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The Fight for Fair Copyright Returns: Canadian Government Launches Major Copyright Review

Michael Geist Law RSS Feed - Wed, 2017/12/13 - 16:19

The Canadian government kicked off its review of the Copyright Act this afternoon with a motion to ask the Standing Committee on Industry, Science and Technology to conduct a study on the issue. The formal launch had been expected for months since the 2012 reforms included a mandatory review of the law every five years. Lobby groups have been steadily gearing up for the review, with some hoping to undo some of the balancing provisions of the last reform process or demanding new restrictions. Indeed, restrictions on fair dealing, takedown rules, website blocking, and copyright term extension will undoubtedly figure prominently in the lobby playbook. Yet for millions of Canadians, the copyright review offers an opportunity to ensure that the law meets the needs of education, innovation, consumer rights, and creators with more flexibility in the form of fair use and restoring neutrality on Canada’s restrictive digital lock rules.

The decision to send the copyright review to the Industry Committee may surprise some, but it is consistent with the Copyright Act, which makes it clear that the Minister of Industry is the minister responsible for the legislation. In an effort to dampen concerns that Canadian Heritage will play a diminished role in the review (the Canadian government has long treated copyright as a shared responsibility), the rumours are that the Standing Committee on Canadian Heritage may be asked to assist on certain issues. Unless carefully crafted, that approach seems likely to lead to unnecessary duplication with the same witnesses seeking opportunities to appear before both committees since copyright issues cannot be easily separated as “industry” or “heritage”. Further, the cumbersome administrative approach seemingly guarantees a lengthy process with the review likely to run for much of 2018.

The lobby group wish list will start with new restrictions on fair dealing. The fair dealing provision (Canada’s version of fair use) has been the subject of multiple Supreme Court of Canada decisions that have conclusively ruled that it is a user’s right that should be interpreted in a broad and liberal manner. The Canadian approach is arguably still more limited than provisions found in fair use countries such as the U.S., Singapore, South Korea, and Israel. Despite considerable evidence to the contrary, groups have seized on changes in industry licensing practices to claim that the Canadian law has harmed authors and publishers. While educational groups have veered away from a licence offered by Access Copyright, the reality is that licensing expenditures have increased since 2012. In fact, some Canadian authors and publishers have expressed concern that their works are being copied in education using fair dealing, despite the fact that their books have been licensed in perpetuity by dozens of educational institutions with the sector spending millions of dollars to acquire the rights to use hundreds of thousands of e-books. These demands for double payment on the backs of students, who already spend hundreds of dollars on books every semester, should stop and be called out at the committee.

Meanwhile the music industry, fresh off convincing the government to move Copyright Board reform to the front of the line, can be expected to continue its campaign on the so-called “value gap”, a misleading term for targeting notice-and-takedown rules that are not even part of Canadian law. The industry has enjoyed remarkable success since 2012, growing far faster the world average and passing Australia as the world’s 6th largest music market. The growth has come largely through Internet streaming revenues, which now generate tens of millions of dollars every year for creators, publishers, and the broader industry. The industry is also likely to continue to lobby for copyright term extension, as foreshadowed by a lobbying blitz just last month in Ottawa.

If that were not enough, Bell and other allies are likely to call for new rules on website blocking in Canada. Bell admits that copyright reform is not needed for site blocking, but the link to the Copyright Act ensures that the issue will be a prominent part of its lobbying campaign. The reality is that Canada is already home to some of the toughest anti-piracy laws in the world with many legislative tools readily available for rights holders and some of the largest damages provisions found anywhere in the world. Further, these only represent a portion of the lobby demands, which are likely to range from a massive expansion of potential damage awards (from Access Copyright) to a revival of the iPod tax/private copying levy (music) to the creation of a new fee for linking to newspaper articles.

While these represent potentially radical distortions of a balanced copyright system, the review offers important opportunities to fix some of the ongoing problems in the law. The notice-and-notice system was enacted with good intentions, but internal government documents acknowledge that the system has been used to pressure thousands of Canadians into paying settlements even in situations where they have not violated the law. There is a long-overdue need to restore the system to its original intent.

Canada’s fair dealing provision has proven critical in recent months for creators, who have used it to ensure that their creativity is not shut down or blocked (examples include cases involving the film Roomful of Spoons and a documentary film on the Vancouver Aquarium). Yet Canadian law would benefit from a full fair use provision, consistent with that found in many other innovative countries. Moreover, with the government betting heavily on Canada becoming a leader on artificial intelligence, the prospect of copyright slowing AI development is a real possibility. This points to the need for a specific exception for text and data mining, similar to provisions used in other countries around the world.

Canada’s digital lock rules were the most controversial aspect of the 2012 reforms, with Canada caving to U.S. demands for some of the most restrictive rules anywhere in the world. In fact, even as the U.S. has established new exceptions for digital locks, Canada’s rules have remained largely unchanged (the exception involved access for the blind and visually impaired). The solution has been obvious for years as Liberal MP Geoff Regan (now Speaker of the House) warned in 2012 that “what the government seems to want to do is preserve old models and ignore the fact that we have moved into a digital world.”  The law needs a clear exception for circumvention for legal purposes such as fair dealing, a reform that would simply bring neutrality to the digital and analog worlds.

There are no shortage of other positive reform issues including the elimination of crown copyright and addressing copyright associated with indigenous communities. The good news is that there are signals that the government gets the need for balance and Canadian-oriented policies as evidenced by its rejection of term extension and restrictive digital locks in the TPP negotiations and the recent International Trade committee report that warned against unbalanced U.S. IP demands in NAFTA. Most Canadians do not follow the day-to-day policy battles over copyright, but the law has a significant impact on many aspects of their daily lives. The copyright review of 2018 will help shape future reforms creating a critical need for individual Canadians to ensure their voices are heard.

The post The Fight for Fair Copyright Returns: Canadian Government Launches Major Copyright Review appeared first on Michael Geist.

Canadian Trade Committee Warns Against Unbalanced U.S. IP Demands in NAFTA

Michael Geist Law RSS Feed - Tue, 2017/12/12 - 13:05

The House of Commons Standing Committee on International Trade released its detailed study on the priorities of Canadian stakeholders in NAFTA earlier today. I appeared before the committee to discuss intellectual property and digital trade issues in September. The report includes notable recommendations on culture (retain the cultural exemption in NAFTA) and digital rights (ensure that digital trade provisions do not undermine Canadians’ privacy rights or security of their data, a nod to concerns over data localization and data transfer rules). It also features an important discussion on the intellectual property chapter, with clear support for retaining a made-in-Canada approach consistent with international standards.

The committee’s recommendation on intellectual property states:

That the Government of Canada, during the North American Free Trade Agreement negotiations, oppose provisions that would reduce its ability to ensure that the Canadian intellectual property regime balances the interests of right holders and users. As well, the government should work to preserve Canada’s ability to modernize its regime following domestic reviews.

The recommendation is important as it signals that the Liberal government recognizes that some of the NAFTA IP demands from the U.S. – notably including copyright term extension, increased copyright criminalization, and a notice-and-takedown system – would alter the Canadian copyright balance between rights holders and users. It is also an implicit rejection of the website blocking proposal raised by Bell, which would radically alter the copyright balance. Moreover, the emphasis on flexibility on domestic reforms reinforces that Canada should maintain the right to create its own copyright and IP laws that reflect international norms. That position is consistent with my submission before the committee earlier this year.

The NDP provided a supplemental opinion that focuses on the specific areas of copyright concern, highlighting the importance of access, supporting the notice-and-notice system, and rejecting any copyright term extension:

Canadian copyright policy must not be sacrificed at the altar of free trade. Maintaining balanced and sensible copyright policy is particularly critical in light of the fundamental connection between copyright law and the ability to exercise free expression online – through sharing knowledge, research, and art; participating in public and political discourse; contributing to the cultural commons; and inspiring, and building upon creativity. The NDP emphasizes the fact that notice-and-notice is an effective system that achieves objectives with respect to copyright infringement, while mitigating (albeit not completely) the harms that arise from notice-and-takedown.

The Canadian government, should reject any proposal to extend copyright terms beyond its current term of 50 years after the author’s death, knowing that current Canadian copyright terms are already largely in compliance with international copyright treaties.

The Conservatives also submitted a supplemental opinion, but it did not touch on the IP issues. The report confirms awareness and concern with U.S. efforts to export one-sided copyright and IP rules. Indeed, the government’s emphasis on copyright balance and the NDP’s clear rejection of copyright term extension represents a good starting position for both trade negotiations and the forthcoming domestic review of the Copyright Act.

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Net Neutrality Briefing: My Appearance Before the Standing Committee on Access to Information, Privacy and Ethics

Michael Geist Law RSS Feed - Mon, 2017/12/11 - 10:58

As the concern over U.S. net neutrality rules heats up, last week I appeared before the House of Commons Standing Committee on Access to Information, Privacy and Ethics to provide committee members with an hour-long briefing on the issue. The audio of the appearance can be found here. My opening remarks, which emphasized the Canadian net neutrality framework, the potential impact of U.S. policies, and the implications for privacy and freedom of expression, are posted in full below.

Appearance before the House of Commons Standing Committee on Access to Information, Privacy & Ethics, December 6, 2017

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 have appeared many times before this committee and as always, I appear in a personal capacity representing only my own views.

I am grateful to the committee for its commitment to privacy and access to information and its interest in how the issue of net neutrality may affect these issues. I propose to begin this briefing with an introduction to net neutrality, some comments on recent events, and then considerations of the intersection between net neutrality, privacy, and access.

Canada seemed lost when it came to Internet policy a little over a decade ago. The government showed scant interest in the technicalities of Internet services and the CRTC stood idly by as leading Internet providers limited speeds of some applications (a practice known as traffic shaping) and mused openly about new fees for the right to transmit content to subscribers.

Those early Internet policies are unrecognizable today as Canada has emerged as a world leader in supporting net neutrality. At its heart, net neutrality means that all content and applications should be treated equally and that choices made by Internet users should be free from ISP or telecom interference. The policies do not guarantee Internet success – no law does – but signals a clear commitment to placing consumers and creators in the Internet driver’s seat.

The foundation of Canadian policy lies in four CRTC decisions that address practices such as managing Internet traffic to limit speeds for some applications or creating pricing plans that “zero rate” certain content that does not count as part of monthly data consumption caps. CRTC policies now restrict these practices, recognizing that net neutrality preserves the “common carrier” approach for ISPs and encourages marketplace competition and innovation based on price, speed, and quality of networks.

The CRTC approach allows for Canadians to file complaints about net neutrality violations, which they have done on occasion. The CRTC proceeds to investigate and, in some instances, conduct hearings into the broader implications raised by the concern. The policies also provide for greater transparency on network management practices, requiring ISPs to disclose how they manage their networks and what their practices mean for consumer Internet use.

In recent weeks, Canadian leaders and regulators have made their support for net neutrality clear. For example, Navdeep Bains, the Innovation, Science and Economic Development Minister responded to the U.S. developments that I’ll discuss momentarily by affirming that “Canada will continue to stand for diversity and freedom of expression. Our government remains committed to the principles of net neutrality.”

Canadian Heritage Melanie Joly has similarly emerged as a notable proponent of net neutrality. Some cultural groups have called on the government to abandon net neutrality by mandating preferential treatment of Canadian content. These recommendations have come as recently as last week as part of the CRTC’s consultation on the future of broadcast. Yet Joly has affirmed that the principle remains at the core of Canadian cultural policy, noting “we will continue to champion the Internet as a progressive force and an open space without barriers. As a government, we stand by the principle of net neutrality.”

The Canadian commitment to net neutrality has been similarly endorsed at the regulatory level. New CRTC chair Ian Scott told an industry conference last month that “as companies continue to innovate in their offerings to Canadians, the CRTC will continue to ensure that Canada’s Internet neutrality provisions are respected…the owners and operators of the country’s communications may not discriminate against content based on its origin or destination.”

As you know, the FCC, the U.S. telecommunications regulator, plans to rollback net neutrality regulations. This has sparked an immediate backlash from the Internet community who fear that the decision will turn the Internet in the U.S. into a cable-like service dominated by the carriers and deep-pocketed giants that can afford to pay new fees to keep their content on the fast lane. The U.S. order, which would also block states from implementing their own versions of net neutrality policies, is set for a vote next week.

Canadian consumers may be shielded from net neutrality abuses in their home Internet use, but the effects of the U.S. decision may still be felt here. Since Canadian Internet traffic often transits through the U.S., there are concerns that Canadian data could get caught by non-neutral policies. Moreover, Canadian Internet services hoping to attract U.S. customers may face demands for payments to have their content delivered on the fast track.

Since the NAFTA renegotiations include a chapter on digital trade, Canadian negotiators should be pushing for the inclusion of a strong, enforceable net neutrality provision. In fact, earlier this week, lead Canadian negotiator Steve Verheul told a Commons committee that Canada wants a net neutrality provision included in the digital trade chapter in NAFTA. That would be a good step, particularly if the provision has real teeth.

It should be noted that there is a direct and important connection between net neutrality and privacy.  Canada has long recognized the dangers that would come from active monitoring of telecom and Internet users. Neutrality – whether in our telephone networks or Internet networks –  always included a link to privacy. For example, one of the early net neutrality concerns involved Internet telephony, which offers the prospect of cheaper, secure, encrypted communications. Yet providers saw the service as a competitor, leading to reports of blockages or degrading speeds to render the services less usable. This was true in the U.S. in the Madison River case and true in Canada under some of the early net neutrality complaints. Strong net neutrality rules help ensure that does not happen.

Similarly, the first CRTC net neutrality decision (called Internet traffic management practices) included considerable discussion on carrier practices involving deep packet inspection, which allowed them to examine the type of content running on their networks. The technology raised significant privacy concerns and the CRTC ultimately issued an order that “all primary ISPs, as a condition of providing retail Internet services, not to use for other purposes, personal information collected for the purposes of traffic management and not to disclose such information.”  In other words, the net neutrality rules established additional privacy safeguards resulting from carrier management of their networks.

Net neutrality also has a strong connection to access to information.  Reports this week that Bell plans to ask the CRTC to create a website blocking agency, which would develop block lists without court review, highlights how carriers may interfere with access to content. In a recent submission to the CRTC, Bell links the need for blocking of unauthorized streaming sites and downloading services with the success of its CraveTV service, arguing that blocking access to those sites would result in hundreds of thousands of new subscribers. That claim is debatable, but the incentives to block content in carrier self-interest, particularly for large, vertically-integrated companies, is very real.

Indeed, one of Canada’s first net neutrality cases involved Telus, which infamously blocked access during a labour dispute to a site called for Voices for Change. Telus maintains that it has not repeated the blocking approach, but the fact that it did so – and believed that it could exercise the power to do so – demonstrates why there is need for clear, legislative safeguards against content blocking.

Yesterday, David Lametti, the Parliamentary Secretary for the Minister of Innovation, Science and Economic Development, told the House of Commons that “net neutrality is the critical issue of our times, much like freedom of the press and freedom of expression that came before it.”

Given the critical role played by the Internet in all walks of life and the exceptional power wielded by carriers, Mr. Lametti is right.

I look forward to your questions.

The post Net Neutrality Briefing: My Appearance Before the Standing Committee on Access to Information, Privacy and Ethics appeared first on Michael Geist.

Supreme Court of Canada Rules Text Messages May Attract Reasonable Expectation of Privacy

Michael Geist Law RSS Feed - Fri, 2017/12/08 - 12:42

The Supreme Court of Canada has issued a landmark decision concluding that text messages may attract a reasonable expectation of privacy even after they have been sent and received. The case recognizes the importance of electronic communications and the privacy implications of electronic messaging, establishing a standard that is likely to have a significant impact on investigations across the country. Further, the court’s emphasis on a functional approach to privacy in the digital world could have implications that extend well beyond conventional text messaging. The court was divided on the issue: four judges comprised the majority (written by Chief Justice McLachlin), Justice Rowe concurred, and Justice Moldaver wrote a dissent (joined by Justice Cote). The court also released a second decision today involving text messaging which examined the intercept provisions that will be the subject of a future post.

The heart of the case was characterized by the majority in the very first paragraph:

Can Canadians ever reasonably expect the text messages they send to remain private, even after the messages have reached their destination? Or is the state free, regardless of the circumstances, to access text messages from a recipient’s device without a warrant? The question in this appeal is whether the guarantee against unreasonable search and seizure in s. 8  of the Canadian Charter of Rights and Freedoms  can ever apply to such messages.

The answer from the majority is yes: there can be a reasonable expectation of privacy in text messages even after they have been sent and received.

The case involved text messages involving illegal transactions in firearms. Police obtained a warrant to search the homes of the two individuals involved in the case, seizing their phones and accessing incriminating text messages. The lower court ruled that one of the warrants was invalid and that the messages obtained from the phone in that house could not be used as evidence. However, the messages were also recovered from the phone of the other individual and the judge in the case ruled that there was no expectation of privacy regarding the messages on that phone. In other words, the messages from the sender’s phone could not be used as evidence, but the same messages found on the recipient’s phone were fair game.

The majority of the Supreme Court disagreed, concluding that text message conversations can attract a reasonable expectation of privacy (though it will not always do so). The court importantly states that the subject matter of the search must be viewed functionally: the police were interested in the text message conversation, not the physical phone:

The subject matter of the search at issue was not Mr. Winchester’s iPhone, from which the text messages in this case were recovered. Neither the iPhone itself nor its contents generally is what the police were really after. The subject matter must, therefore, be defined more precisely.

Correctly characterized, the subject matter of the search was Mr. Marakah’s “electronic conversation” with Mr. Winchester. To describe text messages as part of an electronic conversation is to take a holistic view of the subject matter of the search. This properly avoids a mechanical approach that defines the subject matter in terms of physical acts, spaces, or modalities of transmission. It also reflects the technological reality of text messaging.

The subject matter of the search was therefore the conversation, not the components such as the physical phone or servers that might store the texts. In fact, the court suggests that the subject matter extends to “the existence of the conversation, the identities of the participants, the information shared, and any inferences about associations and activities that can be drawn from that information.”

The court then moves onto the question of reasonable expectation of privacy. There is no question that the defendant expected the recipient of the messages to keep them private. However, was that expectation reasonable?  The court considers three factors: the place of the search, the private nature of the subject matter, and control over the subject matter.

With respect to place of the search, the court notes that electronic communications do not fit neatly into the non-digital context. It considers the possibility that the electronic conversation do not occupy a physical place, recognizing that we often speak of “private chat rooms” between individuals. Further, there is a spectrum of places from content on my own phone (high) to someone else’s phone (lower) to public display (none). This discussion on the lack of a physical place for electronic communications could have implications well beyond text messaging.

The court adopts a broad approach with respect to the private nature of the subject matter, reasoning that individuals may have a privacy interest in the fact of their communication:

The personal nature of the information that can be derived from text messages is linked to the private nature of texting. People may be inclined to discuss personal matters in electronic conversations precisely because they understand that they are private. The receipt of the information is confined to the people to whom the text message is sent. Service providers are contracted to confidentiality. Apart from possible police interception — which cannot be considered for the purpose of determining a reasonable expectation of privacy— no one else knows about the message or its contents. Indeed, it is difficult to think of a type of conversation or communication that is capable of promising more privacy than text messaging. There is no more discreet form of correspondence. Participants need not be in the same physical place; in fact, they almost never are.

Given their privacy import, that court states:

Electronic conversations, in sum, are capable of revealing a great deal of personal information. Preservation of a “zone of privacy” in which personal information is safe from state intrusion is the very purpose of s. 8  of the Charter. As the foregoing examples illustrate, this zone of privacy extends beyond one’s own mobile device; it can include the electronic conversations in which one shares private information with others. It is reasonable to expect these private interactions — and not just the contents of a particular cell phone at a particular point in time — to remain private.

The most notable aspect of the analysis turns on control. The Crown argued that once we lose control over the message – it is received by another party who has the capability of disclosing it to third parties – we lose a reasonable expectation of privacy with the message. The majority disagreed:

a person does not lose control of information for the purposes of s. 8 simply because another person possesses it or can access it. Even where “technological reality” deprives an individual of exclusive control over his or her personal information, he or she may yet reasonably expect that information to remain safe from state scrutiny.

This aspect of the decision could be hugely important for other information communicated on electronic networks, where there may be some loss of control but the sender still had some expectation that the information would remain private.

Finally, the majority of the court also considered the public policy implications of the decision, including whether this ruling would disrupt the balance between law enforcement and privacy (as argued by the dissent). Its view:

There is nothing in the record to suggest that the justice system cannot adapt to the challenges of recognizing that some text message conversations may engage s. 8  of the Charter . Nor is it disputed that, where scrutiny of an electronic conversation is concerned, the state’s interest in effective law enforcement is outweighed by “the societal interests in protecting individual dignity, integrity and autonomy”. Whatever law enforcement’s interest in enjoying unfettered access to individuals’ text messages, privacy in electronic conversations is worthy of constitutional protection. That protection should not be lightly denied.

In light of this analysis, the majority concludes that there was a reasonable expectation of privacy in the text messages and it excludes the evidence from the case.

The dissenting opinion written by Justice Moldaver is particularly concerned with the policy implications of the decision, warning of serious, negative consequences:

From the standpoint of policy, granting Mr. Marakah standing in these circumstances would vastly expand the scope of persons who can bring a s. 8  challenge. The Chief Justice, speaking for a majority of the Court, adopts an approach to s. 8  that has no ascertainable bounds and threatens a sweeping expansion of s. 8  standing. This carries with it a host of foreseeable consequences that will add to the complexity and length of criminal trial proceedings and place even greater strains on a criminal justice system that is already overburdened. Worse yet, expanding the scope of persons who can bring a s. 8  challenge risks disrupting the delicate balance that s. 8  strives to achieve between privacy and law enforcement interests, particularly in respect of offences that target the most vulnerable members of our society, including children, the elderly, and people with mental disabilities.

Both the majority and dissent recognize the significance of this decision. In a world where electronic communications is increasingly important, the privacy rights attached to those conversations is of enormous importance. Justice Rowe’s concurrence notes that “digital communication inherently limits the control we have over the messages we send, as it inevitably creates a record that is beyond our control.” The Supreme Court of Canada today acknowledged that reality and adopted an approach that ensures that there may still be some privacy even where we lose some control over the communication.

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Canada’s Lead Negotiator Confirms Government Seeking Net Neutrality Safeguards in NAFTA

Michael Geist Law RSS Feed - Thu, 2017/12/07 - 11:07

Steve Verheul, Canada’s lead NAFTA negotiator, appeared before the Standing Committee on International Trade earlier this week to provide an update on the negotiations. In addition to confirming Canada’s commitment to a cultural exception (Verheul acknowledged that the U.S. “has not reacted positively”), Verheul was asked about the digital trade chapter. He indicated that there has been significant progress on issues such as online consumer protection and privacy.  He also touched on two other issues: one a Canadian ask and the other a U.S. priority.

From a Canadian perspective, Verheul said that Canada wants a net neutrality provision included in NAFTA, noting:

We are including provisions such as online consumer protection to ensure that that is provided for and we also have provisions to provide personal information protection, which we feel is essential in this kind of trade, along with our position that we want to protect net neutrality when it comes to digital trade.

As I wrote last month, there is a need to address net neutrality in NAFTA since the U.S. decision to roll back protections could have a negative impact on Canadian businesses operating in the U.S. The NAFTA digital trade chapter is the ideal place for a net neutrality provision, though the rule should be stronger than the lightweight provision that was included in the TPP.  This issue garnered particular attention during my appearance this week on net neutrality before the ETHI committee with MPs expressing interest (and some pessimism) about the likelihood of success.

While Canada is seeking NAFTA net neutrality protections, the U.S. is focused on establishing safe harbour protections for Internet intermediaries. Verheul indicated that the two countries disagree on the issue for the moment:

One of the outstanding issues remains a proposal put forward by the U.S. with respect to providing a safe harbour for Internet computer service providers. In Canada, we do not have that kind of protection from civil liability for those providers and we think that’s a domestic policy issue; that’s an issue for the courts rather than an issue for trade agreements. That’s one of the differences we have with the U.S. at this point in time.

I also recently wrote about the safe harbour issue, arguing that Canada would benefit from establishing a provision that maintains the need for responsible stewardship of online providers without overbroad monitoring or unwarranted takedowns.

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Not Just Bell: Shaw Calls on CRTC To Support Website Blocking

Michael Geist Law RSS Feed - Wed, 2017/12/06 - 12:45

As Bell develops plans to apply to the CRTC to create a website blocking agency, it is also working to create a coalition of supportive companies. The initial Canadaland report noted that the coalition could include Rogers, Cineplex, and Cinema Guzzo. Rogers has since indicated that it is still considering whether to join the coalition. As I note in my post today on the submissions to the CRTC’s consultation on broadcasting, Shaw is now also making the case for website blocking, devoting several pages to supporting it. Unlike Bell, however, it does not reference a specific agency mandated to support blocking, focusing instead on court-ordered blocking.

The Shaw submission seeks to equate access to grey market satellite services with unauthorized streaming services. It acknowledges that Canadian copyright law already addresses Internet piracy and that court orders can be obtained to shut down services that violate the law. It argues, however, that even with a court order, the CRTC must still approve website blocking. Unlike Bell, which envisions a website blocking system without court review, Shaw is focused on granting approvals for blocking with court oversight:

Shaw submits that the CRTC should consider using its authority under section 36 to approve court orders for ISPs to block access to online services infringing Canadian copyright law. While the Telecommunications Act’s objectives articulated in section 7 do not refer directly to the promotion or protection of a Canadian rights market, there is a clear case that blocking access to illegal streaming services responds to the “economic and social requirements of user of telecommunication services”, in furtherance of paragraph 7(e).

It will be interesting to see if Shaw joins Bell’s coalition, since its support of website blocking appears contingent on a court order.

As the carriers line up in support of some form of website blocking, the issue is already sparking a political backlash. Yesterday in the House of Commons, Conservative MP Matt Jeneroux raised the issue during Question Period:

Mr. Matt Jeneroux (Edmonton Riverbend, CPC): Mr. Speaker, Bell and several other media conglomerates have announced a proposal to create a mandatory blocking system for websites that they have arbitrarily determined are inappropriate. However, the blocking process would take place with little to no oversight by our courts. This plan has Internet and net-neutrality experts concerned. Will the government let these multi-billion dollar companies control Canadians’ Internet access?

Mr. David Lametti (Parliamentary Secretary to the Minister of Innovation, Science and Economic Development, Lib.): Mr. Speaker, as our minister has made very clear, we support the principle of net neutrality, where Canadians have access to the content of their choice in accordance with Canadian laws. I can assure my hon. colleague and friend that net neutrality is the critical issue of our times, much like freedom of the press and freedom of expression that came before it. That is why our government will continue to support a strong net-neutrality framework through the CRTC.

While it is encouraging that the government is defending net neutrality, the prospect of website blocking extends beyond just the issues of net neutrality into freedom of expression and other fundamental rights. With the carriers apparently lining up to support blocking, this is shaping up to be one of the defining digital rights issues of the coming year.

The post Not Just Bell: Shaw Calls on CRTC To Support Website Blocking appeared first on Michael Geist.

Digital Cancon, the Sequel: CRTC Broadcast Consult Sparks Demands for Everything from Internet and iPod Taxes to Website Blocking to Abandoning Net Neutrality

Michael Geist Law RSS Feed - Wed, 2017/12/06 - 10:49

Canadians could be forgiven for thinking that the policies associated Cancon in a digital world largely wrapped up with the release of the government’s policy in September. Canadian Heritage Minister Melanie Joly spent months crisscrossing the country, meeting with hundreds of stakeholders, and ultimately delivering a high profile policy that featured the much-debated Netflix commitment alongside various plans to support the sector. While Joly also promised reviews of the Broadcasting Act, Telecommunications Act, and Copyright Act, she puzzlingly re-opened the very issue she had just decided by issuing an Order-in-Council to the CRTC to examine (yet again) policies associated with broadcasting.

As a result, Joly restarted the same policy fight over everything from ISP taxes to net neutrality. The first stage of the CRTC’s consultation into the issue (it is charged with reporting back to cabinet by June 2018) has yielded nearly 300 submissions, many of which envision extensive Internet regulation and taxation. I provided a submission to the consultation, which will be the subject of a blog post later this week. My full submission, which focuses on maintaining net neutrality and rejecting new taxes and fees, can be found here.

While there is much to digest, a quick scan of many of the submissions reveals that the usual suspects are seeking the same rejected remedies raised in the just concluded consultation: ISP taxes, Netflix taxes, iPod taxes, and killing net neutrality. In fact, the submissions add new taxes to the discussion such as a Spotify tax, data sharing of viewer data across the industry, and the creation of a website blocking agency.

For example, the CBC veers strongly toward increased regulation. It is one of many that wants ISP or Internet taxes, including payments from both broadband and wireless providers to support Cancon:

both Internet Service Providers (ISPs) and wireless carriers should be required to contribute to the support of Canadian content since they provide access to programming through their services and profit significantly from the ongoing popularity of programming over both landline and wireless networks.

The CBC is joined by many other groups: ACTRA wants mandated contributions and the creation of a new licensing regime, CMPA supports contributions from broadband and wireless carriers, and Rogers wants Netflix to spend 30 percent of its gross revenues in Canada to finance Canadian productions.

The CBC also wants widespread data sharing of viewer data, noting the mounting importance of data analytics. Its submission calls for a new regulatory regime to mandate sharing of viewer data:

the regulatory regime should ensure that such data is readily available on a non-discriminatory basis. In particular, data about Canadians and their programming preferences should not become the exclusive property of a select group of players. This data should be available to all players so as to benefit the system as a whole.

The Canadian music industry also focuses on data, with the Canadian Independent Music Association demanding that the CRTC or government to impose regulations on the algorithms used by online music services, presumably in support of Canadian music:

Imposing obligations on online music services for the development of local products, including algorithms.

The music industry also wants the expansion of the private copying levy, once described as an iPod tax. The resurgence of the private copying levy would presumably be applied to wireless devices, computers, and anything else that plays music. ADISQ, supported in a separate submission by CIMA, call for the restoration of the private copying levy:

la révision de la loi sur le droit d’auteur, incluant la restauration du régime de copie privée et la disparition de certaines exceptions anachroniques visant les radios

The music industry also supports increased regulation of online music services, with ADISQ seeking a Spotify tax. It argues that online music services are the equivalent of radio stations and should be required to make similar contributions.

Bell wants some of the regulations it faces removed or scaled back, but it also foreshadows its forthcoming application for the creation of a radical website blocking system to be overseen by the CRTC. As part of its argument, it implausibly argues that the company has lost out on as many as 350,000 new subscribers to CraveTV, citing downloads of its show LetterKenny (apparently claiming that roughly 1 in 3 downloads would result in a full paying subscription). Bell is joined by Shaw, which devoting several pages to support for website blocking based on court orders.

The Canadian Association of Broadcasters is concerned with the growing use of smartphones and connected devices that may not include access to radio stations. The proposed solution:

The Government and CRTC should also consider ways to ensure radio’s presence on smart phones, connected devices and in cars sold in Canada.

It offers no advice on how to do that (but does warn against restrictions on food and beverage advertising).

ACTRA pins some of its hopes on full-scale Internet regulation complete with licensing ISPs, creating an ISP tax, and prioritizing Canadian content in violation of net neutrality rules. The ACTRA submission states:

Since the Internet is increasingly being used to watch audiovisual programs and ISPs are the gatekeepers of that content, they should be required to contribute to the creation and distribution of Canadian programming content. Accordingly, Internet Service Providers should make a financial contribution to Canadian content programs proportionate to the extent to which consumers are obtaining programming content through their ISP. Internet Service Providers should also provide priority access to Canadian programming.

The ACTRA approach is supported by Friends of Canadian Broadcasting, which wants the CRTC to mandate prioritization of Canadian content on the Internet, including measures such as zero rating, which would presumably require the government to order wireless carriers to eliminate data charges for Cancon.

Topping it off are many, many calls for the elimination of the CRTC’s digital media exemption (which ACTRA calls “one of the most short-sighted decisions in regulatory history” and which would result increased CRTC regulation of online services) and the introduction of Netflix taxes, which the government has consistently said it does not support.

None of this is particularly surprising, but it re-affirms that the Canadian cultural industry views the digital world not for its potential commercial and creative opportunities, but rather for the prospect of new taxation and regulation. Joly may be encouraging the industry to adopt a forward-looking, export oriented approach, but many would prefer protectionist measures, the regulation and taxation of any Internet service, and the creation of preferential treatment requirements for Canadian content in violation of net neutrality rules. All of this was avoidable.  However, Joly’s decision to send the culture issue back to the CRTC has now guaranteed months of lobbying on the very issues that the government was supposed to have concluded with an 18-month nationwide consultation and “final” report on which the ink is barely dry.

The post Digital Cancon, the Sequel: CRTC Broadcast Consult Sparks Demands for Everything from Internet and iPod Taxes to Website Blocking to Abandoning Net Neutrality appeared first on Michael Geist.

Bell’s Latest Privacy Solution: Enhance Internet Privacy By Blocking Access to It

Michael Geist Law RSS Feed - Tue, 2017/12/05 - 10:37

The Canadaland report on Bell’s plans to apply to the CRTC to create a website blocking agency unsurprisingly sparked immediate widespread concern. I provided further detail on the proposal, noting the danger of establishing a blocking system without court review of the block list and the very weak case Bell makes to justify it. A critical aspect of the Bell proposal is that it must convince the CRTC that website blocking would further Canada’s telecommunications policy objectives. Given that the CRTC has already ruled that the law prohibits blocking without its approval, that is a difficult standard to meet. I argue that the three justifications raised by Bell – 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” – is very weak.

In fact, the privacy argument is not only weak, it is incredibly hypocritical. Bell is arguably the worst major Canadian telecom company on user privacy and its attempt to justify website blocking on the grounds that it wants to protect privacy is shameful. There are obviously far better ways of protecting user privacy from risks on the Internet than blocking access to sites that might create those risks. Further, with literally millions of sites that pose some privacy risk, few would argue that the solution lies in blocking all of them.

Yet Bell in particular is in no position to make this argument. Years after competitors such as Rogers and Telus released telecom transparency reports that disclose the frequency of subscriber information disclosures to law enforcement, Bell has still refused to release such a report, keeping millions of Canadians in the dark on the issue. Bell’s approach to “targeted advertising” also demonstrates how little regard it has for customer privacy. The company changed its privacy policy in 2013 to allow for expanded usage of subscriber data on everything from website visits to TV viewing habits. That led to its targeted ad program, in which it automatically enrolled millions of subscribers unless they proactively opted-out. When the Privacy Commissioner of Canada found that the program violated the law, Bell simply refused to comply:

we remain of the view that Bell cannot rely on the opt-out consent of its customers in order to implement the RAP. Both the sensitivity of the information at issue and the reasonable expectations analysis lead us to the conclusion that such consent is not appropriate in the circumstances. In our preliminary report, we recommended that Bell provide its customers with the opportunity to make an express opt-in choice regarding whether or not they consent to Bell’s use of their personal information for the RAP. Bell refused to comply with our recommendation. [emphasis added]

Bell later backed down, but its privacy challenges have not disappeared with a 2013 lawsuit that awarded thousands of dollars to a subscriber for a privacy violation as well as recent reports that it has hijacked browser sessions from customers that have asked to cancel services. The Privacy Commissioner is currently investigating the practice.

Bell’s radical website blocking plan is terrible policy for many reasons, but the claims that it can be justified on privacy grounds represent a new low for a company that has seemingly seen little value in prioritizing the privacy interests of its customers.

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Keynote Speaking – 2017-18

Michael Geist Law RSS Feed - Tue, 2017/12/05 - 04:46

I regularly speak at a wide range of conferences and events on issues related to technology, the Internet, law and policy. Recent keynote addresses have focused on privacy, social media, copyright, education, security, and the free speech on the Internet. All talks are customized to the audience with materials and video that can be distributed to attendees or posted online.

The video section of this site features links to many talks posted online. To discuss an event and potential speaking opportunities, contact me directly.

Current topics include:

1. Using Law Responsibly: What Happens When Law Meets Technology?

The law has long struggled to keep pace with the rapid change that comes with the Internet and new technologies. From the cross-border challenges posed by a global network to the privacy implications of big data, law and policy simply cannot move at “Internet speed.” Yet despite the difficulties, politicians and policy makers increasingly find themselves at the heart of emerging policy issues, asked to address the balance between privacy and surveillance, the competing copyright interests of creators and users, and the market structure for network providers and disruptive competitors. This keynote talk will explore the emerging law and policy challenges, highlighting how all Internet users have the opportunity to help shape the digital policy landscape.

2. The Dynamic Environment for Digital Privacy in Canada

As the public becomes increasingly reliant upon digital networks for everything from basic communication to commerce to culture, the privacy implications of the network become increasingly challenging. Big data cross-border transfers, algorithmic transparency, surveillance fears, security breaches, and data mining attract daily headlines as we struggle to identify an appropriate balance between leveraging data for new and innovative activities with the privacy risks associated with use and misuse of our personal information. Can real privacy exist in today’s networked world? This keynote will examine the dynamic environment for digital privacy in Canada, highlighting emerging policy challenges, ever-changing technologies, and the effort to craft online tools and services that offer both privacy and security.

3. Digital Trade: The Future of Canadian Trade Deals from NAFTA to the TPP

The intellectual property and new digital trade chapters of NAFTA are emerging as among the most contentious aspects of its renegotiation.  For decades, consumers, advocates and technology companies have been stuck in a defensive posture, criticizing more restrictive trade provisions and efforts to impose domestic reforms through trade negotiations. In recent years, however, these groups have been increasingly effective at promoting a positive agenda, including obligations to promote copyright “balance” and protect user rights that underpin the Internet ecosystem. This keynote will assess the Canadian opportunities in a global digital environment, examining the IP and digital trade rules emerging from global trade agreements such as NAFTA and the TPP.

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Bell Leads on Radical Proposal for CRTC-Backed Mandatory Website Blocking System

Michael Geist Law RSS Feed - Mon, 2017/12/04 - 15:41

Canadaland reports today that Bell is leading a coalition that plans to file a proposal with the CRTC that would lead to the creation a mandatory website blocking system in Canada. The unprecedented proposal, which includes the creation of a new “Internet Piracy Review Agency”, envisions the creation of mandatory block lists without judicial review to be enforced by the CRTC. As a result, the companies (reportedly including Rogers and Cineplex) envision sweeping new Internet regulations with the CRTC ultimately charged with enforcing site blocking by every Internet provider in Canada. I reviewed the proposal in order to provide comments to the Canadaland.

Bell’s support for a website blocking system does not come as a surprise given that it raised the possibility at the House of Commons Standing Committee on International Trade in September and has increasingly sided with the content industry. The inclusion of Rogers on the list of supporters is consistent with recent comments at an industry conference in Ottawa despite the company earlier distancing itself in September from the Bell proposal.

As the Canadaland report notes, the Bell proposal maintains that site blocking can be established in Canada without the need for further copyright reform (notable since the government is set to launch a review of the Copyright Act in the coming weeks) by instead relying on the Telecommunications Act, which is itself slated for a review. Canada already has some of the toughest anti-piracy laws in the world with unique “enabler” provision that makes it easy for rights holder to target Canadian-based sites that are perceived to facilitate piracy. Moreover, industry data suggests that Canada has lower rates of piracy than many other countries. For example, Music Canada recently reported that Canada is well below global averages in downloading music from unauthorized sites or stream ripping from sites such as YouTube.

Yet the telecom and cable giants maintain that a new system designed to block foreign-based sites is still needed. This despite the fact that there is now the possibility of Equustek global takedown orders from the Canadian Supreme Court, which provides an obvious alternative that does not involve blocking. Perhaps most notable about the proposal is that there is no court oversight in the creation of the mandatory block list. The plan is to create a new not-for-profit organization (IRPA) similar in structure to the CCTS, which would be responsible for identifying sites to block. The organization’s board would include representatives of rights holders, broadcasters, ISPs, and consumer groups. There is no reference to independent voices or free speech or civil liberties groups. The IRPA would establish the list of sites to block to be submitted to the CRTC. The CRTC would then order all ISPs to block access to the sites under sections 24 and 24.1 of the Telecommunications Act.

The proposal claims that the blocking would only cover sites that “blatantly, overwhelmingly or structurally” engage in infringing or enabling or facilitating the infringing of copyright. Yet recent history suggests that the list will quickly grow to cover tougher judgment calls. For example, Bell has targeted TVAddons, a site that contains considerable non-infringing content. It can be expected that many other sites disliked by rights holders or broadcasters would find their way onto the block list.

Moreover, the creation of a blocking system will invariably lead to demands that it expand to other areas. Whether fake news, hate speech or unlicensed content, if blocking websites without even court oversight is viewed as fair game, the CRTC will face a steady stream of demands for more. For example, consider Bell’s potential response to the availability of streaming content from U.S. services without a Canadian licence or the reaction to the removal of simultaneous substitution and its argument that unlicensed content should be blocked. The TPP included a specific provision stopping Canada from restricting access to foreign audio-visual content precisely due to concerns that broadcasters and BDUs might want to lessen competition by blocking access to foreign services.

The good news is that legal basis for this radical proposal is on very shaky ground. The CRTC was clear in September 2016 letter arising out of the Quebec law mandating the blocking of access to unlicensed gambling sites. The CRTC stated that the law only permits blocking in “exceptional circumstances” noting that:

the Commission is of the preliminary view that the Act prohibits the blocking by Canadian carriers of access by end-users to specific websites on the Internet, whether or not this blocking is the result of an ITMP. Consequently, any such blocking is unlawful without prior Commission approval, which would only be given where it would further the telecommunications policy objectives. Accordingly, compliance with other legal or juridical requirements – whether municipal, provincial or foreign – does not in and of itself justify the blocking of specific websites by Canadian carriers, in the absence of Commission approval under the Act.

The proposal must therefore convince the CRTC that website blocking would further the telecommunications policy objectives (merely complying with copyright law or meeting broader cultural objectives would be insufficient). The proposal does a woefully poor job of making the case that mandatory website blocking would further those objectives. The best it can do is argue 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 case is very weak on all counts. The data on piracy is decidedly mixed. The carriers try to make the case that piracy is responsible for cord cutting, but the popularity of authorized services such as Netflix and the far better value associated with the services surely has much more to do with it. In fact, a recent report released by the Canada Media Fund noted the sharp decline in piracy, the fast growth of music industry, and the near-complete elimination of BitTorrent as a major source of network traffic (just under 2% of peak network traffic is BitTorrent compared to 35% for Netflix).   Moreover, many studies suggest that Canada has lower rates of piracy and that the overwhelming majority of Canadians do not use tools to access unauthorized streams (a Sandvine study found that only 7% have done so). The proposal also cites a Circum study conducted for Canadian Heritage on piracy, but that study found that the majority of rights holders were not focused on the issue.

The arguments around encouraging compliance with the law is even weaker as the Commission has already stated that compliance with other legal or juridical requirements does not justify site blocking. Most head-scratching is the claim that this will protect user privacy, particularly since it comes from a company (Bell) that is the only major provider without a transparency report and it refused to comply with the Privacy Commissioner of Canada’s ruling on its privacy-invasive ad-tracking program when it was first issued. It takes a special kind of hypocrisy to argue that the way to protect user privacy is simply to block access to many Internet sites.

What the proposal does not acknowledge is that there would be obvious Charter of Rights and Freedoms concerns with a proposal that avoids judicial oversight in creating a block list, is not used by the U.S. (which has the most at stake from a content perspective and which has specifically warned against blocking in the TPP), and that it is inconsistent with rules found elsewhere that at least incorporate judicial review. The government rightly seems dismissive of the proposal in the Canadaland report but as leading Internet providers, Bell and Rogers should be ashamed for leading the charge on such a dangerous, anti-speech and anti-consumer proposal.

The post Bell Leads on Radical Proposal for CRTC-Backed Mandatory Website Blocking System appeared first on Michael Geist.

Canada’s Missing Internet Provision: Why NAFTA Offers the Chance to Establish Long Overdue Online Speech Safeguards

Michael Geist Law RSS Feed - Fri, 2017/12/01 - 10:03

During the earliest days of the commercial Internet, the United States enacted the Communications Decency Act, legislation designed to address two concerns with the rapidly growing online world: the availability of obscene materials and the liability of Internet services hosting third party content. While the obscenity provisions in the 1996 law were quickly struck down as unconstitutional by the U.S. Supreme Court, the liability rules emerged as a cornerstone of U.S. Internet policy.

The rules, which many regard as the single most important legal protection for free speech on the Internet, establish a safe harbour that ensures online services are not liable for the content posted by their users. My Globe and Mail op-ed notes that over the past two decades, the CDA Section 203(c) provision has been used by every major Internet service – from Google to Amazon to Airbnb – to ensure that courts, not private companies, determine what is lawful and permitted to remain online.

By creating a legal safe harbour for non-copyright third party content (copyright law establishes an alternative system for addressing claims of infringement and the liability clearly applies to original content created by an online service), thousands of Internet sites and services have been able to err on the side of free speech without active monitoring of posts or takedowns based on unproven claims.

The rules can be controversial, particularly at a time when policy makers and the public are demanding greater vigilance from online providers in countering disinformation campaigns, cyber-bullying, and hate online. Yet there is room to strike a balance to ensure that illegal content is swiftly identified and taken down, while avoiding the risks that would come with active monitoring of content posted by billions of users by Internet giants.

Unlike the U.S., Canada does not have equivalent online legal protections for third party content. In practice, that has meant the same companies that require court orders prior to the removal of content for claims originating in the U.S., may take down lawful content in Canada based on mere unproven allegations due to fears of legal liability. Moreover, the absence of safe harbour protections has proven to be a significant disincentive for both new and established services to use Canada to store data or maintain a local presence.

The absence of Canadian safe harbour rules took on heightened importance this year with the Supreme Court of Canada’s Equustek ruling, in which it concluded that a Canadian court could issue a global takedown order requiring Google to remove results from its search index for users worldwide. A U.S. court recently issued an injunction blocking enforcement of the Canadian order, noting that it “threatens free speech on the global Internet” by effectively overriding U.S. safe harbour protections.

The inconsistency between U.S. and Canadian law in this area appears to have led the U.S. government to amend its list of negotiating objectives for the NAFTA digital trade chapter. Earlier this month, the U.S. released its updated list of objectives, quietly adding “establish rules that limit non-IPR [intellectual property rights] civil liability of online platforms for third party content, subject to NAFTA countries’ rights to adopt non-discriminatory measures for legitimate public policy objectives.”

The change may have been motivated by U.S. concerns of Canadian overreach in the online environment, but the benefits of a well-crafted provision would be significant for the Canadian digital economy. The U.S. proposal features ample room for Canada to craft rules that maintain the need for responsible stewardship of online providers without overbroad monitoring or unwarranted takedowns.

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.

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NAFTA and the Digital Environment: My CIGI Global Forum Lecture

Michael Geist Law RSS Feed - Wed, 2017/11/29 - 15:33

Last week I delivered the CIGI Global Forum lecture in Ottawa on NAFTA and the Digital Environment. The lecture draws on some of my work for CIGI (NAFTA, Innovation) and makes the case that NAFTA negotiations are a problematic place for digital copyright reform, noting the lack of transparency, lost flexibility, and inability to strike a critical policy balance. Given that the issues are seemingly unavoidable in NAFTA, the lecture then highlights the preferred approach (relying on international treaty standards) and identifies many of the most important issues up for discussion including copyright term, fair dealing, intermediary liability and digital issues such as net neutrality and data localization. A video of the talk is embedded below.

 

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Why Abandoning Net Neutrality in the U.S. Matters in Canada

Michael Geist Law RSS Feed - Sat, 2017/11/25 - 13:12

Earlier this week I appeared on CBC’s On the Money to discuss the U.S. decision to abandon net neutrality and its implications for Canada. I’ve written about these issues in columns and posts, but this interview provided the opportunity to highlight the implications for Canadian business and consumers, the prospect of including net neutrality in future Telecommunications Act reforms, the connection to NAFTA, and the ongoing concerns with telecom competitiveness in Canada. The interview is embedded below.

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Net Neutrality Divide: Canada and the U.S. Go Separate Ways on an Open Internet

Michael Geist Law RSS Feed - Thu, 2017/11/23 - 15:09

This week’s announcement that the U.S. telecommunications regulator plans to roll back net-neutrality regulations sparked an immediate backlash from those who fear that the decision will turn the Internet into a cable-like service dominated by the carriers and deep-pocketed giants that can afford to pay new fees to keep their content on the fast lane.

My Globe and Mail op-ed notes that the U.S. order, which would also block states from carrying out their own versions of policies that stop telecom carriers from leveraging their gatekeeper status by treating similar content or applications differently, is set for a vote next month.

Abandoning net neutrality will have an impact in the United States since evidence suggests that, without net neutrality rules, carriers will pick winners by differentiating connectivity based on the willingness of Internet companies, sites and services to pay additional fees. The experience in countries without net neutrality rules bears this out. Some European countries feature pricing plans that look like cable packages with limited access to a select group of websites or Internet services. On the flip side, European data show that providers that rely on neutral services offer better prices and larger data allowances.

From a Canadian consumer perspective, the effect of the U.S. decision will be more indirect. What separates the Canadian net neutrality approach from the U.S. direction is that consumers and creators – not telecom companies or Internet service providers (ISPs) – are in control when it comes to Internet usage.

Unlike the United States, Canada has emerged as a world leader in supporting net neutrality with clear endorsements from both political leaders and the Canadian Radio-television and Telecommunications Commission. Navdeep Bains, the federal Minister of Innovation, Science and Economic Development, responded to the U.S. developments by affirming that “Canada will continue to stand for diversity and freedom of expression. Our government remains committed to the principles of net neutrality.”

Canadian Heritage Minister Mélanie Joly has similarly emerged as a notable proponent of net neutrality. Despite pressure from some cultural groups to abandon net neutrality by mandating preferential treatment of Canadian content, Ms. Joly has affirmed that the principle remains at the core of Canadian cultural policy, saying in September that “we will continue to champion the Internet as a progressive force and an open space without barriers. As a government, we stand by the principle of net neutrality.”

The Canadian commitment to net neutrality has been similarly endorsed at the regulatory level. The foundation of Canadian policy lies in several CRTC decisions that restrict practices such as managing Internet traffic to limit speeds for some applications or creating pricing plans that “zero rate” certain content that does not count as part of monthly data-consumption caps. Moreover, Canadian law features clear safeguards against unjust discrimination, undue preferences or controlling the content of communications.

While the change in U.S. administration has led to a dramatic shift in net neutrality policy, the same will not occur in Canada. New CRTC chair Ian Scott told an industry conference earlier this month that “as companies continue to innovate in their offerings to Canadians, the CRTC will continue to ensure that Canada’s Internet neutrality provisions are respected … the owners and operators of the country’s communications may not discriminate against content based on its origin or destination.”

Canadian consumers may be shielded from net neutrality abuses, but the effects of the U.S. decision may still be felt north of the border. Since Canadian Internet traffic often transits through the United States, there are concerns that Canadian data could get caught by non-neutral policies. Moreover, Canadian internet services hoping to attract U.S. customers may face demands for payments to have their content delivered on the fast track. Since the renegotiation of the North American free-trade agreement include a chapter on digital trade, Canadian negotiators should be pushing for the inclusion of a strong, enforceable net neutrality provision.

The United States has been a remarkably innovative country for Internet services with the vast majority of leading companies starting there before venturing abroad. It is striking how those companies – Google, Netflix, Twitter – remain ardent supporters of net neutrality, effectively acknowledging the debt they owe to rules that helped them to become household names around the world. Without U.S. net-neutrality safeguards, the range of choices that ultimately make their way onto the consumer and business landscape may be curtailed, a discouraging development that will affect everyone.

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Music Canada Data Confirms Huge Increase in Streaming Revenues and Sharp Decline of Music Listening from Pirated Sources

Michael Geist Law RSS Feed - Wed, 2017/11/22 - 10:40

Music Canada released a report on the so-called Value Gap last month which serves as the basis for its lobbying campaign for copyright reform in Canada. The industry lobby group has used the value gap rhetoric primarily as an argument to undo safe harbours for Internet intermediaries. As I noted earlier this year, the argument is poor fit in Canada. First, Canada has experienced massive growth of Internet streaming revenues, with the Canadian music market outpacing global competitors by almost any metric and revenues going to both the industry and creators.

Yesterday I posted on SOCAN generating a 10X increase in Internet streaming revenues with growth rates of over 100 per cent over the past year for songwriters, composers, and music publishers. The industry numbers from Music Canada and IFPI tell a similar story. According to industry data, the Canadian music market is growing much faster than the world average (12.8 per cent in 2016 vs. 5.9 per cent 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 of 60.4 per cent, the Canadian digital share of revenues of 63 per cent is far above the global average of 50 per cent, and Canada has leaped past Australia to become the 6th largest music market in the world. In fact, as the chart below indicates, the growth of streaming revenues in Canada since the 2012 copyright reforms has increased significantly year-after-year with growth rates for the industry and collectives mirroring each other.

Canadian Music Streaming Revenues, Source: IFPI Global Music Report 2017, p. 80, referenced at p. 19, https://musiccanada.com//wp-content/uploads/2017/10/The-Value-Gap-Its-Origins-Impacts-and-a-Made-in-Canada-Approach.pdf

 

Second, the U.S. DMCA notice-and-takedown system, which the industry claims is to blame lower royalty rates on YouTube, does not exist in Canadian law. Music Canada wants government intervention into what amounts to a negotiated agreement by increasing potential liability for intermediaries in the hope of extracting better terms and higher royalty rates. However, focusing on Canadian copyright law to do so makes little sense since there is no notice-and-takedown system to amend.

The Value Gap report may fail to make the case for Canadian legislative reform, but it does point to the sharp decline of Canadians who rely on pirated music. The report cites data from an IFPI international report on the listening habits of music consumers around the world. That report provided few details on the situation in Canada, but Music Canada discloses previously unreleased information specifically on Canadian consumers. It reports that Canadians spend 15.4 hours per week listening to music with listening to pirated music only accounting for 6 per cent of that time. A range of authorized and compensated sources, including radio, downloads, and streaming represents the vast majority of music listening habits. In other words, the industry’s data confirms that Canadian consumers show little interest in listening pirated music, preferring many other sources that contribute to its fast growing revenues.

Music Canada, The Value Gap and Its Origins, Impacts, and a Made in Canada Approach, Page 22, https://musiccanada.com//wp-content/uploads/2017/10/The-Value-Gap-Its-Origins-Impacts-and-a-Made-in-Canada-Approach.pdf

 

Moreover, the same report found that Canada is well below global averages in downloading music from unauthorized sites or stream ripping from sites such as YouTube. Indeed, after years of implausibly claiming that Canadians were among the most active infringers, Music Canada now points to survey data that places Canada far below the global average. Canada is also notably far below the global average when it comes to smartphone use for music (only Japan ranks below Canada), which is likely a function of the high cost of data in Canada.

The so-called value gap will undoubtedly form a big part of the lobbying effort on copyright reform in Canada for the music industry (other sectors, including the publishing industry, have also recently adopted it notwithstanding the significant growth in education licensing spending since 2012). Yet politicians should not be so easily fooled: the industry’s own data points to a major digital success story coming on the heels of the 2012 copyright reforms with a surge in revenues and rapidly declining relevance of pirated music.

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SOCAN Financial Data Highlights How Internet Music Streaming is Paying Off for Creators

Michael Geist Law RSS Feed - Tue, 2017/11/21 - 10:10

Music industry lobby groups may frequently seek to equate the Internet with lost revenues, but an examination of financial data from one of Canada’s largest music copyright collectives demonstrates massive growth in earnings arising from Internet streaming including major services such as Youtube and Apple Music. While many collectives do not publicly disclose their revenues, SOCAN, which represents composers, songwriters, and music publishers, provides a detailed breakdown of revenues and distributions in its annual report.

The reports show that since the 2012 copyright reform in Canada, SOCAN has experienced incredible growth in Internet streaming revenues. The 2013 SOCAN annual report noted that it was the first year that the collective distributed Internet streaming revenues ($3.4 million in revenue), which coincided 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. Tracking the growth of revenues through the annual reports for 2014 ($12.4 million), 2015 ($15.5 million) and 2016 ($33.8 million), Internet streaming revenue is now SOCAN’s fastest growing revenue source having overtaken cinema, private copying, and satellite radio revenues and likely to surpass concert revenues in the coming year.

 

SOCAN Internet Streaming Revenues Source: SOCAN Annual Reports 2013, 2014, 2015, 2016

 

SOCAN is just one music copyright collective and there are others that seek royalties for other participants in the music creation process. Indeed, the debate over Internet music streaming revenues is complex with many rights holders vying for revenues in a fast-growing segment of the market. Yet despite attempts to paint the Internet as a source of disappearing revenues for creators, the publicly-availability data tells a different story.

In the case of songwriters, composers, and music publishers, the data unmistakable: in the aftermath of the 2012 copyright reforms, SOCAN has generated a 10X increase in Internet streaming revenues with growth rates of over 100 per cent over the past year alone. That isn’t a value gap. It is enormous economic value being generated for the benefit of creators and those that invest in them under current Canadian copyright rules.

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Closed by Default: Why is Prime Minister Trudeau Using Restrictive Terms for Flickr Image Use?

Michael Geist Law RSS Feed - Fri, 2017/11/17 - 10:29

Yesterday’s post on the Canada, the TPP and intellectual property raised a concern unrelated to the content of the piece. Since updating my site several years ago, I use a Creative Commons licensed or public domain image for virtually every post, celebrating the remarkable creativity of people and organizations from around the world who make their work freely available for anyone to use. In searching for an updated image on the TPP, I encountered a problem that has arisen with increased frequency. Several governments posted relevant images from the meetings in Vietnam and the Philippines, but the Canadian images featured restrictive terms and conditions in the form of an all rights reserved approach.

For example, there are two pictures from the same meeting downloaded from Flickr accompanying this post. The one on the left is from the President of Mexico’s Flickr page and is subject to a Creative Commons licence that permits non-commercial re-use. The picture on the right, taken from Justin Trudeau’s Flickr page, is all rights reserved. While I believe that I can rely on fair dealing and the Copyright Act’s non-commercial user generated content provision to use the picture, the restrictive licensing approach, which has become pervasive within the federal government on Flickr, is out-of-step with the standard of governments around the world and inconsistent with the “open by default” commitment.

The Prime Minister’s web page explicitly states that the works on Flickr are subject to crown copyright with all rights reserved:

Images and videos available through the Prime Minister’s Twitter, Flickr, YouTube and the Prime Minister’s Volunteer Awards Facebook accounts are subject to a Canadian Crown Copyright with all rights reserved, unless otherwise specified. We use Creative Commons Licenses to enable the sharing and use of images and videos in accordance with the terms set out in the specified Creative Commons license.

The problem is that the images on Flickr do not use Creative Commons licences but rather state that they are all rights reserved.

An open licensing approach that permits at least non-commercial use is commonly used by leaders, parliaments, and government departments around the world, with most relying on either a Creative Commons licence or immediately placing the work in the public domain. Examples include the UK Prime Minister, the Prime Minister of India, the Presidents of France, Mexico, and the United States, the European Parliament, the Government of South Korea, Government of Guatemala, the National Assembly for Wales, and Australia’s Department of Foreign Affairs to name just a few. Many of these governments provide public domain licences that allow for use of any kind. In Canada, many provincial government also use more flexible licensing options including the Premier of Alberta, Province of British Columbia, Province of PEI, and Province of Newfoundland and Labrador.

The all rights reserved approach means that foreign and provincial governments (along with international organizations) are now often the primary source for openly licensed pictures of Canadian ministers. Want a picture of Trudeau with UK Prime Minister Theresa May? There are many with open licences from May, but similar pictures on Flickr from Trudeau are all rights reserved. Want a picture of Trudeau at the recent ASEAN or APEC meetings in Vietnam and the Philippines? The White House has a public domain one, but Trudeau’s pictures are again all rights reserved.

The situation is similar for pictures of most cabinet ministers. Pictures of ISED Minister Navdeep Bains from his department’s Flickr page are all rights reserved, but the Province of B.C. has an a Creative Commons licensed one. Finance Minister Bill Morneau’s photos are all rights reserved, but there are Creative Commons licensed images from the IMF and OECD. Canadian Heritage uses all rights reserved for its Flickr pictures (which are oddly focused on British royalty), but B.C. again offers a Creative Commons licensed one for Minister Melanie Joly. Global Affairs no longer seems to post political-related photos, but Foreign Affairs Chrystia Freeland has dozens of photos from other governments, leaders, ministers, and international organizations.

In fact, some Creative Commons licensed images posted to Flickr under the previous Conservative government have been removed altogether. I relied on a Creative Commons licensed images of former Prime Minister Harper from his own Flickr page in a 2015 post but it has since been made private. The same is true for an image of former International Trade Minister Ed Fast in a 2015 post on the TPP.

There are certainly alternatives to relying on Creative Commons licensed or public domain images for websites, educational materials or other uses. Many uses of a single image will qualify as fair dealing, provided they are used with one of the enumerated purposes under the law. Similarly, an original non-commercial work that incorporates other copyrighted works may qualify under the non-commercial user generated content exception. Further, these images may be posted elsewhere, perhaps with less restrictive terms.

Yet today Flickr is the largest online image platform for openly licensed images in the world with 381 million Creative Commons or public domain licensed images. With search functionality that makes it easy to work through millions of images, it is a remarkably useful tool for finding and using openly licensed works without the need for further copyright analysis or permissions. The government should be actively encouraging the use of its images, for which the public has paid through their tax dollars. Indeed, a government committed to open-by-default should not require people to engage in a copyright analysis to determine whether they can use an image of the Prime Minister or government officials. Absent the much-needed elimination of crown copyright, the government should immediately shift to Creative Commons or licences for its images on Flickr.

 

The post Closed by Default: Why is Prime Minister Trudeau Using Restrictive Terms for Flickr Image Use? appeared first on Michael Geist.

Bursting the IP Trade Bubble: Canada’s Position on IP Rules Takes Shape With Suspended TPP Provisions

Michael Geist Law RSS Feed - Thu, 2017/11/16 - 14:29

In the months following the conclusion of the Trans Pacific Partnership, critics pointed to many specific problems in the text with respect to intellectual property, culture, privacy, and dispute resolution. TPP defenders consistently dismissed those concerns, yet last week’s successful Canadian demand to suspend many of the most problematic IP provisions (along with holding out for reforms to the cultural exemption) confirms that the government has recognized the validity of the criticisms. The government may yet cave to U.S. pressure in the NAFTA renegotiation, but it has established a clear position on culture and IP that better reflects the national interest.

For example, as part of my 50 day Trouble with the TPP series, I pointed to a surprising shift in Canadian trade policy with respect to culture. While Canada had long insisted that the cultural industries receive a full exemption, the Conservative government had agreed to important exceptions to that general rule in the TPP.  Buried in Annex II of non-conforming measures were two exceptions to the cultural exception that could be used to block efforts to create mandated Cancon contributions for foreign providers or regulatory restrictions on foreign audio-visual content. Leaving aside whether these would be “good” policy measures, I argued that they did not belong in a trade agreement. While some disagreed (I responded here), the government’s insistence that it will not agree to the CPTPP without addressing the cultural issue validates the concerns, suggesting that policy makers recognize what is obvious from the wording of the text, namely that the TPP would restrict Canadian cultural policy.

The same is true for the TPP copyright and patent provisions. TPP supporters have frequently sought to downplay the significance of copyright term extension, the loss of flexibility on technological protection measures, patent term extension, and fixing the minimum standard for biologics protections. In fact, those provisions extend far beyond international treaty requirements and restrict the ability for countries to tailor their intellectual property laws consistent with those global rules. While the U.S. has been a longstanding proponent of exporting its IP laws, other countries have had strong misgivings about the approach. The Conservatives were willing to cave on these issues during the TPP negotiations, but the Liberal decision to demand suspension of those provisions – which garnered agreement from other TPP countries – demonstrates the quiet opposition to more restrictive copyright and patent rules. Far from being out-of-step with our trading partners, Canadian policy preferences are actually widely shared with many other countries.

The big question is what comes next. On the TPP11 (or CPTPP), the remaining countries have agreed to give everyone an effective veto power with respect to new entrants. Therefore, rather than being used as an incentive to entice the U.S. back into the deal, it may be difficult for the U.S. to convince all remaining countries to unanimously support an end to the suspended provisions. Even if one holds out, the provisions remain suspended.

The TPP11 outcome also confirms – yet again – that there is simply no need for excessively restrictive IP rules in modern trade agreements. The TPP11, the Canada – South Korean trade agreement, and CETA all feature robust IP chapters but do not include provisions such as mandatory copyright term extension beyond international treaty requirements. The NAFTA negotiations, however, will represent a much more difficult challenge as the U.S. is likely to re-assert TPP-style demands in that agreement. Canada may have a tougher time fending off U.S. pressure given the myriad of contentious issues – some reports suggest that IP will be an area to deal if the U.S. compromises on other issues – but its TPP position highlights that politicians and policy makers recognize that extending the term of copyright or patents and limiting future IP and cultural policy flexibility is not in Canada’s national interest.

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Canada Revenue Agency Obtains Broad Court Order for Years of PayPal Data

Michael Geist Law RSS Feed - Tue, 2017/11/14 - 13:46

The Canada Revenue Agency has obtained a federal court order requiring PayPal to hand over years of transactional information from all business accounts in Canada. The scope of the order is incredibly broad, covering any business account holder who sent or received a payment over a nearly four year period from January 1, 2014 to November 10, 2017. The information to be disclosed includes:

  • The full name of every individual or corporation holding a business account that has a Canadian address;
  • The date of birth of each individual holding a business account;
  • The business name, if applicable;
  • The telephone number(s) of the corporation or individual holding the business account, if available;
  • The full address(es) of the corporation or individual holding the business account;
  • The email address of the corporation or individual holding the business account;
  • The Social Insurance Number and/or Business Number of the corporation or individual holding the Business Account, if available.
  • The total number and value of received transactions for each calendar year between January 1, 2014 and November 10, 2017.
  • The total number and value of sent transactions for each calendar year between January 1, 2014 and November 10, 2017.

PayPal has indicated that it must comply with the order within 45 days from November 10th (the date the order was issued). The order will presumably allow CRA to conduct audits of thousands of small businesses that use PayPal for transactions. The issue has arisen in other jurisdictions. For example, the UK has been working on legislation that would allow for the collection of “bulk” information from Internet companies.

The Canadian order indicates that CRA intends to use the information to “combat the underground economy” and that there is no obligation to demonstrate that there is an existing investigation or audit. In fact, there is not even the need to demonstrate that “a genuine and serious inquiry” exists.  The order also reveals that PayPal objected to the breadth of the order.  It states that the court:

“considered the concerns expressed by PayPal with respect to the proposed Unnamed Persons Requirement, namely that the authorization sought by the Minister would interfere with the privacy of PayPal’s clients and that the Unnamed Persons Requirement is overly broad and unreasonable given the absence of any threshold amount for each transaction targeted by the requirement;”

It rejected those arguments, observing that the expectation of privacy with respect to business records is very low.  It also concluded that PayPal had the relevant information and that it did not file evidence that the order was overbroad or reached a disproportionate number of persons.

Ensuring that tax laws are respected is obviously important, yet many of PayPal’s business account records are presumably not similar to those typically found in larger businesses. Indeed, the business account may be often be closer to individual, identifiable records that might carry a higher level of expectation of privacy. PayPal apparently fought against the order, but having lost, will now be required to hand over a massive trove of financial data dating back years to Canada’s tax authorities without a threshold or other limitations.

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Canada’s Billion Dollar Wireless Cash Grab: CRTC Data Shows Overage Fees Now Exceed Roaming Revenues

Michael Geist Law RSS Feed - Tue, 2017/11/14 - 10:41

The CRTC’s release of the 2017 Communications Monitoring Report ushered in the usual conflicting reports on the state of communications services in Canada. I found the most compelling take to be Tefficient’s data charts that show Canadian wireless companies generating revenue per GB that is the highest in the developed economy world (literally off-the-chart) alongside mobile data usage growth rates that are among the slowest on record. The Canadian Wireless Telecommunications Association described the growth rate as “impressive”, but when just about everyone has faster growth rates, it is readily apparent that high wireless costs in Canada have a negative impact on usage.

Digging further into the data, the CRTC provides insight into an oft-overlooked source of revenue for the carriers: overage charges, which represent an ongoing source of frustration for many consumers. While many carriers have unlimited broadband plans, unlimited wireless plans are rare, leaving subscribers to carefully monitor their data usage. Based on the CRTC data, however, many find themselves exceeding their monthly cap fairly regularly as data overage charges constitute 6 per cent of total retail wireless revenues:

In 2016, of companies that reported data overage charges, approximately 6.0% of their total retail mobile revenues were reported to be directly from revenues collected from subscribers who exceeded allowable monthly data limits; the revenues excluded charges for flex-type plans, domestic and international roaming, and text messaging services.

Given that retail wireless revenues exceeded $23 billion, annual overage charges in Canada easily exceed a billion dollars per year. By comparison, wireless long distance revenues generated $547 million and roaming revenues hit $960 million. In other words, Canadian wireless carriers make more money from overage charges than from either long distance fees or roaming costs. In fact, with total data revenues at $11.9 billion, about 1 of every 10 dollars earned from data stems from overage charges. The revenues from overage charges are not limited to wireless services either. The report also notes that Canadian households paid $100 million in broadband Internet overage charges or roughly 1 per cent of residential Internet service provider revenues.

Not only are overage charges a significant source of revenue, but several carriers recently increased them by as much as 40 per cent. For example, this summer Rogers boosted its overage charge on wireless data by 40 per cent and Bell raised it by the same amount over a two year period. Given that a 2016 CRTC survey found that nearly half of consumers pay overage charges, the increases alone are likely to result in hundreds of millions in additional consumer costs.

With a combined total of nearly $1.5 billion in consumer overage charges from retail wireless and broadband services, the costs have a significant impact on affordability. Communications companies have introduced tools to monitor usage and the CRTC wireless code mandates express consent when consumers exceed $50 in data overage charges in a single billing cycle, yet the record suggests that more is needed.

The most obvious solution would be the availability of unlimited wireless data plans, which are commonly found elsewhere. Companies such as Bell and Rogers claim that unlimited plans are not feasible, but the reality is that with limited competition and more than a billion dollars per year in revenue from overage charges, there is little incentive for the companies to tinker with the current system. Absent a more competitive wireless marketplace, Canada seems destined to continue to have some of the slowest usage growth rates as consumers conserve their data use and grapple with plans that result in 1 of every 10 dollars being spent on data going to overage fees.

The post Canada’s Billion Dollar Wireless Cash Grab: CRTC Data Shows Overage Fees Now Exceed Roaming Revenues appeared first on Michael Geist.

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