Digital Copyright Canada

The release of Budget 2019 yesterday again placed the government’s innovation strategy in the spotlight as the government emphasized its significant spending record, including $950 million for the superclusters, $4 billion for science research, $795 million in 31 strategic innovation fund agreements and $2.3 billion for clean technology support. The investments were highlighted in a recently released an innovation scorecard, Building a Nation of Innovators, which takes stock of the government’s efforts over the past three years. My new CIGI policy brief argues that while the benefits from this spending will take years to realize, increased investments in strategic sectors are the easy part of innovation policy.

Enacting new rules and regulations that support an innovative economy is more challenging. On that front, the government’s record is more modest. The limited intellectual property reforms made to date are aimed at resolving the frustrating administrative processes at the Copyright Board of Canada and are designed to guard against IP misuse. Many other critical innovation policy issues — data governance, copyright reform, privacy modernization, telecommunications regulation — remain works-in-progress, with major legislative changes still years away from enactment.

I argue that there is a link between innovation policy and copyright reform; four reforms, in particular, are both long-overdue and closely-linked to the government’s supercluster approach. These include a text-and-data mining exception – sometimes referred to as an information analysis exception – to support artificial intelligence (AI), flexible fair dealing in support of digital technologies and advanced manufacturing, open government data and the elimination of crown copyright in connection with the ocean supercluster, and the easing of digital lock restrictions that place Canadian agriculture and the protein innovation supercluster at a competitive disadvantage. The full brief can be found here.

The post How Canadian Copyright Reform Could Support the Government’s Supercluster Investment appeared first on Michael Geist.

Earlier this month, Innovation, Science and Economic Development Minister Navdeep Bains took his most significant policy step to date to put his stamp on the Canadian telecom sector by issuing a proposed policy direction to the CRTC based on competition, affordability, consumer interests, and innovation. To help sort through the policy direction, the state of the Canadian telecom market, the role of independent companies that rely on regulated wholesale access, and lingering frustration with the CRTC, this week’s LawBytes podcast features a conversation with Andy Kaplan-Myrth, Vice President of Regulatory and Carrier Affairs with TekSavvy, Canada’s largest independent telecom company. 

The podcast can be downloaded here and is embedded below. Subscribe to the podcast via Apple Podcast, Google Play, Spotify or the RSS feed. Updates on the podcast on Twitter at @Lawbytespod.

Episode Notes:

Enough is Enough: Bains Proposes CRTC Policy Direction Grounded in Competition, Affordability, and Consumer Interests

Credits:

Government Orders CRTC To Reverse Bandwidth Decision, The Hill Watcher, 3 February 2011

New wireless spectrum auction announced, Global News, 12 January 2014

Why is Canada-based Ting is not available for cell phone users in Canada?, Open Media, 1 August 2013

Verizon opts out of Canada, Canoe, 20 March 2018

House of Commons Hansard, 26 February 2019

House of Commons Hansard, 7 December 2018

The post The LawBytes Podcast, Episode 3: The CRTC Is “Doing the Least They Can Get Away With” appeared first on Michael Geist.

Last month Howard Knopf reminded us that the Copyright Board is nearing completion of its work on the issue of collective licensing in post-secondary educational institutions. Under discussion are Access Copyright’s requests for tariffs on some unauthorized copying of copyright-protected materials. The Board has in fact invited parties to “comment on the feasibility and clarity of the terms of the tariff.”

While the documents pertaining to the proposed tariffs indicate that students are to be considered as “authorized users,” the aim of collective licensing is largely to address instances where teachers choose to distribute portions of copyright-protected works, often described as excerpts, to students.

Ideally, any tariff for a collective license would hew as close as possible to the principle of individual and fair negotiation between two parties for compensable use of content, and be based on a clear understanding, not only of the market, but also of Canadian copyright law. To that end, let us hope that the Copyright Board will engage in a thorough investigation of three hitherto-unchallenged assumptions, namely that:

1. Unauthorized copying of copyright-protected materials occurs uniformly across institutions.
2. Such unauthorized copying must always be paid for.
3. Appropriate payment has not already been made.

1. The Scale of Unauthorized Copying

In the political arena, Access Copyright’s portrayal of unauthorized copying, as copying running amok at campuses, was met with neither question nor criticism. Ideally, the Board would engage in some investigation of this claim. At the very least, the Board should recognize that when a textbook is assigned to students as their principle source of reference, the question of excerpts (or course-packs) becomes moot.

For instance, a cohort of approximately 200 students pursuing the degree of Bachelor of Applied Sciences in Engineering at a reputable Canadian university are routinely assigned textbooks as their sole resource for learning. (Full disclosure: one of the cohort is my daughter. In her case, depending on what she might spend, she bought new books, used books, or on occasion nothing at all, relying instead on the copy held in the Reserves section of her institution’s library.)

An ideal tariff would ensure that institutions may opt-out on behalf of those students for whom their principal learning resource is not an assemblage of excerpts. While this strongly suggests that many students in the STEM fields will be removed from the FTE count, other disciplines may fall within the same framework. For instance, Nick Mount, a professor in the Department of English at University of Toronto writes: “In all my classes, undergraduate and graduate, I assign and expect students to purchase books, including many books by living Canadian writers. I stopped using course-packs years ago: they’re aesthetically ugly, and their digital replacements don’t work well in classrooms. To the best of my knowledge my colleagues follow much the same practice.”

The calculation of the tariff must reflect only those students who actually consume works by excerpt, but only when such excerpts are entitled to payment.

2. Some types of unauthorized copying 

i. OER.

The use of open-educational resources (OER) is becoming more common in Canada. These works, often funded by taxpayers, and developed by credible authorities in various disciplines, are released under open licenses whereby users (be they teacher or student) may adapt, copy, or post content without additional fees. While adoption of such resources is not uniform across the country, the trend is sloping upward.[1] The Board should take particular note of the efforts at Kwantlen Polytechnic University (KPU), the first institution in Canada where entire programs have been designed on the basis of open resources and are now showing escalating enrollment.

An ideal tariff would ensure that institutions may opt-out on behalf of, and thus remove from FTE count, those students participating in programs for which the institution has actively sought to ensure a zero cost for materials, by developing and/or adopting OER content.

ii. Exceptions.

Within the Copyright Act are various measures[2] that permit unauthorized copying of copyright-protected materials; chief among these is Section 29 Fair Dealing. As use of Fair Dealing has been contentious, the Copyright Board might wish to limit its consideration of fair dealing to only that which has been supported by the Supreme Court of Canada. To that end, the famed CCH case of 2004 is instructive—the final decision was one of unanimity and the measures of content reproduced and accepted as fair dealing ranged from a few pages to 21% of an entire textbook.[3]

Naturally, quantity alone is never solely determinative of fair dealing; however, this must raise at least some question as to why Access Copyright is asking that educational institutions pay a fee for distributing content which may well be fair dealing. Particularly as prior to the amendments of 2012, the Supreme Court sanctioned classroom distribution of short excerpts which were supplemental to principal learning resources, under the auspices of the category of “private study,” within fair dealing.[4]

An ideal tariff would ensure that institutions may remove from FTE count, those students enrolled in courses where supplemental excerpts would sit within the threshold of fair dealing as appropriate under the authority of CCH (2004). As the Copyright Board itself noted in 2009, “CCH now is the unavoidable starting point of any analysis of the notion of fair dealing (para. 75).”

And while the Board’s discomfort was evident then, their careful adherence to the law paved the way to the Board’s more nuanced understanding of fair dealing as was exemplified in 2015:

In CCH, the Supreme Court of Canada stated that fair dealing can be made out either by demonstrating that there exists a general practice that is based upon an enumerated fair-dealing purpose, and, is in fact, fair, or by demonstrating that a particular copying event … was fair dealing (para. 223, citing para. 63 of CCH Canadian).

3. Fair remuneration for copying

Perhaps Access Copyright is behaving in good faith, and is simply unaware of changing patterns of development and distribution of educational resources. However, members of Canada’s publishing sector cannot pretend to be without guile, as it has come to light that they have chosen to license their wares for use in educational institutions, yet insisted to Canadian MPs that the educational community was not paying its fair share. In a comprehensive post, dated to 23 November 2018, Michael Geist laid bare the claims of some Canadian presses – that they were suffering for the lack of payment from educational institutions – when in fact:

… educational institutions typically purchase both access to the work and a licence for multiple uses and/or inclusion in a CMS. This means that the e-book licence replaces the Access Copyright licence, compensating publishers and authors while providing students and teachers with greater flexibility and value. Moreover, many of the licences are perpetual, meaning that rights holders are paid a higher upfront fee in return for no subsequent royalties or payments.

An ideal tariff issued by the Copyright Board would ensure that institutions do not pay a second time for content already paid for through voluntary market-agreements between parties.

From the profusion of briefs submitted to the Federal Government during last year’s Copyright Review, it is evident that, over the last seven years, consumption of content has evolved in the post-secondary community. Educational institutions have come to rely increasingly on licensed content, where licenses are of both the proprietary and open variety. Unauthorized copying reliant on exceptions to copyright is decreasing. And yet, if Access Copyright has its way, Canadian students will be charged fees to cover the costs assessed against their institution, regardless of whether that fee represents actual compensable transactions of content and use by each student.

[1] In October 2018, the Scholarly Publishing and Academic Resources Coalition (SPARC) issued promising news with respect to OER: $1 billion of savings had been realized through global adoption of open educational resources. While the lion’s share of this savings was generated in the United States, Canada is onboard with OER development and adoption. Notably, the province of British Columbia alone achieved over $10 million in savings between 2012-2019.

[2] Section 29, Fair Dealing is principle among them. But also applicable to students’ learning are S29.21 NonCommercial User Generated Content and S30.4 Work available through Internet. Plus, there are a host of exceptions addressing Educational Institutions.  The proposals offered by Access Copyright presume to discard the very existence of exceptions; said another way, the very existence of the Copyright Act.

[3] CCH is predominantly known by the Supreme Court’s final adjudication of the case, but scrutiny of the case at the trial division reveals the amounts copied without authorization; see CCH Canadian Ltd. v. Law Society of Upper Canada. (1999)  Para. 136.  These copies were later accepted as fair dealing by the Supreme Court. CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13

[4] Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37.

The first full length episode of the new LawBytes podcast features a conversation with UK Information Commissioner Elizabeth Denham, who leads the high profile investigation into Facebook and Cambridge Analytica. Denham, who previously served as Assistant Commissioner with the federal privacy office and as the British Columbia Information and Privacy Commissioner, reflected on her years in Canada, particularly the Canadian Facebook investigation and concerns with the Google Buzz service. Denham emphasized the need for Canadian legislative reform in order to address today’s privacy challenges. Denham was recently appointed chair of the International Conference of Data Protection and Privacy Commissioners, which she expects will increasingly focus on global privacy standards.

The podcast can be downloaded here and is embedded below. Subscribe to the podcast via Apple Podcast, Google Play, Spotify or the RSS feed. Updates on the podcast on Twitter at @Lawbytespod.

Episode Notes:

12th Annual Deirdre Martin Lecture on Privacy

Credits:

#CambridgeAnalytica: ‘Data crimes are real crimes’ Denham, EU Reporter, 4 June 2018

Facebook Privacy Concerns, CBC News: The National, 17 July 2009

Privacy commissioner urges legislative reform in the wake of Facebook data scandal, CBC News, 17 April 2018

News Update: Google (NASDAQ:GOOG) Unveils Google Buzz: Social Networking for Gmail, TradetheTrend, 9 February 2010

Cambridge Analytica: Whistleblower reveals data grab of 50 million Facebook profiles, Channel 4 News, 17 March 2018

The post The LawBytes Podcast, Episode 2: ”It’s Time to Modernize the Laws” appeared first on Michael Geist.

In recent years the intersection between law, technology, and policy has exploded as digital policy has become a mainstream concern in Canada and around the world. I am very excited to announce the launch of LawBytes: A Podcast with Michael Geist. This podcast will explore digital policies in conversations with people studying the legal and policy challenges, setting the rules, or who are experts in the field. It will provide a Canadian perspective, but since the internet is global, examining international developments and Canada’s role in shaping global digital policy is be an important part of the story.

The preview episode is available now and first full episode – a conversation with UK Information Commissioner Elizabeth Denham – will be available next week. All episodes will be available under a Creative Commons licence. You can subscribe at Apple Podcasts, Google Play, or Spotify as well as follow on Twitter at @LawBytesPod.

The post Welcome to LawBytes: A New Podcast on Digital Policy in Canada appeared first on Michael Geist.

Equustek Solutions v. Google Inc., a case that originated in British Columbia, Canada, in 2014, captured international attention as one of the first internet jurisdiction cases to be considered by a nation’s highest court. My CIGI Policy Brief notes that since then, the case has emerged as a cautionary tale about increasingly aggressive legal approaches with respect to the Internet, with significant implications for online governance.

Equustek’s legal battle against Google ultimately wound its way to the Supreme Court of Canada, where, in the summer of 2017, Canada’s highest court decided an internet jurisdiction case that has attracted global attention. Equustek Solutions v. Google Inc. was characterized as a classic David versus Goliath legal battle, pitting a small Canadian company concerned with misuse of its intellectual property (IP) against the world’s leading internet search engine. The case raised an important question: can a single national court dictate the content of search results for internet users worldwide? If so, could this effectively create new internet takedown order — an “Equustek order” — which could be used to remove global content.

While critics of global takedown orders warned that upholding the validity of the order would invite global uncertainty through inevitable legal conflicts and further empower large internet intermediaries who could selectively choose which laws and orders to follow, the aftermath of the decision has placed the spotlight on an additional consequence. In part due to the Equustek doctrine, Canadian courts now more aggressively assert jurisdiction over online activities. Indeed, Canada could emerge as ground zero for internet litigation, with its courts and tribunals at ease with a principle that extends domestic law to an international arena. The full policy brief is available here.

The post The Equustek Effect: How One Case Has Sparked Canada’s Aggressive Approach Over Internet Jurisdiction appeared first on Michael Geist.

It would appear that Innovation, Science and Economic Development Minister Navdeep Bains has had enough. Enough of incumbent telecom giants claiming that more competition would be bad for consumers. Enough of CRTC Chair Ian Scott dismissing consumer concerns about the state of communications services. Enough of half-measures that fail to significantly move the policy needle and leave the government looking weak on an issue that is critically important to its innovation agenda. Yesterday, Bains took his most significant policy step to date to address telecommunications concerns by issuing a proposed policy direction to the CRTC based on competition, affordability, consumer interests, and innovation. The proposed policy direction will take several months to work its way through a defined legal process (publication in the Canada Gazette in early March, 30 days for public comment, 40 House of Commons sitting days before it can take effect), but should be operational by the summer.

The core of the proposed policy direction requires the Commission to consider how regulatory measures can be used to promote competition, affordability, consumer interests, and innovation by assessing the impact on seven goals:

the Commission, when relying on regulation, should consider how the measures used can promote competition, affordability, consumer interests and innovation, namely the extent to which they
i.    encourage all forms of competition,
ii.    foster affordability and lower prices, particularly when there is potential for telecommunications service providers to exercise market power,
iii.    ensure that affordable access to high quality telecommunications services is available,
iv.    enhance and protect the rights of consumers in their relationships with telecommunications service providers,
v.    reduce barriers to entry and barriers to competition for new and smaller telecommunications service providers,
vi.    enable innovation in telecommunications services, including new technologies and differentiated service offerings, and
vii.    stimulate investment in research and development and in other intangible assets that support the offer and provision of telecommunications services

In addition, when relying on regulation, the Commission will be required to “demonstrate its compliance with this Order and should specify how the measures used can, as applicable, promote competition, affordability, consumer interests and innovation.”

The order of the seven goals represents an inversion of past policy, which emphasized investment over competition. Indeed, new policy measures to promote competition have been invariably greeted with warnings by incumbents that those measures could lead to reduced investment. The government obviously wants investment, but it is now more intently focused on consumer-related issues. Further, the call to encourage all forms of competition is clear rejection of prioritizing “facilities-based competition”, sending an unmistakable signal that the next wireless review should result in the entry of new competitors, including mobile virtual network operators.

What are the other implications of the proposed policy direction?

First, it signals that telecom policy will be an election issue in 2019. Wireless pricing, misleading telecom sales tactics, and an embarrassingly out-of-touch CRTC under Ian Scott have attracted significant media attention and are forcing the issue onto the political agenda. The Liberal approach to date on the telecom issue has been largely ineffective: the “step in the right direction” refrains are increasingly mocked, the referrals back to the Commission rejected, and their selection of CRTC chair viewed as a blunder. The proposed policy direction sends the signal that the government wants to prioritize alternative competition such as MVNOs, affordability, and consumer protection. Look for the other parties to jump in with their own proposals in the months ahead.

Second, the government is not buying what the incumbent telecom companies have been selling. Bell, Telus, and Rogers have tried to cast doubt on studies that consistently find Canadian consumers pay some of the highest wireless prices in the world. They have downplayed the reports of misleading sales tactics. They have implausibly argued that competition from MVNOs would harm consumers (an April 2018 letter from BCE CEO George Cope to Bains released under ATIP warns of “the damage that would be done to competition and consumers”). The government isn’t buying any of it, instead introducing a proposed policy direction that features policies that have been consistently opposed by the incumbents.

Cope Letter to Bains, April 16, 2018 excerpt

Third, the proposed policy direction will make a difference. When the last policy direction on market forces was introduced in 2006, Bell executives touted the move toward “fewer regulatory proceedings and minimally intrusive regulations.” In the years since, scarcely a proceeding has gone by where Bell has not raised it with the CRTC, cited it when asking the Commission to review and vary its previous ruling, referenced it in cases at the Federal Court, or relied on it when petitioning Cabinet to vary a decision. While that does not mean that every outcome is fully consistent with the policy direction, it requires the regulator to grapple with the issue and provides a ready foundation for potential reviews or appeals. With a proposed policy direction focused on competition, affordability, and consumers, those perspectives will become a more prominent part of the regulatory process that cannot be easily dismissed.

Fourth, the policy direction is aimed at the CRTC, but the Broadcast and Telecommunications Legislative Review panel ought to also pay attention. The BTLR is an independent panel, perhaps best illustrated by its decision to keep submissions secret for months contrary to common principles of transparency and open government. Yet if the panelists hope to see their recommendations adopted by the government in any meaningful way, policies that fail to account for affordability or consumer interests will be on shaky ground. Indeed, given that Prime Minister Justin Trudeau rejected taxes on Internet providers to fund Canadian content literally minutes after a committee recommended it, repackaging Internet tax proposals are unlikely to find a receptive audience. The committee is certainly free to establish its own policy priorities, but the government has made its priorities abundantly clear with its proposed policy direction.

The post Enough is Enough: Bains Proposes CRTC Policy Direction Grounded in Competition, Affordability, and Consumer Interests appeared first on Michael Geist.

Last week, I joined the Broadcast Dialogue podcast to talk about the recent developments at the CRTC.  The discussion started with my post likening the Commission response to consumer issues under Chair Ian Scott file as a Seinfeld-like Penke File and moved into an assortment of other recent CRTC issues. When asked about the CRTC’s failure to name-and-shame the telecom companies most responsible for misleading tactics, I responded that “it left the distinct impression that the CRTC under Ian Scott is more interested in protecting the reputation of the incumbent companies than the interests of individual Canadians.” The full podcast discussion can be accessed here and is embedded below.

The post A CRTC More Interested in Protecting Incumbent Companies Than Consumers: My Appearance on the Broadcast Dialogue Podcast appeared first on Michael Geist.

While the music industry continues to focus on a so-called “value gap” that does not reflect the state of Canadian law, mounting data also suggests that it does not provide an accurate depiction of the revenues being generated in Canada today from Internet streaming. SOCAN, Canada’s largest music copyright collective, last week reported preliminary numbers for 2018, with the data indicating that Internet streaming revenues have now hit $62 million, likely surpassing both radio and television royalties as its second largest source of domestic revenues. In fact, Internet streaming now accounts for 22 per cent of SOCAN’s domestic revenues and will almost certainly become its largest domestic revenue source in 2019.

The growth of Internet streaming revenues in Canada runs counter to the oft-heard lobbying efforts that seek to paint the Internet as harming artists’ interests. SOCAN did not report any Internet streaming revenues as recently as 2012 (which coincides with the last round of Canadian copyright reform). Armed with a performing rights licence for Youtube and an agreement that made it easier to members to receive additional money for music posted to the video site, SOCAN Internet streaming revenues began to appear in 2013 at $3.4 million. That has grown significantly every year since: $12.4 million in 2014, $15.5 million in 2015, $33.8 million in 2016, $48.6 million in 2017, and now $62 million in 2018. Along the way, Internet streaming revenues have overtaken overtaken cinema, pay audio, private copying, satellite radio, general, concert, television, and radio.

SOCAN Internet streaming revenues, socan.ca

Internet streaming revenues may make for a convenient target when it comes to lobbying for copyright reform, but the reality tells a far different story. SOCAN points to 8 per cent growth in domestic revenues last year, but  Internet streaming grew by 27 per cent and accounted for 64 per cent of increased domestic revenues. In fact, since the 2012 copyright reforms, Internet streaming revenues have gone from nothing to accounting for nearly 1 of every 4 dollars collected by SOCAN from domestic sources.

The post Canada’s Internet Music Success Story: SOCAN’s Canadian Internet Streaming Revenues Surpass Radio Royalties appeared first on Michael Geist.

Fair Dealing week begins tomorrow with seminars, workshops, and discussion spanning the country. It speaks well of the efforts of post-secondary communities to raise understanding of its importance. Many fair dealing stories will circulate this week; I have one of my own to add. Fair dealing is personal.

My parents emigrated from India to Canada in the 1960s. As to why they chose Canada, my mother later explained the decision as a process of elimination. Both had grown up through the country’s Independence struggle and lived the life of noncooperation, whatever hardship it may have entailed. So Britain never made the list. The United States was given some consideration; but, in my mother’s words: “We had all wept over Uncle Tom’s Cabin.” And so “No” to a society that was still struggling to provide civil rights to all its citizens. Canada? It seemed nice, inoffensive. Years later my mother gave me these memorable words: “I didn’t realize we had left one colonized nation, only to join another.”

That the undercurrent of being a colonized nation still seemed to permeate Canada in the twentieth century hints at how close to the surface that current was in the years immediately following Confederation. Canadian industry was particularly affected, including the publishing sector. I cover some of this history in “The Geopolitics of Nineteenth-Century Canadian Copyright, as seen by some British Authors, in the recently published Canada 150 Special Issue of the Papers of the Bibliographical Society. This paper complements an earlier work of mine, “The Copyright Act of 1889—A Declaration of Independence,” published by the Canadian Historical Review, which examined the same events, from documents compiled by the British Government. Taken together, it is a reminder that copyright policy cannot be enacted in a vacuum–the effect of change is conditioned by history.

Returning to the theme in hand, prior to leaving India, my mother was a Lecturer in Mathematics and a freelance writer of some repute. In Canada, while my brother and I were young, she stayed home with us but would occasionally return to writing. However, multiculturalism was not yet a gleam in anyone’s eye, and diversity in publishing nonexistent. The views of a visible minority woman, no matter how educated, no matter how capable with her pen, were of little interest to the editors of the day. (No amount of copyright could change this.) And without the approval of the gatekeepers, there was no means to reach an audience.

My mother’s assays in writing were infrequent as it was a period of coming to grips with total responsibility for housekeeping and child rearing amid the inescapable isolation of immigrants, not to speak of the deflation of rejections. But one rejection will always stand out in my mind, because the work was praised by the editor (from Macleans no less) but still declined as it had been forestalled in timeliness. The cause of the delay? A well-meaning intermediary had insisted that my mother’s quoting of one sentence from Subject India, by H.N. Brailsford, required copyright clearance.

Because of that inept advice, my mother had dutifully written to the book’s publisher, who had then contacted Brailsford’s widow, who sent back a charming letter saying how happy she was that her husband’s work was still being read. But this provision of consent took time to reach Canada; in the meantime, Macleans had already chosen their content.

Fair Dealing matters. Individual writers, musicians and artists should not need to be well-versed in the intricacies of copyright law, to benefit by exceptions to copyright defined in the law. It falls to teachers, administrators, and distributors to have the confidence of knowing that unauthorized use may be lawful.

Note: Subject India is now available through the Internet Archive.

In the fall of 2017, the CBC ran a high-profile story on high pressure sales tactics used by Canadian telecom companies, sparking a wide range of additional complaints. While Bell claimed the allegations were unfounded and untrue, the CBC followed up with a hidden camera investigation that found more misinformation from Bell sales representatives. Soon after the initial CBC story, the Public Interest Advocacy Centre wrote to CRTC Chair Ian Scott to request a public inquiry into the sales tactics. One month later, Scott rejected the request, noting “Canadians already have a variety of options available to them to seek redress depending on the nature of the issue.” The CRTC response did not sit well with the government, forcing ISED Minister Navdeep Bains to order the Commission to conduct an inquiry.

Yesterday, the CRTC issued its report to the government, where it was shocked – shocked – to find that there are misleading sales tactics being used by Canadian telecom companies that are harming consumers:

Having considered the matter in depth, the CRTC finds that it is apparent that misleading or aggressive retail sales practices are present in the telecommunications service provider market in Canada and, to some extent, in the television service provider market. These practices exist in all types of sales channels, including in store, online, over the telephone, and door to door. They occur to an unacceptable degree; they are harming Canadian consumers, in particular vulnerable Canadians; and they are a serious concern for the CRTC.

The report identifies some possible remedies, ranging from a stronger code of conduct (ironically, its effort to create an Internet Code of Conduct was boycotted last year by many consumer groups after it denied requests for a time extension to file evidence), expanded mandate for the CCTS, and greater monitoring of misleading or aggressive sales practices. There are some good ideas in the report, but there is absolutely no urgency with recommendations framed largely as policies the Commission “will consider” in the future. When asked about a potential timeline, the CRTC responded that it “will take action where appropriate and conduct further public processes where needed.” In other words, the CBC uncovers clear cases of misleading tactics and the industry regulator first ignores the problem, then rejects a request to investigate, and now – after Bell admits that it received over 24,000 consumer complaints about its sales practices in a single year – the best it can say is this “is the beginning of a process, not the end of a process.”

There was nothing stopping the CRTC report from including a timeline or targets or commitments to specific actions. The report does contain a few promises – for example, it says it will develop its own secret shopper program modelled on University of Ottawa work led by Professor Mary Cavanagh – but most recommendations are consigned to future consideration or study. In other words, the issue is reminiscent of the Seinfeld Penske File episode, as Canadian consumers can expect Scott to be hard at work on the issue with few expectations of tangible results. Indeed, the decision to reject an inquiry and only consider the issue when forced to do so by the government arguably says more about the CRTC’s commitment to consumer concerns than its report.

The post The CRTC Opens a Penske File: Chair Ian Scott Commits to Little Action Despite Finding Misleading Telecom Sales Tactics appeared first on Michael Geist.

CBC President Catherine Tait recently sparked a firestorm with comments to an industry conference that likened Netflix, the popular online video service, to the British Raj in India and French in Africa, warning about “imperialism and the damage that it can do to local communities.” The comments were rightly criticized as shockingly inappropriate, as if any video service can be reasonably compared to the subjugation of millions.

My Hill Times op-ed notes that some in the Canadian creator community rushed to defend Tait, however, viewing the comments as a strong assertion for Netflix regulation, the creation of a “level playing field”, and the need for all stakeholders to contribute to the broadcast system. Supporters of Netflix taxes and content requirements – who were joined in the Hill Times last week by Sheila Copps – present a vision of Canadian content at risk without regulatory intervention, leading to the loss of Canada’s “authorial voice” from film and television production.

Industry leaders promised that regulation will come, yet a closer examination of the arguments for Netflix taxes and Cancon requirements reveal that they are based on five deeply flawed premises.

First, there is no existential crisis for Canadian content film and television production. According to the most recent numbers from the Canadian Media Producers Association, the total annual value of the Canadian film and television production sector exceeds $8-billion, its largest amount ever. Spending on Canadian content production has hit an all-time high at $3.3-billion.

In fact, the sector has experienced a huge increase in foreign investment in Canadian production. Before Netflix began investing in original content in 2013, total foreign investment (including foreign location and service production, Canadian theatrical production, and Canadian television) was $2.2-billion. That number has since more than doubled to nearly $4.7-billion.

Second, Cancon regulations are a poor proxy for Canada’s “authorial voice”. The not-so-secret reality of the Canadian system is that Canadian authors are often missing entirely from productions. Films and shows based on Canadian fiction do not count toward meeting the necessary points for Cancon accreditation and even Canadian screenplay writers are not a mandatory requirement.

Unlike many other countries, which adopt flexible standards to determine domestic content, Canada’s rigid approach means that generic police or courtroom dramas may qualify as Canadian content while the television adaptation of Margaret Atwood’s Handmaid’s Tale does not. Moreover, co-production agreements with dozens of countries ensure that many productions qualify for Canadian support despite limited Canadian participation.

Third, if the playing field lacks balance, it is the regulated sector – not Netflix – that is the prime beneficiary. The broadcasting and broadcast distribution sectors receive a wide range of regulatory benefits, making their mandated contributions effectively a quid pro quo for policies such as simultaneous substitution rules, which allow Canadian broadcasters to replace foreign signals and advertising with their own, and copyright retransmission rules, which allow for the retransmission of signals without infringing copyright.

Unlike Netflix, the regulated sector also benefits from must-carry regulations, which mandate the inclusion of many Canadian channels on basic cable and satellite packages; market protection, which has shielded Canadian broadcasters from foreign competition such as HBO or ESPN for decades; and eligibility for Canadian funding programs and tax credits, for which many foreign services are frequently ineligible.

Fourth, notwithstanding the oft-heard insistence that everyone must contribute the system – Canadian Heritage Minister Pablo Rodriguez has declared “there is no free ride” –contributions to the system stem from an era of scarcity, in which broadcasting featured limited channels using public spectrum with licences granted to a handful of companies. It was that privileged access that led to contributions, not mere participation in the Canadian market.

That is why broadcasters must feature Canadian programming, but movie theatres do not. Or why broadcast distributors contribute a percentage of revenues to support Cancon, but book stores face no such requirement. Indeed, mandated contributions to an economic sector is the exception, not the rule: Canada does not require McDonald’s to contribute a portion of its revenues to support Canadian farmers or Nike to sell a certain percentage of Canadian-made shoes. In an era of abundance in which Internet streaming does not rely on scarce spectrum, the justification for a mandated contributions falls apart.

Fifth, Canadian content is already readily available and easily “discoverable” on the Netflix service. Alongside “official” Cancon, there are programs filmed in Canada, starring Canadian actors, or featuring Canadian stories. Some might argue that only official Cancon counts. Regardless of how it is measured, however, the reality is that Netflix already has a sizeable Canadian library, giving subscribers the option to watch hundreds of hours of Canadian content with little more than a simple search for “Canada.”

Cancon support remains an important ingredient in a vibrant Canadian cultural sector. Yet support such as grants, tax benefits, and other measures should come from general revenues as a matter of public policy, not through cross-subsidization models grounded in flawed arguments and inappropriate analogies.

The post Flawed Arguments and Inappropriate Analogies: Why Netflix Taxes and Cancon Requirements Should be Rejected appeared first on Michael Geist.

The CRTC released four cost awards yesterday arising from the Bell coalition’s proposal for a site blocking system. The Commission rejected the proposal last year on jurisdictional grounds and has now followed up with significant cost awards to public interest groups that participated in the process. The FairPlay coalition challenged the cost awards to OpenMedia and CIPPIC, arguing that its citizen engagement was “deliberately misleading and cannot represent responsible participation in the proceeding.” It also argued that the Public Interest Advocacy Centre’s participation was “irresponsible in nature” since it included arguments questioning the harm of piracy, which FairPlay maintained encouraged the Commission “to disregard the basic tenets of the Copyright Act.”

The CRTC soundly rejected these arguments, ordering the FairPlay coalition to pay over $130,000 in costs as part of four applications (OpenMedia/CIPPIC, PIAC, FRPC, UDC). The Commission’s analysis on the value of the OpenMedia/CIPPIC public campaign is particularly noteworthy given efforts by some commentators to question it:

the Commission considers that their respective public interest mandates and the online engagement campaign demonstrate that they represent the interests of Canadian Internet service subscribers. CIPPIC/OpenMedia have also satisfied the remaining criteria through their participation in the proceeding. In particular, the Commission considers that the online engagement campaign facilitated the broad and direct participation of thousands of Canadians in the proceeding. Importantly, a significant number of those who used the online engagement campaign to submit an intervention to the Commission also customized the text to include their personal views on the proposal put forward by FairPlay. This broad facilitation, as well as the opportunity for an individual response, created a diverse evidentiary record that contributed to a better understanding of the issues before the Commission. While FairPlay may consider certain content of the campaign to be misleading, the overall participation encouraged by the campaign contributed to a better understanding of the issues before the Commission and did not constitute irresponsible participation by CIPPIC/OpenMedia.

Further, the fact that CIPPIC/OpenMedia did not expand on the online engagement campaign evidence in their own intervention does not mean that they participated in the proceeding in an irresponsible way. Additional interpretive analysis of the evidence from the campaign within CIPPIC/OpenMedia’s intervention would have been preferable, both in assisting the Commission in analyzing the numerous individual interventions, and in making the direct link between the campaign and the content of CIPPIC/OpenMedia’s intervention. However, the failure to do so in this case was not irresponsible, and the clear link between the campaign and the content of the intervention on issues such as network neutrality ensured that the entirety of CIPPIC/OpenMedia’s participation contributed to a better understanding of the issues before the Commission.

The CRTC similarly rejected claims that PIAC’s participation was irresponsible:

PIAC’s copyright submissions, although novel, remained relevant and assisted the Commission in developing a better understanding of the matters that were considered. FairPlay’s application itself proposed a novel use of the Telecommunications Act, so the proceeding should have been expected to result in the advancement of unconventional or otherwise innovative arguments by interveners.

The CRTC decisions are welcome, confirming the value of public interest campaigns that encourage the public to participate in proceedings and ensure their voices are heard. While there has been considerable criticism of the Commission in recent months regarding its treatment of civil society, it deserves credit for thoroughly rejecting FairPlay’s attempt to avoid paying the costs associated with responding to its now-defeated proposal.

The post CRTC on OpenMedia’s Site Blocking Campaign: “Contributed to a Better Understanding of the Issues” appeared first on Michael Geist.

Last week, I appeared before the House of Commons Standing Committee on Access to Information, Privacy and Ethics as part of its study on government services and privacy. The discussion touched on a wide range of issues, including outdated privacy rules and the policy complexity of smart cities. I concluded by noting:

“we need rules that foster public confidence in government services by ensuring there are adequate safeguards, transparency and reporting mechanisms to give the public the information it needs about the status of their data, and appropriate levels of access so that the benefits of government services can be maximized. That is not new. What is new is that this needs to happen in an environment of changing technologies, global information flows, and an increasingly blurry line between public and private in service delivery.”

My full opening remarks are posted below.

Appearance before the House of Commons Standing Committee on Access to Information, Privacy and Ethics, January 29, 2019

Good afternoon. 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 speciality include digital policy, intellectual property, and privacy.  I served for many years on the Privacy Commissioner of Canada’s External Advisory Board and I have been privileged to appear before multiple committees on privacy issues, including PIPEDA, Bill S-4, Bill C-13, the Privacy Act, and this committee’s review of social and media privacy.

I am also the chair of Waterfront Toronto’s Digital Strategy Advisory Panel, which is actively engaged in the smart city process in Toronto involving Sidewalk Labs.

As always, I appear in a personal capacity as an independent academic representing only my own views.

This committee’s study on government services and privacy provides an exceptional opportunity to tackle many of the challenges surrounding government services, privacy and technology today. Indeed, I believe that what makes this issue so compelling is that it represents the confluence of public sector privacy law, private sector privacy law, data governance, and emerging technologies.

The Sidewalk Labs issue is a case in point. While it is not about federal government services – it is a municipal project – the debates are fundamentally about the role of the private sector in the delivery of government services, the collection of public data, and the oversight or engagement of governments at all levels. For example, the applicable law to the project remains somewhat uncertain: is it PIPEDA?  Provincial privacy law? Both? How do we grapple with new challenges when even determining the applicable law is not a straightforward issue.

My core message today is that looking at government services and privacy requires more than just a narrow examination of what the federal government is doing to deliver services, assessing the privacy implications, and identifying what rules or regulations could be amended or introduced to better facilitate services that meet the needs of Canadians and provide them with the privacy and security safeguards that they rightly expect.

I believe that the government services of tomorrow will engage a far more complex ecosystem that involves not just the conventional questions surrounding the suitability of the Privacy Act in the digital age. Rather, given the overlap between public and private, federal, provincial, and local, domestic and foreign, we need a more holistic assessment that recognizes that service delivery in the digital age necessarily implicates more than just one law.

Those services will involve questions about the sharing of information across government, the location of data storage, the transfer of information across borders, and the use of information by governments and the private sector for data analytics, artificial intelligence, and other uses.

In other words, we are talking about the Privacy Act, PIPEDA, trade agreements that feature data localization and data transfer rules, the GDPR, international treaties such as the forthcoming work at the WTO on e-commerce, community data trusts, open government policies, crown copyright, private sector standards, and emerging technologies.

It is a complex, challenging, and exciting space. I’d be happy to touch on any of these issues during questions, but in the interests of time, I will limit my slightly deeper dive to the Privacy Act, which as you know is the foundational statute for government collection and use of personal information.

There have been multiple studies and successive federal privacy commissioners who have tried to sound the alarm on the legislation that is viewed as outdated and inadequate. Canadians understandably expect that the privacy rules that govern the collection, use, and disclosure of their personal information by the federal government will meet the highest standards. For decades, we have failed to meet that standard. As pressure mounts for new uses of data collected by the federal government, the necessity of a law fit-for-purpose increases.

I’d like to point to three issues in particular with the federal rules governing privacy and their implications:

i.    Reporting Power

The failure to engage in meaningful Privacy Act reform may be attributable in part to the lack of public awareness of the law and its importance.  The Privacy Commissioner has played an important role in educating the public about PIPEDA and broader privacy concerns.  The Privacy Act desperately needs to include a similar mandate for public education and research.

Moreover, the notion of limiting reporting to an annual report reflects a by-gone era.  In our current 24 hour, social media driven news cycle, restrictions on the ability to disseminate information – particularly information that touches on the privacy of millions of Canadians – cannot be permitted to remain out of the public eye until an annual report can be tabled.  Where the Commissioner deems it in the public interest, the Office must surely have the power to disclose in a timely manner.

ii.    Limiting Collection

The committee has heard repeatedly that the Privacy Act falls woefully short in meeting the standards of a modern privacy act.  Indeed, at a time when government is expected to be the model, it instead requires less of itself than it does of the private sector. A key reform in my view is the limiting collection principle. A hallmark of private sector privacy law, the government should similarly be subject to collecting only that information that is strictly necessary for its programs and activities.

This is particularly relevant with respect to emerging technologies and artificial intelligence. The Office of the Privacy Commissioner of Canada recently reported on the use of data analytics and AI in delivering certain programs. For example, it cited:

•    the Immigration, Refugees and Citizenship Canada (IRCC) Temporary Resident Visa Predictive Analytics Pilot Project which uses predictive analytics and automated decision-making as part of the visa approval processes

•    the CBSA’s use of advanced analytics in its National Targeting Program to evaluate the passenger data of all air travelers arriving in Canada, as well as its planned expanded use of analytics in risk assessing individuals;

•    the Canada Revenue Agency’s (CRA’s) increasing use of advanced analytics to sort, categorize and match taxpayer information against perceived indicators of risk of fraud and non-compliance.

These technologies offer great potential, but they also may also encourage greater collection, sharing and linkage of data. This requires robust privacy impact assessments and considerations of the privacy cost-benefits.

iii.    Data Breaches and Transparency

Breach disclosure legislation has become commonplace in the private sector privacy world and it has long been clear that similar disclosure requirements are needed within the Privacy Act. Despite its importance, it took more than a decade for Canada to pass and implement data breach rules for the private sector. As long as that took, we are still waiting for equivalent legislation at the federal government level.

As this committee knows, the data indicates that hundreds of thousands of Canadians have been affected by breaches of their private information. The rate of reporting these breaches remains low. If the public is to trust the safety and security of their personal information, there is a clear need for mandated breach disclosure rules within government.

Closely related to the issue of data breaches are broader rules and policies around transparency.  In a sense, the policy objective is to foster public confidence in the collection, use, and disclosure of their information by adopting a transparent, open approach about policies, safeguards, and instances where we fall short.

Recent emphasis has been on private sector transparency reporting.  Large Internet companies such as Google and Twitter have released transparency reports and they have been joined by some of Canada’s leading communications companies such as Rogers and Telus.  Remarkably, there are still some holdouts – notably Bell – that do not release transparency reports.

However, these reports represent just one side of the picture. Public awareness of the world of requests and disclosures would be far more informed if government also released transparency reports.  These need not implicate active investigations, but there is little reason that government not be subject to the same expectations on transparency as the private sector.

Ultimately, we need rules that foster public confidence in government services by ensuring there are adequate safeguards, transparency and reporting mechanisms to give the public the information it needs about the status of their data, and appropriate levels of access so that the benefits of government services can be maximized. That is not new.  What is new is that this needs to happen in an environment of changing technologies, global information flows, and an increasingly blurry line between public and private in service delivery.

I look forward to your questions.

The post Government Service Delivery in the Digital Age: My Appearance Before the Standing Committee on Access to Information, Ethics and Privacy appeared first on Michael Geist.

CBC President Catherine Tait appeared on a panel of Canadian media leaders earlier today at the Prime Time in Ottawa conference devoted to “a look ahead.” After cutting off the Netflix representative at one point and complaining that his comments were running too long, Tait concluded with a stunning and wholly inappropriate analogy to characterize the impact of Netflix in Canada:

I was thinking of the British Empire and how if you were there and you were the viceroy of India you would feel that you were doing only good for the people of India. Or similarly, if you were in French Africa, you would think I’m educating them, I’m bringing their resources to the world, and I’m helping them. There was a time where cultural imperialism was absolutely accepted and, in fact, if you were a history student you would be proud of the contribution that these great empires gave.

I would say we are at the beginning of a new empire and just as it is probably the most exciting time in terms of screened entertainment, that I certainly in my career that I’ve ever experienced in terms of quality. When I watched “My Brilliant Friend” I was so moved to see a fantastic Italian language show with an Italian dialect. So unbelievable to be able to experience this cultural sharing. So for this we are very grateful to Netflix. However, fast forward, to what happens after imperialism and the damage that can do to local communities. So all I would say is let us be mindful of how it is we as Canadians respond to global companies coming into our country.

While it may be tempting to dismiss the comments as a mere error of judgement (Tait started the comment by noting she was “going off-script”), the reality is the CBC has become exceptionally hostile toward the Internet and Internet services. It was a prominent supporter of the website blocking proposal that was rejected last year by the CRTC, making it an outlier among public broadcasters that have typically worked to counter site blocking. In fact, an access-to-information request I filed revealed that CBC executives admitted that “this really isn’t our fight and it will cost us.”

However, the CBC doubled-down on its position in its submission to the Broadcast and Telecommunications Legislative Review panel, calling for an expansion of site blocking to also include “blocking of websites that disseminate manipulated content, including news.” The proposal confirms fears that a site blocking system would quickly expand beyond copyright.

The CBC submission also calls for the establishment a new Internet taxes, applicable to both broadband and wireless services to fund Canadian programming. It envisions a full Internet regulation structure with the CRTC empowered to licence and regulate online services to contribute to the discoverability of Cancon, including regulations on “digital media undertakings to ensure the promotion and discoverability of Canadian content.” It would also like to see requirements that online services provide Canadian rightsholders with data on how their content is used.

Tait tweeted out a portion of her cultural imperialism remark – “we are at the beginning of a new empire. Let’s be mindful when responding to global companies coming to Canada – confirming that this was no lapse. Rather, it represents a shocking lack of historical awareness and a regulatory mindset that is completely out-of-touch with millions of Canadians who both pay for the CBC through their tax dollars and subscribe to Netflix.

The post The Real Over-the-Top: CBC President Likens Netflix to Cultural Imperialism Such As the British in India or French in Africa appeared first on Michael Geist.

The call for Internet and Netflix taxes are not the only demands raised by Canadian cultural groups regarding online video services. Many groups argue that the services should be required to make Canadian content more prominent, citing the challenge of “discoverability” of Canadian content in a world of seemingly unlimited choice. While the ACTRA call for government sanctions against search engines that refuse to prioritize Cancon in search results is an extreme example, many have asked the Broadcast and Telecommunications Legislative Review panel to either mandate that a certain percentage of the Netflix library consist of Canadian content or that it more actively promote Cancon on the service.

For example, Unifor wants to mandate that 20 per cent of Netflix television content be Canadian:

That 20 per cent of non-feature film programming available to subscribers be Canadian; that no less than 5 per cent of English language feature films be Canadian; and that no less than 8 per cent of French-language features films be Canadian.

Meanwhile, ACTRA calls for a 20 per cent across the board requirement:

All services offering on-demand programming content to Canadian consumers, including OTT services and music streaming services – regardless of the technology used to distribute the content – maintain a minimum of 20 per cent of Canadian content in the program selections offered to consumers.

Others focus on greater prominence for Canadian content. The CBC recommends:

Players operating in the Canadian system should provide appropriate prominence to Canadian content choices through search, menus and recommendations.

The CRTC hints at a similar requirement in the name of discoverability:

Whether it be music, podcasts, short‑form video, a one-hour drama series, feature-length film or any other type of content, regardless of what platform it is offered on, all stakeholders should be obligated and incented to promote and make content by Canadians discoverable, including government funding supports.

But how hard is it to find Canadian content on Netflix?  It turns out, not very.  Last weekend, I created a new Netflix account to see what someone with no algorithmic viewing history would find. I started with a simple search for Canada, which provided the following result featuring several Canadian shows (Kim’s Convenience, Frontier, and Schitt’s Creek).

Netflix Canada Search

The result also included the option to click on links for Canadian TV Shows, Canadian Movies, and more. Once I clicked on those links, dozens of shows and movies popped up.

Netflix Canada Search Results

After streaming about ten hours of Canadian shows – Schitt’s Creek, Kim’s Convenience, Frontier, and Heartland – I noticed that my main Netflix page now featured Canadian shows in the Popular on Netflix tab.

Popular on Netflix

and a new Celebrating Canadian People, Places, and Stories tab appeared on the main page.

Netflix Celebrating Canadian People, Places, and Stories

Not all of this content is strictly Cancon under the points system. Alongside “official” Cancon, there are programs filmed in Canada, starring Canadian actors, or featuring Canadian stories. Some might argue that only official Cancon counts. However, Canadian actors or local film production does matter: much of it counts toward Cancon points, benefits the country economically, and reflects a connection to the country. Regardless of how it is measured, however, the reality is that Netflix already has a sizable Canadian library, giving subscribers the option to watch hundreds of hours of Canadian content. Apparently, all it takes is a simple search for “Canada.”

The post Hidden in Plain Sight?: The Search For Canadian Content on Netflix appeared first on Michael Geist.

The escalating battle being waged for new Internet taxes to fund Canadian content does not stop with proposals for new fees on Internet access and online video services. Cultural groups also want to increase the “discoverability” of Canadian content by mandating its inclusion in search results. According to the ACTRA submission to the broadcast and telecom legislative review panel, it has been calling for search engine regulation for the past 20 years:

ACTRA stated during the 1999 CRTC process that Internet search engines would become the gateway for consumers to access the vast array of entertainment and information now available from around the world. We argued then the CRTC should regulate them.

It now argues for mandated inclusion of Canadian content in search results for cultural content under threat of economic sanction:

Regulating search engines would be difficult, but ACTRA recommends the government approach search engines like Google, Bing and others, and request they ensure Canadians are offered some Canadian choices in their search results. While it is neither possible nor appropriate to interfere in the final selection made by individuals, Canadian consumers should have a real choice, including Canadian films, television programs and music. We expect companies would concur with the government’s reasonable request to be seen as good corporate citizens. If a particular search engine does not agree to this request, the government should impose an appropriate regulatory constraint or burden, such as amending the Income Tax Act to discourage Canadians from advertising on search engines that fail to comply.

In other words, ACTRA wants the government to threaten search engines with regulatory constraints it they refuse to tinker with their algorithms to ensure that Canadian content appears when Canadian search for cultural or artistic content.

There is no doubt that search engines would refuse the government’s “request”, noting that governments should have no role in determining search results of lawful content in a free and democratic society. Indeed, ACTRA would rightly reject a government policy to condition grants or other public support for Canadian creators on the inclusion of approved messages within the content of a show. Yet it thinks that it is acceptable for the Canadian government to dictate search results to advance a government cultural policy under threat of economic penalties. It isn’t and the proposal should be firmly rejected.

The post ACTRA Wants Government To Penalize Search Engines that Refuse to Promote Canadian Content in Search Results appeared first on Michael Geist.

The battle over the future of Canadian broadcasting and telecommunications is quickly emerging as a hot-button policy issue, with a government-mandated review of the law recently garnering thousands of public responses. My Globe and Mail op-ed notes that while recommendations from an expert panel are not expected for months, Canada’s broadcast regulator, the CBC, and several high-profile cultural groups are lining up behind a view that Canadian culture is facing an existential crisis. Among the ideas being proposed are new taxes on internet and wireless services, mandated Cancon requirements for Netflix and the prioritization of Canadian content in search results from online services to enhance its “discoverability.”

There are unquestionably real communications policy issues in Canada for Innovation, Science and Economic Development Minister Navdeep Bains and Canadian Heritage Minister Pablo Rodriguez to grapple with: Some of the world’s highest wireless prices hamper adoption and usage, privacy safeguards have failed to keep pace with online threats and public-interest voices say they don’t feel heard at the Canadian Radio-television and Telecommunications Commission (CRTC) under chair Ian Scott.

At the same time, Canadian cultural groups are raising dystopian fears that if Canada maintains an open market for online video services, it could mean the end of Canadian content and bankruptcy for Canadian broadcasters.

These fears are not new. For decades, the prospect of U.S. content flowing across the Canadian border has been viewed as a threat, leading to policies that amounted to creating a Canadian broadcast wall. Canada adopted rules that permitted replacing U.S. television signals with Canadian ones (so-called simultaneous substitution), the blocking of U.S. satellite television services and tight restrictions on foreign investment in the broadcasting sector.

Many of those same arguments for protecting the domestic industry are today repackaged for the internet, with Netflix viewed as an unregulated behemoth that threatens to overwhelm the Canadian broadcasting sector and destroy some of the funding mechanisms that have been used to support Canadian film and television production.

Yet the data indicate that there is no Cancon funding crisis. According to the most recent numbers from the Canadian Media Producers’ Association, the total annual value of the Canadian film and television production sector exceeds $8-billion, its largest amount ever. Spending on Canadian content production has hit an all-time high at $3.3-billion. In fact, the increase in foreign investment in production in Canada has been staggering. Before Netflix began investing in original content in 2013, total foreign investment (including foreign location and service production, Canadian theatrical production, and Canadian television) was $2.2-billion. That number has more than doubled in the past five years to nearly $4.7-billion.

Not only is there no crisis, but much like U.S. President Donald Trump’s pledge that someone else will pay for his border wall, Canadian creator groups similarly posit that their new funding proposals will be paid for by big telecom companies or foreign internet giants. Their recommendations are replete with plans to regulate online video services and require that they contribute millions toward Cancon creation funding. They also want a new tax imposed on both broadband and wireless services to fund Cancon, arguing that those taxes would replace the declining support from Canadian broadcasters, as well as direct financial support for the CBC from companies such as Google and Facebook.

There surely remains an important role for public support of Cancon, but the subsidization model of the past in which cable companies and broadcasters paid to support Canadian content production was at least premised on the fact that a cable subscription provides no more than access to broadcast content. Yet the internet offers a limitless array of possibilities that have nothing to do with broadcasting, making it difficult to justify a levy on service providers.

Plans for the government’s assistance to the news-media sector remain controversial, but they rightly adopt the position that if the media need public support and the government believes it is in the public interest to do so, funding should come from general revenue as part of broader government policy, not through a myriad of taxes and levies that run counter to other policy goals.

The unsurprising reality is that the new tax and regulation proposals will ultimately leave Canadian consumers paying the bill. New digital sales taxes would be paid by consumers, not companies that merely collect the applicable taxes. New taxes on Netflix to pay for Cancon would invariably lead to increased monthly subscriber costs and/or smaller content libraries to meet the new Cancon quotas. New taxes on ISPs or wireless services would lead to even higher prices and reduced affordability.

In other words, rather than embracing the opportunities that come from unprecedented global demand for scripted television programming and competing for the attention of Canadian viewers, some prefer to place their bets on a digital wall consisting of new taxes and regulations. And Canadian consumers are going to pay for it.

The post Building a Digital Wall: What Lies Behind The Emerging Battle Over New Taxes to Support Canadian Content appeared first on Michael Geist.

Last year, Bell and its supporters denied that its “Fairplay” site blocking plan would apply to virtual private networks (VPNs). Yet as first reported by the Wire Report (sub required), Bell asked the Canadian government to target some VPNs in its submission on the NAFTA re-negotiations. Throughout the site blocking debate, many cited concerns that the Bell coalition plan would expand beyond certain websites to VPNs. For example, I posted:

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.

Just days after Bell spoke directly with a CRTC commissioner in the summer of 2017 seeking to present on its site blocking proposal to the full commission, it asked Canadian Foreign Affairs Minister Chrystia Freeland to target VPNs as Canada’s key copyright demand in the trade talks. Its submission to the government stated:

The Canadian cultural industry has long been significantly harmed by the use of virtual-private-network (VPN) services, which facilitate the circumvention of technological protection measures put in place to respect copyright ownership in other jurisdictions such as Canada…When the ability to enforce rights in national markets breaks down it inevitably favours the largest markets (which become the de facto “global” market) at the expense of smaller open economies like Canada. This harms Canada both economically and culturally.

Canada should seek rules in NAFTA that require each party to explicitly make it unlawful to offer a VPN service used for the purpose of circumventing copyright, to allow rightsholders from the other parties to enforce this rule, and to confirm that is a violation of copyright if a service effectively makes content widely available in territories in which it does not own the copyright due to an ineffective or insufficiently robust geo-gating system.

This is precisely the concern that was raised in the context of the Bell coalition blocking system given fears it would expand to multi-use services such as VPNs just as a growing number of Internet users are turning to the technology to better safeguard their privacy and prevent online tracking.

In fact, the Bell submission went even further than just VPNs, urging the government to consider additional legal requirements on ISPs to enforce copyright rules:

Notice-and-notice has been a very incomplete solution to the problem of widespread digital piracy. While we do not believe it should be eliminated, the Government should explore other ways to secure the cooperation of service providers whose services are used for piracy (such as the site-blocking regimes required in Europe and also in place in many other countries throughout the world).

I’ve written before about how Bell is a global outlier among telecom companies with its aggressive lobbying for increased obligations for telecom companies with respect to copyright enforcement. Its secret attempt to target VPNs leaves little doubt that the now-defeated site blocking proposal would have invariably expanded far beyond a narrow group of websites and should be considered as part of the renewed emphasis on site blocking as part of the copyright review and the broadcast and telecom review.

The post Bell Urged Canadian Government To Ban Some VPN Services in NAFTA Submission appeared first on Michael Geist.

This week’s report that Canada is an outlier on wireless services with carriers generating more revenue per SIM than carriers in other countries and Canadian consumers on the low end of data usage, represents the latest in a long line of similar independent reports that confirm Canada’s status as a high-cost, low usage wireless market. Indeed, a government-commissioned comparative study, CRTC data, OECD data, and Rewheel Research all tell a similar story. Given that there is little to debate about the state of Canadian wireless pricing, the big question is now what Innovation, Science, and Economic Development Minister Navdeep Bains is prepared to do about it.

A new book from long-time Rogers executive Phil Lind provides insights into the backlash that any significant efforts to inject more competition into the market is likely to face from the incumbent carriers. The book contains several pages recounting the carrier battle in 2013 against Verizon entering the Canadian market with the active support of the then-Harper government. The story pulls back the curtain on lobbying efforts that involve active coordination by top tier executives at each company, active lobbying of MPs, journalists, and market analysts, as well as advertising campaigns designed to fight back against market-opening policy measures. Lind starts the story:

“In 2013, halfway through its mandate, Stephen Harper’s government was looking tired and bereft of captivating political ideas for the next election. It was then that the Conservative MP wrapped himself in his “Captain Consumer” cape and launched an assault upon Canada’s big three wireless phone companies: Rogers, Bell and Telus. He and his government were going to lower monthly wireless bills by cracking the cartel.”

Leaving aside the fact that the Harper government began focusing on wireless competition six years earlier in 2007 with a spectrum set-aside, Lind continues by explaining the government’s effort to convince Verizon to enter the market, which he characterizes as “inviting Goliath in and taking the slingshot away from David. When word of this leaked to Nadir Mohamed [then Rogers CEO], it put Rogers on an immediate war footing. (I’m sure Bell and Telus were, too).”

Lind points to Rogers’ investment in wireless and states:

“But Harper and government decided to put it all in jeopardy, from Canadian jobs to investment and retirement income, by offering Verizon Wireless spectrum – for which Rogers, Bell and Telus weren’t even allowed to bid – and by allowing Verizon to buy smaller Canadian wireless operating we were prohibited from buying. He was changing the rules, and badly. We moved to DEFCON 3, not quite all-out-war but ready for immediate action.”

The description of opening the Canadian wireless to foreign investment is quite something, but when the the initial meetings did not change the government’s mind, the company upped the ante:

“We moved to DEFCON 2. In the summer of 2013, the CEOs at Rogers, Bell and Telus appointed internal teams to coordinate a publicity campaign, called for Fair for Canada, through which we’d inform as many Canadians as possible about the dangers of Harper’s policy. I was the head of the Rogers team, Joe Natale (Rogers’s current CEO) led the Telus team; and Wade Oosterman led Bell’s. Jan Innes, as the fourth member of this tri-party team, coordinated media relations and advertising. Each of the three companies had people reporting to us, and we’d meet weekly, either in person or via conference call, to discuss tactics and overall strategy. We worked extremely well as a team.

The media was the lowest hanging fruit. Executives and high-profile experts like former communications minister Francis Fox penned opinion pieces supporting us and calling on the government to make the rules fair. We also held news conferences in cities and towns across Canada. Heidi [Bonnell] had us out meeting MPs on their own turf in ridings all over the country. Our unions explained the risk to jobs. Investor-relations people talked to telecom analysts about the potential impact. We lobbied the CRTC asking for their support. And we hired an advertising and marketing firm to blast out our messages.”

If this sounds familiar, it is precisely the same playbook used by Bell and Rogers last year in their campaign for site blocking, even using a similar name (Fairplay Canada). The use of the same tactics is unsurprising given that it worked in the Verizon case and the companies, which control the vast majority of media outlets in the country, have enormous leverage in conducting publicity and lobbying campaigns.

While none of this is secret – the lobbying efforts are readily apparent – it is rare to have an an on-the-record discussion of the strategies and combined efforts of companies who view foreign competitors as a bigger risk that domestic competition. For Innovation, Science and Economic Minister Navdeep Bains, it serves as a reminder that significant efforts to inject competition into the Canadian wireless market will likely place the big three incumbents on a war footing with efforts to scuttle any such policy plans.

The post “Immediate War Footing”: Phil Lind Recounts the Big Three Battle Against Wireless Competition in Canada appeared first on Michael Geist.