforts had an impact on government policy.

The combination of suspended provisions and the side letter addressing concerns over a less-than-complete cultural exemption demonstrate the importance of reading the fine print in trade deals and largely ignoring government talking points designed to drum up public support. The Conservative government materials on the TPP dismissed many of the concerns raised by the public. After the text was released, I wrote a 50 part blog series on the trouble with the TPP with more than a dozen posts directly focusing on provisions that are now suspended or the subject to amendment via side letters.

The Liberal government inherited a flawed agreement and even with the changes, the TPP (or CPTPP) remains a flawed deal. Indeed, in my area, there are serious problems with e-commerce chapter and its weak privacy protections and potential barriers to data localization and data transfer rules. Others have pointed to concerns with the labour provisions and the rules pertaining to the auto sector. However, it is a better deal than the one the government was stuck with on election day.

Further, there is no reason to be naive. The government likely wanted to put its own stamp on the deal and the IP provisions found a receptive audience among many other TPP countries. The cultural changes will play well politically in parts of the country. Despite insistence that the TPP and NAFTA are separate deals, the government may have also wanted to strengthen (not weaken as some have speculated) its negotiating position on NAFTA by suspending IP provisions that could yet re-appear in that agreement. It should also be noted that the government is also far from perfect on consultation given the insider access to NAFTA information it has granted to select business groups. In other words, the trade file and the TPP have considerable room for improvement.

With all that said, give credit where credit is due. The government said it wanted to hear from Canadians on the TPP and it established multiple venues for feedback. Thousands took the opportunity to speak out and some of what they said became reflected in the government’s negotiating position and the final agreement. That makes for a better deal and provides a valuable reminder that sometimes consultations count.

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Canada Successfully Stands Up For Balanced IP and Canadian Culture in TPP Deal

Michael Geist Law RSS Feed - Tue, 2018/01/23 - 10:21

While the NAFTA negotiations in Montreal were expected to be the lead trade story this week, the Trans Pacific Partnership talks in Tokyo have stolen the show with the remaining 11 countries reaching agreement on a deal that is likely to be signed in March. Canada faced intense criticism last year from some TPP partners (particularly Japan and Australia) over its demands to address concerns with the agreement. That sparked some Canadian business groups to quickly call on the government to simply cave in order to conclude a deal. Global Affairs Minister Chrystia Freeland and International Trade Minister François-Philippe Champagne rightly argued that capitulation is not a negotiating strategy and they now come away with an improved (albeit still flawed) agreement.

As I noted last year, from a strategic perspective, Canada was a late entrant to the TPP negotiations, arriving well after the basic framework had been established and several of the chapters concluded. In fact, the TPP only became a trade priority after the Harper government identified the risks of remaining on the outside of a deal that included the U.S. The decision to participate was primarily defensive with some studies projecting only marginal economic gains. With the U.S. now out of the TPP, Canada’s primary strategic objective was gone. That left a deal that offered some benefits for increased trade with Japan, but little else given that Canada already has free trade agreements with several other TPP countries such as Mexico, Chile, and Peru.

Japan emerged in recent months as the TPP’s biggest proponent and worked hard to bring the remaining countries on board. Canada took the lead on seeking amendments the TPP’s deeply problematic intellectual property chapter, where the original agreement included patent provisions that would likely increase the cost of pharmaceuticals and copyright rules that would lock down content for decades through the extension of the term of copyright beyond the standard established at international law. Indeed, the IP chapter largely reflected U.S. demands and with its exit from the TPP, an overhaul that more closely aligns the agreement to international standards was needed. Canada succeeded on that front with an agreement to suspend most of the controversial IP provisions including those involving copyright term, patent extension, biologics protection, and digital lock rules.

Despite claims from TPP supporters that the cultural exemption did not raise concerns, the Canadian government rightly concluded that the TPP provision fell far short of the standard found in other trade agreements. The culture carve outs arose from U.S. demands. With it out of the agreement, the real question was never whether the provisions could be addressed, but rather how to do so. The fix will apparently come through side letters between Canada and the remaining TPP countries, which will keep the text intact but give Canada the exemption it wanted.

The end result is an agreement that still raises concerns – the e-commerce chapter does a poor job of protecting privacy and balancing data localization requirements – but one that is improved from earlier iterations. Taking any deal over a good deal never made any sense and today’s result affirms that caving to foreign pressures is not a viable strategy as Canadian negotiators should not shy away from asserting strong demands in the national interest.

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Insider Access: Secret Advisory Groups Damage the Credibility of Canada’s NAFTA Negotiations

Michael Geist Law RSS Feed - Fri, 2018/01/12 - 09:40

The Canadian government has frequently touted its commitment to transparency and consultation with respect to its trade negotiations, citing a steady stream of open events and its receptiveness to public feedback. Indeed, since the renegotiation of NAFTA was placed back on the table, officials say they have talked to nearly 1,000 stakeholders and received more than 44,000 public submissions.

While the openness to public comment represents a notable shift in approach, my Globe and Mail op-ed reports that the government has been far less forthcoming about the creation of secret NAFTA industry advisory groups. According to documents obtained under the Access to Information Act, as of last October, members of those groups had signed 116 confidentiality and non-disclosure agreements that pave the way for access to secret information about the status of the negotiations. Those stakeholders are in addition to the dozen NAFTA Advisory Council members, most of whom have also signed the non-disclosure documents.

The industry advisory groups cover some of the negotiations’ most contentious areas, including agriculture, intellectual property, services, auto, culture, and energy. There are also groups for newer trade issues such as women’s rights, labour, and Indigenous concerns. In all, the government supports at least 12 previously undisclosed advisory groups.

The size of each advisory group varies. The government documents indicate there are at least 14 members in the services group, 12 members in the auto group, and seven in the intellectual property group. The composition of the advisory groups remains a secret, though officials acknowledge that they consist primarily of businesses and their industry associations with few independent voices and no academic experts.

Officials maintain the NDAs are needed to allow for disclosure of the state of the talks and the negotiating positions of the U.S. and Mexico delegations. While revealing Canadian positions would not be subject to confidentiality restrictions, an agreement between the three countries allows for private disclosure of the dynamics of the negotiations and specific country positions. The advisory groups are not provided with copies of the draft text, but are given sufficiently detailed information to assess the likely impact of the proposed provisions.

The willingness to disclose NAFTA negotiating details should not come as a surprise as the government undoubtedly wants to limit the possibility of unanticipated harms from the final text. Yet the entire process remains shrouded in secrecy (an official responded that the groups were not secret but no one had previously asked about them), a far cry from the promises of transparency promoted by the government. Moreover, while the number of NDA agreements and the existence of the advisory groups was revealed as part of the Access to Information request, any identifying information about which groups or individuals signed the agreements was fully redacted.

The secret two-tier approach damages the credibility of an otherwise open consultation. Encouraging Canadians to provide their views on Canada’s trade priorities makes sense given that trade has emerged as perhaps the single biggest economic issue facing the country and all Canadians have a stake in the outcome of the talks. However, the use of secret advisory groups creates an uneven playing field with some stakeholders positioned to provide better informed feedback than their competitors as well as many other interested parties and independent experts.

If the insider access approach is to continue, Global Affairs Minister Chrystia Freeland and International Trade Minister François-Philippe Champagne should move quickly to lift the veil of secrecy behind the process, openly disclosing the nature and membership of each advisory group. Moreover, the advisory groups should be expanded to include a wider diversity of voices, including badly needed independent perspectives.

The government has emphasized its willingness to engage with the U.S. on NAFTA, even if President Donald Trump chooses to start the process of walking away from the deal. Its engagement with Canadians should be similarly robust, marked by a transparent, public advisory process, a clear commitment to balanced advice, and strict limits on the creation of privileged insider access.

The post Insider Access: Secret Advisory Groups Damage the Credibility of Canada’s NAFTA Negotiations appeared first on Michael Geist.

adjudication by algorithm

Fair Duty by Meera Nair - Wed, 2018/01/03 - 11:33

Monday’s issue of The Globe and Mail describes new initiatives to secure better returns for the music industry when musical content is used via radio or internet. Under a joint initiative between the University of Toronto and The Society of Composers, Authors and Music Publishers of Canada (SOCAN), students are investigating how technology “… can parse through audio and video to find media using SOCAN member songs that should be paying royalties to creators and publishers.”

If a reader parses that sentence, the word “should” stands out. Merely using a SOCAN member’s song, or anyone’s song, does not automatically indicate that payment is required. While it is plausible that artificial intelligence can develop a capacity to engage in the contextual analysis required to determine whether a use is legitimate or an infringement, much will depend on the human input.

(As I write this, I recall undergraduate days and a computer science professor who was fond of saying, “garbage in, garbage out.”)

Music collectives invest in AI to better scan online content, finding songs to license them “whether they’re in the background of a cat video or an amateur singer covering Drake.” Surprisingly, no mention of fair dealing or lawful user-generated content. https://t.co/JsTsg2azJ0

— Carys Craig (@CraigCarys) January 2, 2018

In her remarks about the article Carys Craig draws on the work of Niva Elkin-Koren, who has written at length about the perils of copyright adjudication by algorithm. For instance, in Fair Use by Design (2017), Elkin-Koren argues that: “… for fair use to serve its role in the twenty-first century, the checks that it intends to create on the rights of authors must also be embedded in the design of online systems.” She reveals some disturbing findings following analysis of 10,000 removal requests sent to Google, to the conclusion that “an algorithmic regime, which is neither overseen by the public nor by any judicial entity, is extremely vulnerable to misuse.”

Misuse may be deliberate, but misuse also occurs through confusion with respect to the very nature of copyright. Too many people believe that copyright means an absolute right of control; which it never has been, nor has it ever functioned in this manner. From its implementation into statutory law (1710), copyright has been structured as a set of limited rights. But despite this 300+ year ancestry, contemporary articles rarely provide any explanation of where control begins or where control ends.

That story is told through the Copyright ActSection 3.1 states:

For the purposes of this Act, copyright, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public …

From 3.1 we see that copyright exists only when a substantial amount of work is being reproduced. Any algorithm that deems infringement by only identifying use, has vastly overstepped its bounds. Copyright may not even have arisen, let alone finding infringement. (For more about substantial/insubstantial, see here and here.)

If a substantial reproduction has occurred, copyright owners (which may include the writers, musicians, artists, etc. that created the work) are entitled to control the use of the work, through the measures enumerated in the Copyright Act. But that control is not absolute. It is limited, not only by time (Canada maintains the life+50 copyright duration mandated by international treaty) but also by many statutory exceptions. That list begins with fair dealing:

Section 29, fair dealing “Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright.”

Sections 29.1 and 29.2 – which provide fair dealing for “criticism or review” and “news reporting” under conditions of attribution. Writers and publishers (perhaps those associated to national newspapers) might appreciate this exception.

(Over the last fifteen years Canada’s treatment of fair dealing has evolved into a measured, progressive exception and ensures that the system of copyright remains balanced and does not devolve purely into a means of rent-seeking. For instance, see here, here, and here.)

Canada’s jewel in the crown – S29.21 “Non-commercial user-generated content,” is more colloquially known as The MashUp Exception. With conditions (amateur creation, attribution, legitimate source material, and a consideration of market effect), creativity at its most nascent is protected as lawful activity. While the scope is vast, at the very least S29.21 seems tailor-made to protect video involving a dancing cat. (For more on 29.21, see here and here.)

Or if the musical accompaniment to the cat was unintended, the unsung heroic exception of S30.7 “Incidental Use” comes to mind:

It is not an infringement of copyright to incidentally and not deliberately (a) include a work or other subject-matter in another work or other subject-matter; or (b) do any act in relation to a work or other subject-matter that is incidentally and not deliberately included in another work or other subject-matter.

Incidental use is not limited to amateur creation, nor is it confined to any specific purpose of use. That said, it has provided Canadians with some bragging rights in a particular genre; as Howard Knopf wrote over a decade ago, “This section is the envy of American documentarians … .”

The entire list of exceptions is extensive and should be part of any algorithmic effort to pronounce judgement on use of copyrighted works. In this regard, artificial intelligence could lead to better outcomes for copyright owners and users alike, if such systems are appropriately seeded, capable of learning from existing and ongoing court decisions, and attuned to the nuance that permeates application of the law. To rephrase my former professor’s words: comprehensive information in, contextual decisions out.

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