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Back to Bains: Why the CRTC Has Left Fixing Canada’s Wireless Woes to the Government

Michael Geist Law RSS Feed - Mon, 2018/03/26 - 10:03

Few policy issues have proven as frustrating as the state of Canadian wireless pricing. For the better part of a decade, Conservative and Liberal governments have grappled with overwhelming evidence that Canadian consumers pay some of the highest prices for wireless services in the world. The solution has always seemed obvious: more competition. Yet despite repeated efforts to nudge the market and regulator toward a more competitive environment, the needle has barely moved.

My Globe and Mail op-ed notes that the latest failed effort was sparked by Innovation, Science and Economic Development Minister Navdeep Bains’ June 2017 request to the Canadian Radio-television and Telecommunications Commission to reconsider a decision on how regional and smaller wireless companies access wholesale roaming services from larger providers.

Given the significant capital costs in building new networks from scratch (even giants Bell and Telus joined forces to build a shared network), the government was hoping that it could facilitate more competition through a mandated mobile virtual network operator model (MVNO). MVNOs typically do not own spectrum or network infrastructure. Instead, they purchase network access at wholesale rates from existing operators and offer it to consumers with their own retail pricing.

Last week, the CRTC slammed the door shut on mandated MVNOs for the foreseeable future. While its ruling offered up some affordability measures in the form of new, low-cost, data-only wireless alternatives that it wants carriers to offer, the decision was an unmistakable rejection of the government’s preferred policy measure.

Despite longstanding views that the path to better pricing lies with more competition, CRTC chair Ian Scott sounded like a telecom executive when he tried to spin the low-cost offering as a “superior alternative” to measures designed to foster new competitors through mandated MVNOs. Indeed, the Commission’s track record with low-cost offerings is not good. Its mandated “skinny basic” television service is generally viewed as a failure and this latest approach seems unlikely to have much impact with no enhanced choice of service providers.

Mr. Bains wasn’t buying Mr. Scott’s assessment, noting in a statement that “more must be done: true affordability can only come from true competition.” If the CRTC decision does not foster true competition, what might he have in mind?

At this stage, the government must surely recognize that the answer does not lie with the CRTC. Not only did the Commission sidestep wireless competition concerns with this latest decision, but last month it also rejected a request for a public inquiry into aggressive telecom sales tactics, essentially telling concerned consumers to look elsewhere for relief.

New CRTC chairs often use an early decision to set the tone for their mandate. Jean-Pierre Blais sent the message that the public interest would take priority when he initially rejected a proposed Bell-Astral merger and infamously challenged BCE CEO George Cope to respond to consumer concerns during a public hearing. Mr. Scott may have used this decision to set a different tone, affirming the Commission’s independence from the government and replacing the mantra of putting Canadians at the centre of their communications system with a more cautious, industry-friendly perspective.

New policy measures to enhance Canadian wireless competition will therefore fall to the government. The usual suspects – encouraging foreign investment and setting aside spectrum for new entrants – have to-date had only a limited impact.

Mr. Bains could signal that further marketplace consolidation will face government opposition on competition grounds. Such an approach comes too late to save the competitive landscape in Manitoba, where last year’s merger of Bell and MTS reduced the number of competitors from four to three with consumer pricing set to increase as a result. However, shutting the door on consolidation would help sustain better pricing in more competitively priced markets such as Saskatchewan and Quebec.

For the rest of the country, forging ahead with a mandated MVNO policy may be the best available option. In other markets, the emergence of nimble, low-cost competitors leads to more innovative pricing and services. The CRTC decision delays potential MVNO reform until at least 2020 and uses language that suggests it will face an uphill battle even then. The government need not wait for the CRTC to act and could take matters into its own hands.

In addition to facilitating new market entry, the government can start addressing lingering consumer frustrations such as escalating roaming charges and dubious sales tactics. Committee hearings on the state of the consumer wireless experience would bring the issue into the political arena and – when combined with the government’s strong support for net neutrality – provide some key issues to consider as part of a promised legislative review of Canada’s communications law framework.

Last June, Mr. Bains touted the benefits of a WiFi-based MVNO model, arguing that it “could benefit Canadian consumers, especially those with low incomes who are not well served by existing plans.” The CRTC extinguished those hopes last week, leaving the minister in the same position as many of his predecessors, facing frustrated consumers, an uncooperative regulator, and incumbent providers who appear far more comfortable fighting regulatory battles than bringing competitive pricing to the Canadian market.

The post Back to Bains: Why the CRTC Has Left Fixing Canada’s Wireless Woes to the Government appeared first on Michael Geist.

Coalition Featuring Google, Amazon, GoDaddy and CogecoPeer1 Warn Against Canadian Site Blocking Plan: Lost Jobs, Stifled Innovation

Michael Geist Law RSS Feed - Fri, 2018/03/23 - 09:11

The Internet Infrastructure Coalition, which features key players from across the Internet infrastructure industry including hosting and cloud service providers, domain registries, domain registrars, data centers, payment processors, and software developers, has filed a submission with the CRTC strongly opposing the Bell coalition website blocking plan. The coalition features a who’s who of some of the Internet’s biggest names: Google, Amazon, GoDaddy, and Verisign. There is also a notable Canadian presence including Tucows, Tuangru, and CogecoPeer1 (the inclusion of CogecoPeer1, which is owned by Cogeco Communications, is particularly interesting since Cogeco Connexion, a fellow subsidiary, is a member of the site blocking coalition).

The coalition emphasizes the harm that the website blocking plan would create:

The not-for-profit organization envisioned by the FairPlay Canada proposal lacks accountability and oversight, and is certain to cause tremendous collateral damage to innocent Internet business owners. There is shockingly little judicial review or due process in establishing and approving the list of websites being blocked — and no specifics of how this blocking is actually to be implemented. Then, once the block is established, the appeals process envisioned afterwards is too slow and costly for small businesses who have found themselves caught up in this blocking mechanism to bear.

The submission notes the problem associated with the lack of court orders, stating “asking for the suspension of the role of the judiciary in this process will chill free speech, place the interests of those who claim ownership of intellectual property ahead of those who may have legitimate disputes with the claimants, and impose costs on companies with few resources to resolve these disputes”, adding that “examples of erroneous, political and competition motivated takedowns are legion.”

After examining the risks to innovation and the Internet economy, the submission concludes with a warning on the negative economic impacts of the proposal:

After careful review of the FairPlay proposal, we believe that it will lead to significant loss of high-wage, high-tech jobs in our industry and other industries that are directly or indirectly supported by our industry. These impacts will diminish the attractiveness of Canadian companies to foreign customers, while also reducing the Canadian Internet industry’s ability to compete with foreign competition within its own borders.

The Internet Infrastructure Coalition submission is part of the mounting opposition from stalwarts of the Internet community, including the Internet Society and the Internet Society, Canadian Chapter.  As the number of interventions nears 10,000, a reminder that the CRTC is accepting comments until March 29th.

The post Coalition Featuring Google, Amazon, GoDaddy and CogecoPeer1 Warn Against Canadian Site Blocking Plan: Lost Jobs, Stifled Innovation appeared first on Michael Geist.

Back to You Minister Bains: CRTC Rejects Mandated MVNO System (Again)

Michael Geist Law RSS Feed - Thu, 2018/03/22 - 16:51

The CRTC has released its much-anticipated re-consideration ruling on how regional and smaller wireless companies access wholesale roaming services from larger providers. By sending a previous CRTC decision back to the Commission for re-consideration, Innovation, Science and Economic Development Minister Navdeep Bains signalled the government’s hope that the competitiveness problems in the Canadian wireless sector – consumers still pay some of the highest rates in the world – could be addressed through mandating access for new competitors on a wholesale basis. The Commission reviewed its earlier decision and basically said thanks, but no thanks, keeping the key policy elements unchanged.

While the Commission is altering how it calculates wholesale rates (which will lead to lower wholesale costs), moving toward creating low-cost data-only plans (carriers have a month to provide it with proposed plans), and will begin a new review of its mobile virtual network operator policy (MVNO) within a year, the decision represents a set-back for consumers and for a government that seemingly hoped the CRTC would take steps toward fostering a more competitive wireless environment. Instead, the Commission is siding with carriers that argue that mandated access would have a negative impact on their investment plans:

while the introduction of resale competition could result in some improvement to affordability, the Commission considers that the potential negative impact on investment outweighs that benefit. As to whether the evidence demonstrates in a “sufficiently clear and significant manner” that that potential negative impact on investment is outweighed by the potential positive impact on affordability, the Commission notes that its findings in this regard are based on the evidence that comprises the record of the current proceeding. Given the circumstances, the Commission considers that the record is persuasive insofar as it establishes that there is a risk to the investment by certain wireless carriers, especially with respect to expansion in rural areas, if the Commission were to expand access to wholesale wireless roaming.

The CRTC will seek new evidence on the state of the market as part of the next review, but that will not conclude until 2020. After that, even if it established a mandated MVNO policy, there would be appeals, reviews, and presumably further hearings. In other words, there is little relief coming for most consumers from the Commission on the state of wireless competition in Canada. Given the government’s stated concerns with wireless affordability, further steps may require a political or legislative solution. Over to you, Minister Bains.

The post Back to You Minister Bains: CRTC Rejects Mandated MVNO System (Again) appeared first on Michael Geist.

Outlier, Part 2: What is the CBC Doing Supporting Website Blocking?

Michael Geist Law RSS Feed - Thu, 2018/03/22 - 10:32

The Bell coalition website blocking proposal, dubbed FairPlay, clearly started with Bell: it first raised the issue in September at a House of Commons committee hearing, obtained the legal opinion to support the application (it is addressed to Bell), and used a closely allied law firm to draft the application. The coalition follows a familiar narrative, much like the “Fair for Canada” campaign in 2013 that was designed to convince Canadians that keeping foreign competitors such as Verizon out of the country was in their best interest.

The coalition features representation from several sectors (as noted yesterday, the leadership of telecom companies is an outlier when compared with other countries), but one participant in particular stands out. The CBC, Canada’s public broadcaster, has said its decision to join the coalition was a question of principle, reflecting its opposition to piracy. Yet the issue is not opposition to piracy, but rather whether the proposed coalition solution that includes blocking without court orders, violation of net neutrality principles, risks of over-blocking, and vulnerability on human rights norms run counter to other principles that ought to be held by a public broadcaster.

Indeed, far from supporting blocking, public broadcasters around the world have worked to give the public tools to circumvent blocking. For example, last year a group of international broadcasters – the British Broadcasting Corporation (BBC) (UK), Broadcasting Board of Governors (BBG) (US), Deutsche Welle (DW) (German Public International Broadcaster), France Medias Monde (FMM) (French Public Radio Broadcaster) – co-sponsored the Bypass Censorship website. These broadcasters recognized the problematic trend of blocking international news websites, social media, overall access to free and open Internet. To counter this, Bypass Censorship provides information on how to access and download tools to circumvent blocking efforts. Some of those tools (such as VPNs) could be targeted by the Bell coalition site blocking plan.

Further, public broadcasters around the world are often vocal in support of net neutrality, media freedom, and public access. For example, the European Broadcasters Union (the CBC is an associate member) has been a staunch advocate of net neutrality and open Internet, arguing for the need to give “audiences unfettered, non-discriminatory and transparent access to online content.” The BBC has emphasized the dangers of site blocking and worked to establish proxies and other tools to circumvent blocking efforts.

Moreover, given the significant public investment in the CBC, one of the goals of the national public broadcaster is to make its content as widely available to Canadians as possible. While opposition to unauthorized streaming sites is unsurprising, it is worth noting that the coalition is not trying to take down such sites as Canada already has legal tools to seek removal of unauthorized sites hosted in the country. Further, it is not trying to stop non-Canadians from accessing its content through unauthorized streaming sites. Rather, it is effectively trying to block Canadians from watching the unauthorized streams of CBC content that is typically freely available to the public on a number of platforms. The CBC might prefer that viewers use authorized services, but supporting blocking is a counter-intuitive position for a public broadcaster as it tries to stop Canadians from viewing the content they paid for through their tax dollars.

The CBC may justify its support for site blocking as a matter of principle, but in doing so it jettisoned other important principles that Canadians might have expected their public broadcaster to support. By adopting a position that it would prioritize blocking Canadians who try to access its programming, the CBC is outlier when compared to other public broadcasters who have worked to overcome blocking mandates around the world.

The post Outlier, Part 2: What is the CBC Doing Supporting Website Blocking? appeared first on Michael Geist.

Outlier: Why Bell’s Leadership on Website Blocking Places It at Odds With Telecom Companies Around the World

Michael Geist Law RSS Feed - Wed, 2018/03/21 - 10:06

The Bell website blocking coalition has consistently argued their plan is similar to those found in other countries that have permitted website blocking. As I detailed in my lengthy series on the proposal, it is actually an outlier, since the absence of court orders for blocking puts it at odds with virtually every other country that insists on court orders as a matter of basic due process. The proposal is also a significant outlier in another important respect, however. In most countries, telecommunication providers oppose website blocking, consistent with longstanding and widely held views that they should act as neutral intermediaries that provide carriage rather than play a proactive role of blocking access to online content.

Indeed, a review of many of the site blocking cases from around the world finds telecom companies opposing efforts to impose blocking orders. Last week, Vodaphone challenged a German court order to block a streaming site, arguing that it undermines consumer rights and its freedom to operate. Similar cases can be found in many other countries: T-Mobile refusing to block access in Austria, an Austrian ISP association welcoming a court ruling limiting blocking, Telenor refusing to block in Norway, several ISPs challenging blocking orders in the Netherlands, Greek ISPs successfully arguing in court that blocking is disproportionate, and Finnish ISP Elisa appealing a court order to block sites.

For a telecom company to play the lead role – supported by several other telecom and cable companies – makes Canada an outlier in the world of global telecommunications. For many years, Canadian telecom providers were neutral with respect to content. When the Canadian Recording Industry Association launched file sharing lawsuits against individual Canadians in 2004, Bell and Rogers initially adopted a neutral positions, neither opposing the suits nor supporting them (Shaw and Telus were far more committed to protecting their customers’ privacy). Over the years, Bell typically joined with other ISPs, zealously safeguarding its positions as an intermediary in the Supreme Court of Canada’s SOCAN v. CAIP decision and successfully fighting for fair dealing in the 2012 SOCAN v. Bell ruling. During the 2009 national consultation on copyright, Bell attended a Toronto public roundtable and expressed support for the positions of the Business Coalition for Balanced Copyright (which featured telecom companies as members and which voiced support for fair use and appropriate limits on digital locks).

Why the change?

First, the Canadian communications market is one of the most vertically integrated in the world, with many of the leading telecom companies owning significant broadcast properties or other content-related investments. That is true for Bell (CTV), Rogers (CITY-TV), Videotron (TVA), and Shaw (Corus/Global). All are members of the website blocking coalition. Leading telecom providers and ISPs that focus on carriage, such as Telus and TekSavvy, are not.

The shift in emphasis toward content, which is particularly pronounced at Bell, plays an important role in changing policy priorities. For example, last year Bell became an inaugural member of the Alliance for Creativity and Entertainment, a new anti-piracy group. Membership costs Bell US$200,000 annually, for which it gets to suggest targets for law enforcement and to utilize the MPAA’s anti-piracy resources. Bell the only Canadian company in the motion picture association backed alliance.

Second, the willingness of telecom and cable companies to oppose the interests of their own subscribers is indicative of an uncompetitive Internet services market. If Canadian consumers had real choice, supporting website blocking or actively opposing pro-consumer policies such as net neutrality or telecom transparency would have real consequences as many might take their business elsewhere. In the Canadian market, where consumer complaints and reports of misleading sales tactics are common, the companies seemingly operate with little fear of a competitive backlash (they are typically far more concerned with a regulatory or political response).

The federal government and ISED Minister Navdeep Bains have expressed increasing concern about the state of telecom competition and the affordability of Internet and wireless services. The Bell coalition website blocking plan would further reduce competition and lead to increased prices as ISPs face costs that could run into the millions for website blocking technologies. In fact, the outlier status of Canadian telecom companies in leading on a website blocking proposal provides the government with evidence of the negative consequences that arise from insufficient competition and excessive vertical integration.

The post Outlier: Why Bell’s Leadership on Website Blocking Places It at Odds With Telecom Companies Around the World appeared first on Michael Geist.

Platforms should make all ads public

Sara Bannerman - Tue, 2018/03/20 - 20:53
In my most recent opinion piece, I argue that platforms like Facebook, Google, Twitter, and other platforms that publish ads targeted at custom audiences, should publish a full, live public archive of all targeted online advertisements, displaying:
  • the ad, 
  • its source, 
  • a description of the targeted audience, 
  • the amount spent, 
  • impressions delivered and 
  • the demographics of the audience reached.
In the case of election advertisements, the archive should also identify:

  • the candidate that is the subject of the ad, and 
  • issue that is the subject of the ad. 
I argue that the archive should be live, enabling the immediate identification of problems - before the election is over.

You can read the full piece here.

Dialling Up the Bell Lobbying Playbook: Production Company Website Blocking Submissions Using Identical Script

Michael Geist Law RSS Feed - Tue, 2018/03/20 - 11:06

With just over a week left in the CRTC’s comment period on the Bell coalition website blocking proposal, the Commission has now received thousands of comments with the vast majority opposing the plan. While supporters of the site blocking approach have dismissed the opposition, Bell’s tactics in drumming up support deserves further examination. Last month, I blogged about its astroturfing campaign, which involved encouraging employees to submit comments without any reference to the need to disclose their corporate affiliation.

In addition to the internal efforts, Bell has clearly reached out to others with template language that can be used for submissions. Some customize their submissions, but many simply copy the supplied language verbatim. In fact, in some instances the language mirrors talking points included on the public site blocking site. For example, the FairPlay site FAQ states:

Piracy websites and services are operated anonymously online from jurisdictions all over the world, making it difficult or impossible to identify the people responsible for them or to bring enforcement actions. It is unreasonable to expect an artist or a small Canadian production company to track down and sue multiple anonymous parties operating in other countries every time they identify their content being stolen.

This is repeated in multiple submissions that copy the FAQ language. For example, the submission from Highway Entertainment:

Piracy websites operate anonymously online from jurisdictions all over the world, making it difficult to identify the people responsible for them or take action against them. It is unreasonable to expect an artist or a small Canadian production company to track down and sue multiple anonymous parties operating in other countries every time they identify their content being stolen.

and from Productions Casablanca:

Piracy websites operate anonymously online from jurisdictions all over the world, making it difficult to identify the people responsible for them or take action against them. It is unreasonable to expect an artist or a small Canadian production company to track down and sue multiple anonymous parties operating in other countries every time they identify their content being stolen.

and from Proper Television:

Piracy websites operate anonymously online from jurisdictions all over the world, making it difficult to identify the people responsible for them or take action against them. It is unreasonable to expect an artist or a small Canadian production company to track down and sue multiple anonymous parties operating in other countries every time they identify their content being stolen.

and from Great Pacific Television (with typo):

Piracy websites operate anonymously online from jurisdictions all over the world, making it difficult to identify the people responsible for them or take action against them. It is unreasonable to expect an artist or a small Canadian production company to track down and sure [sic] multiple anonymous parties operating in other countries every time they identify their content being stolen.

The same repetition of the script occurs with respect to claims that the website blocking proposal is similar to those found in 20 other countries (this is simply untrue given that the absence of a court order makes the Canadian system a clear outlier). The scripted language:

Anti-piracy regimes like the one proposed by FairPlay have been proven to work. 20 countries, including most of Canada’s closest international partners, have adopted similar regimes and have reported significant reductions to piracy as a result of the measures taken. It is high time Canada followed their lead.

This same paragraph appears word-for-word in submissions from Shaftesbury Films, Proper Television, Great Pacific Television, Productions Casablanca, and Highway Entertainment. Others, including Insight Productions and Pier 21 Films offer near-identical language.

This approach is typical of Bell’s advocacy approach. In 2011, I chronicled the repeat language from politicians such as Patrick Brown in support of its proposed merger with CTV.  In 2016, it lined up near-identical support from city mayors on a broadband appeal, sparking a Toronto city council motion opposing the mayor’s letter.

None of this is particularly surprising and it goes without saying that everyone should be encouraged to provide their views to the CRTC. However, those quick to dismiss public submissions as ill-informed or the result of organized campaigns should take a closer look at Bell’s astroturfing efforts and its outreach to supporters who profess concern with the issue but simply file submissions that do little more than copy-paste supplied language from Bell onto corporate letterhead.

The post Dialling Up the Bell Lobbying Playbook: Production Company Website Blocking Submissions Using Identical Script appeared first on Michael Geist.

Back to B.C.: Court Re-examines Google Takedown Order In Light of U.S. Ruling

Michael Geist Law RSS Feed - Fri, 2018/03/09 - 10:24

Last year’s Supreme Court of Canada Google v. Equustek case, which upheld a B.C. court’s global takedown order, continues to play out in the courts. The Supreme Court decision noted that it was open to Google to raise potential conflict of laws with the B.C. court in the hopes of varying the order:

If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly.

Google did just that by filing arguments in U.S. courts that “the Canadian order is ‘unenforceable in the United States because it directly conflicts with the First Amendment, disregards the Communication Decency Act’s immunity for interactive service providers, and violates principles of international comity.’” A U.S. court agreed, noting that CDA immunity protections would be lost as a result of the Canadian court order.  In doing so, the court concluded that the order “threatens free speech on the global internet.”

Last week, the case shifted back to Canada with Google seeking to vacate or vary the takedown order in light of the U.S. ruling. Equustek opposed the motion, seeking to delay a hearing on the matter. The judge confirmed that the hearing should go ahead (it was scheduled to take place this week) in light of the U.S. ruling and the Supreme Court’s invitation to seek a variance in the order “if Google had evidence, or could demonstrate, concerns that another jurisdiction felt the injunction negatively impacted core values of freedom of expression or comity.”

The court notably agreed that the case now engages core values of freedom of expression and comity:

It is of considerable importance that the US District Court has made a final finding that the enforcement of the Canadian injunction in the US is causing irreversible harm to Google. I agree with Google’s counsel that the authority and basis of that judgment does engage the core values of freedom of expression in the United States. That right is treated differently than it is in Canada, and comity, with respect, warrants that this Court be very concerned if parties are going to insist on enforcement of a judgment, which another jurisdiction has found is not in compliance with its own laws. In fact, that is exactly the situation referred to by the British Columbia Court of Appeal and the Supreme Court of Canada that would justify Google’s application to vary the injunction.

The outcome of this latest legal development promises to shed new light on the Internet jurisdiction issues that the Supreme Court largely avoided in its Equustek ruling and could go a long way toward limiting the impact of future overbroad “Equustek” takedown orders.

The post Back to B.C.: Court Re-examines Google Takedown Order In Light of U.S. Ruling appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, The Finale

Michael Geist Law RSS Feed - Thu, 2018/03/08 - 10:10

Nearly one month ago, I set out to outline the case against the Bell coalition’s website blocking plan. Sixteen instalments later (plus bonus posts on Bell’s astroturfing campaign and the remarkable success of the day of action opposing the plan), I have examined the myriad of problems with the proposal. The objective was never to justify piracy. Rather, it was to conclusively demonstrate that the proposal is disproportionate, harmful, offside international standards, violates Canadian norms, and does not come close to meeting the CRTC’s requirements for approval of website blocking. This post summarizes the key points for each of these five sources of concern. The CRTC is accepting interventions until March 29th, leaving Canadians with several more weeks to speak out to the Commission, their Member of Parliament, and the Innovation, Science, and Economic Development Minister Navdeep Bains.

i.    The Plan is a Disproportionate Response to Piracy Concerns

As ISED Minister Navdeep Bains rightly noted when the Bell coalition filed its proposal with the CRTC, Canada already has “numerous legal provisions and tools to help copyright owners protect their intellectual property.” Indeed, Canada has some of the world’s toughest anti-piracy provisions, which Bell and others have actively used in recent years. This includes lawsuits against set-top box distributors, mod-chip sellers, and websites such as TVAddons. Some of these lawsuits have resulted in massive damage awards running into the millions of dollars. Further, Canadian copyright law has also been used to shut down websites whose primary purpose is to enable infringement with rights holders relying on an “enabler provision” contained in the 2012 copyright reforms that can be used to target online sites that provide services primarily for the purpose of infringement. Copyright owners are seeking to create their own system at the CRTC without direct court involvement or policy review by Parliament. Before entertaining such a possibility, they should surely be required to test the effectiveness of existing law.

Moreover, the piracy evidence in Canada remains inconclusive at best as the data consistently shows that Canada is not a global leader when it comes to piracy. This includes data from Music Canada on stream ripping, from CEG-TEK on the impact of anti-piracy notices, and from the Business Software Alliance on software piracy rates. Even the MUSO report, which provides the key data points for the Bell’s coalition’s proposal, plainly states that Canadian piracy rates declined during the study period.

The limited impact of Canadian piracy is reflected in the data on the digital economy and Canadian creative sector, which show a thriving industry. The total value of the film and television sector exceeded $8 billion last year, over than a billion more than has been recorded over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production.

The Canadian data on digital business models also points to a steady stream of success stories that refute claims that it difficult if not impossible to create successful business models in Canada. Online video services, which the Bell coalition suggests are harmed by streaming sites, are experiencing rapidly expanding revenues, now generating more than $1 billion per year. In fact, two Canadian online video services – CraveTV and Club illico – are estimated to have earned $373 million last year, up from just $13 million four years earlier. The Canadian success story is not limited to online video as the online music market has experienced similar growth. According to industry data, the Canadian music market is growing much faster than the world average (12.8% in 2016 vs. 5.9% globally), streaming revenues more than doubled last year to US$127.9 million (up from US$49.82 million) growing far faster than the world average of 60.4%, the Canadian digital share of revenues of 63% is far above the global average of 50%, and Canada has leaped past Australia to become the 6th largest music market in the world.

The lack of proportionality stems not only from the limited impact of piracy in the Canadian market, but also from evidence that site blocking is far less effective than its proponents claim. For example, INCOPRO, which sells site blocking services including lists of sites to block (and therefore has an obvious vested interest in promoting their effectiveness) has issued several studies on blocking. A 2017 INCOPRO study on the effectiveness of Australian website blocking points to reduction in piracy rates but also examined usage of a list of 250 unauthorized sites:

Usage of the top 250 sites in Australia decreased by 4% (204,843) when comparing March 2017 to October 2016. Usage of the same sites reduced by 13% for the global (excluding Australia) group and by 10.8% for the global control group.

The study attributes the fact that Australian declines with site blocking were lower than global averages by acknowledging that “there may have been an increase in the usage of some unblocked sites as a result of the most popular site being blocked.” Further, INCOPRO studies contain a key exclusion:

General purpose VPN and proxy services have been excluded because they allow users to access any website of their choice. As a result, it cannot be definitively concluded that they are being used to access unauthorised sites.

Given that it does not account for users who shift their Internet usage to VPNs, the reliability of the data is questionable. This post identifies many more studies and court rulings that have concluded site blocking has limited long-term impact.

ii.    The Plan is Offside International Standards

One of the most obvious problems with the site blocking plan – indeed one that is fatal – is the absence of court orders for website blocking. The attempt to avoid direct court involvement means the proposal suffers from an absence of full due process, raising a myriad of legal concerns. If adopted, the coalition website plan would put Canada at odds with almost everyone since the data is unequivocal: the overwhelming majority of countries require a court order for site blocking.

Just how rare is non-court ordered blocking? Working with Amira Zubairi, a University of Ottawa law student, we examined 22 countries that have or have had some form of copyright-related website blocking. Some groups say that there are 27 countries with website blocking, but we excluded five countries due to widespread censorship: Saudi Arabia (which features government-backed Internet blocking), Indonesia (which has blocked 800,000 sites), Malaysia (which regularly uses the power to block legitimate sites), Turkey (which uses real-time large scale blocking of sites including Wikipedia) and South Korea (which uses censors to block access to thousands of web pages). Our research shows that of the 22 countries that have site blocked for copyright purposes, 20 use or have used court orders (the exceptions are Italy and Portugal). The full comparative details can be found here.

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

iii.    The Plan Would Create Serious Harms to Internet Access

The widespread opposition to the Bell coalition website blocking stems in large measure due to the many harms it would be create for those accessing online content and the Internet itself. Chief among them is the likelihood of blocking access to legitimate content and creating a framework that steadily expands in scope. The danger of over-blocking legitimate websites raises serious freedom of expression concerns, particularly since experience suggests that over-blocking is a likely outcome of blocking systems. The Council of Europe Commissioner for Human Rights issued a report in 2014 on the rule of law on the Internet in the wider digital world, noting:

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

One of the best-known cases of over-blocking arose in Canada in 2005, when Telus unilaterally blocked access to a pro-union website without a court order during a labour dispute. In doing so, it simultaneously blocked access to an additional 766 websites hosted on the same computer server.

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

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

The report noted risks of over-blocking with all technical approaches to site blocking. This post provides further detail on how the UK experience has been replicated in other countries.

Over-blocking becomes even more likely as the definition of “piracy” expands and the blocking extends to other issues. For example, the use of VPNs, which enhance privacy but also allow users to access out-of-market content, has been sore spot for the companies for many years. VPN services are already targeted by IP lobby groups such as the IIPA and can be expected to face demands for blocking (similar to the way Netflix and Hulu have cracked down on VPN use). Beyond VPNs, it would not be surprising to find legitimate services streaming unlicensed content as the next target. With Bell characterizing accessing U.S. Netflix as stealing, the company may call for blocking of content from foreign services without Canadian rights.

If the CRTC were to create a system for mandated website blocking of intellectual property issues, it would surely soon face requests for far more. For example, the first request for mandated website blocking involved a request in 2006 from Richard Warman to block two hate sites. Warman provided the Commission with expert evidence that the sites violated the Criminal Code. The CRTC refused to issue the order, noting that it did not think it had the legislative power under Section 36 to issue blocking orders. With the floodgates opened, however, hate speech sites would quickly give way to online gambling and other regulated activities.

The harms from a site blocking system involve more than just blocking legitimate content. The costs associated with site blocking with can run into the thousands of dollars per site with significant investment in blocking services, employee time to implement blocking mandates, and deal with associated service issues. A mandated blocking system applied to all ISPs in Canada would have an uneven impact: larger ISPs will face new costs but may find it easier to integrate into existing systems (some already block child pornography images), whereas hundreds of smaller ISPs would face significant new costs that would affect their marketplace competitiveness.

The cost concerns are not theoretical. Larger ISPs in the UK disclosed their approximate costs in a 2014 case. For example, Sky Broadband spent over 100,000 pounds to develop a website blocking system in 2011, solely for IP right infringing website injunctions and spent thousands more each month on monitoring costs. British Telecom spent over a million pounds on a DNS web-blocking system in 2012 and required more than two months of employee time on implementation. EE spent more than a million pounds on its web-blocking system and over 100,000 pounds every month for operations. While companies such as Bell would stand to gain from blocking with higher fees passed along to subscribers and reduced competition, smaller ISPs would face a difficult economic challenge, leaving all Canadians facing higher monthly Internet bills.

iv.    The Plan Violates Canadian Norms on Net Neutrality, Freedom of Expression, and Privacy

Of all the claims that accompanied the launch of the Bell coalition’s website blocking plan, the most audacious may be the repeated assurances that site blocking does not raise net neutrality issues. Given that the starting principle for net neutrality is the right for users to access content and applications of their choice, blocking content is prima facie a net neutrality violation. The fact that Bell argues that its site blocking plan does not implicate net neutrality should not come as a surprise. Bell, more than any other Canadian company, has spent more than a decade arguing that practically nothing is covered by net neutrality.

In this case, the Bell coalition argues that net neutrality is limited to “lawful content” and that its plan therefore falls outside the rules. In its application, however, it does not cite the Canadian rules. That too is unsurprising, since Canada’s net neutrality framework was never limited in application to content that is “lawful.” The 2009 CRTC net neutrality decision says the following about blocking:

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

In other words, blocking may only be permitted under exceptional circumstances where it furthers the telecommunications policy objectives. There is no reference to lawful content. In fact, the word “lawful” does not appear in the decision.

The Bell coalition website blocking plan may violate more than just Canadian net neutrality rules. As currently framed, it may also violate human rights norms. Website blocking or other measures to limit access to the Internet raises obvious freedom of expression concerns that has sparked commentary from many international organizations. Frank LaRue, the former U.N. Rapporteur on Freedom of Expression, was one of several experts on freedom of expression, including representatives from the Organization for Security and Co-operation in Europe, the Organization of American States, and the African Commission on Human and Peoples’ Rights, who issued a joint declaration in 2011 on freedom of expression and the Internet. It states the following on blocking:

Mandatory blocking of entire websites, IP addresses, ports, network protocols or types of uses (such as social networking) is an extreme measure – analogous to banning a newspaper or broadcaster – which can only be justified in accordance with international standards, for example where necessary to protect children against sexual abuse.

In 2012, a further declaration from LaRue and the IACHR-OAS Special Rapporteur on Freedom of Expression states:

all restrictions on freedom of expression, including those that affect speech on the Internet, should be clearly and precisely established by law, proportionate to the legitimate aims pursued, and based on a judicial determination in adversarial proceedings. In this regard, legislation regulating the Internet should not contain vague and sweeping definitions or disproportionately affect legitimate websites and services.

International human rights rules and declarations leave the Bell coalition website blocking plan vulnerable to challenge in at least two respects: the absence of court orders and the proportionality of the measures relative to harm.

The Bell website blocking coalition cites privacy protection as a reason to support its plan, noting the privacy risks that can arise from unauthorized streaming sites. Even if Bell was as an exemplary company with respect to privacy protection (which it is not), its website blocking proposal would still pose significant privacy risks. First, the use of virtual private networks is an increasingly important mechanism for users to safeguard their privacy online. Since the response to site blocking from some Internet users will surely involve using VPNs to evade the blocks, the attempt to characterize VPNs as services engaged in piracy will only increase. Further, the identification of piracy sites and usage by subscribers depends upon snooping into Internet users’ online activities. In fact, certain website blocking technologies raise serious privacy concerns. An Ofcom review of site blocking noted:

To be successful, any process also needs to acknowledge and seek to address concerns from citizens and legitimate users, for example that site blocking could ultimately have an adverse impact on privacy and freedom of expression.

Rather than enhancing privacy protection, the Bell coalition proposal puts it at greater risk, with the possibility of VPN blocking, incentives to monitor customer traffic, and the potential adoption of invasive site blocking technologies.

v.    The Plan Does Not Comply With CRTC Rules For Approval of Site Blocking

Even if the CRTC were to still think this terrible idea is worth supporting, it would fall outside its stated rules on website blocking. The Commission has made it clear that it will only permit blocking in “exceptional circumstances” and only where doing so would further the objectives found in the Telecommunications Act. The Bell coalition website blocking proposal does not come close to meeting the standards established by the CRTC, applicable legislation, and the federal government.

The CRTC said the following in its September 2016 letter arising out of the Quebec law mandating the blocking of access to unlicensed gambling sites:

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 Bell website blocking proposal must therefore do more than simply raise concerns with respect to copyright law or cultural policies found in the Broadcasting Act objectives. Rather, it must convince the CRTC that website blocking would further the telecommunications policy objectives.  The Bell coalition application cites three objectives in support: that piracy “threatens the social and economic fabric of Canada” (subsection a), that the telecommunications system should “encourage compliance with Canadian laws” (subsection h), and that website blocking “will significantly contribute toward the protection of the privacy of Canadian Internet users” (subsection i).

The Bell coalition case is exceptionally weak on all counts. As discussed in great detail earlier in the series, there is no compelling evidence that piracy is threatening the social and economic fabric of Canada. The argument 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. As for privacy, if anything, the proposal places privacy at risk.

In fact, not only does the Bell proposal fail to make the case that it furthers the Telecommunications Act objectives, but there is a far better argument that it undermines them:

  • Subsection (a) references the “orderly development throughout Canada” of the telecommunications system, but the creation of a blocking system applied to hundreds of ISPs and wireless carriers of all sizes across the country would undermine that goal as it would likely lead to the implementation of differing blocking technologies, inconsistent over-blocking of legitimate content, and a non-neutral Internet in Canada. Access to content could differ from ISP to ISP.
  • Subsection (b) identifies reliability and affordability as objectives, but both would be undermined by website blocking. The reliability of the telecommunications services would be harmed by over-blocking of legitimate content and by the violation of net neutrality norms. The goal of better affordability would be undermined by the increased costs that would be passed along to subscribers to fund site blocking technologies and services.
  • Subsection (c) focuses on competitiveness of telecommunications services, yet the website blocking plan would have an uneven impact: larger ISPs will face new costs but may find it easier to integrate into existing systems (some already block child pornography images), whereas hundreds of smaller ISPs would face significant new costs that would affect their marketplace competitiveness. In fact, while companies such as Bell would stand to gain from blocking with higher fees passed along to subscribers and reduced competition, smaller ISPs would face a difficult economic challenge, leaving all Canadians facing higher monthly Internet bills and reduced competition.
  • Subsection (f) emphasizes the need for efficiency and reliance on market forces. As discussed last week in a post on why the plan is inconsistent with the CRTC Policy Direction, website blocking could not be more inconsistent with that objective. Indeed, with courts around the world concluding that site blocking is a disproportionate remedy, evidence that it is likely to lead to overblocking and is ineffective, and that it risks violating net neutrality and privacy rights, the plan fails to meet the Telecommunications Act objective of “efficient and effective” regulation.
  • Subsection (h) speaks to the economic and social requirements of users of telecommunications services, but users of those services are largely absent from the proposal. Instead, broadcasters, broadcast distributors, movie theaters, and some creator groups seek to impose new restrictions on users in the form of a regulatory framework without court orders. If anything, the social requirements of users should include compliance with net neutrality, human rights, and privacy norms, a standard the Bell coalition proposal fails to meet.
  • Subsection (i) focuses on contributing to privacy protection, but rather than enhancing privacy protection, the Bell coalition proposal puts it at greater risk, with the possibility of VPN blocking, incentives to monitor customer traffic, and the potential adoption of invasive site blocking technologies.

Moreover, the Bell coalition proposal fails to comply with the policy direction to the CRTC on implementing Canadian telecommunications policy objectives. Despite years of insistence that the CRTC follow the policy direction, Bell has now proposed regulatory intervention that could not be more inconsistent with that direction. After invoking the policy direction at seemingly every opportunity, the Bell application suddenly goes silent with respect to the issue (the legal opinion references a separate aspect of direction to argue that non-economic regulations are permitted).

However, with courts around the world concluding that site blocking is a disproportionate remedy, evidence that it is likely to lead to overblocking, and risks that violates net neutrality and privacy rights, the plan fails to meet the policy direction’s requirement of “efficient and proportionate” regulation. Further, the evidence on the current state of the Canadian market with record revenues and Canadian production reinforces that market forces are working as consumers embrace well-priced, convenient authorized services. Indeed, there is no market failure that requires a heavy-handed regulatory approach that promises to yield years of litigation over its very existence.

Finally, the proposal runs counter to the CRTC’s longstanding emphasis that it does not licence or judge Internet content nor is it empowered by legislation to do so. The regulatory framework for telecommunications – whether in the Act’s objectives, the government’s policy direction, or in the Supreme Court’s clear separation of broadcasting and telecom – all point to policy priorities premised on efficiency, affordability, and competitiveness. The CRTC recognizes that content regulation of telecommunications is incompatible with those priorities since its primary role is to help facilitate a competitive marketplace. To engage in content regulation on the Internet would turn it into an Internet content regulatory authority, opening the door to licensing or regulating Internet streaming services, content that runs through ISP networks, and the legality of web-based content wherever it may be located.

Supporters of the Bell proposal downplay these concerns, arguing that it is a narrowly tailored approach to address piracy. This series has identified why the blocking system is likely to lead to overblocking and expanded scope of coverage for both IP and non-IP issues. But even more fundamentally, implementing a blocking plan without court order under the auspices of the CRTC turns the Commission (and by extension the government) into a regulator of Internet content in direct contradiction to the CRTC’s stated approach to online content.

For further discussion on all of these issues, links to the full series is posted below:

The post The Case Against the Bell Coalition’s Website Blocking Plan, The Finale appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 16: The CRTC as the Internet Content Regulatory Authority

Michael Geist Law RSS Feed - Wed, 2018/03/07 - 10:41

In Canada, services that broadcast over the Internet don’t need a licence from the CRTC, as we exempted them from this obligation. We do not intervene on content on the Internet.

This statementwe do not intervene on content on the Internet – appears on the CRTC site at the very beginning of a page devoted to TV shows, movies, music and other content online. It may not be a regulatory statement, but it reflects how the CRTC sees itself and how it wants to be seen. Bell and other companies associated with the coalition have regularly tried to drag it into various forms of content regulation under the Telecommunications Act. Yet the Commission has rightly rejected those efforts, emphasizing that it does not licence or judge Internet content nor is it empowered by legislation to do so.

The CRTC’s past pronouncements on website blocking are a case in point. As noted earlier in the series, the first request for mandated website blocking involved a request in 2006 from Richard Warman to block two hate sites. Warman provided the Commission with expert evidence that the sites violated the Criminal Code. The CRTC refused to issue the order, noting that it did not think it had the legislative power under Section 36 to issue blocking orders. The Commission’s unwillingness to order the blocking of sites that violate the Criminal Code highlights why ordering the blocking of non-criminal content as contemplated by the Bell plan should be a non-starter.

Further, the CRTC’s September 2016 letter arising out of the Quebec law mandating the blocking of access to unlicensed gambling sites noted that “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.” This statement is often cited with reference to the CRTC’s ability to approve blocking in exceptional circumstances. However, the more important takeaway is that the CRTC is not the right venue to opine on the legality of activities that fall outside of its legislative framework.

The Commission’s net neutrality rulings provides another illustration of its aversion to content regulation within the Telecommunications Act. For example, in the 2017 differential pricing decision, some groups argued for preferential treatment for Canadian content. The CRTC rejected the proposals:

Given all the drawbacks and limitations of using differential pricing practices as a way to support and promote Canadian programming, the Commission considers that any benefits to the Canadian broadcasting system would generally not be sufficient to justify the preference, discrimination, and/or disadvantage created by such practices.

In other words, even some potential benefits for Broadcasting Act policies are not enough to overcome the harms that arise from tinkering with the free flow of telecommunications. The Bell coalition’s legal opinion notably spends more time justifying the site blocking plan under the Broadcasting Act than it does under the Telecommunications Act. The reason for doing so is obvious: site blocking cannot be easily justified under the Telecommunications Act. Indeed, the attempt to incorporate the Broadcasting Act into the argument runs counter to the Supreme Court of Canada’s 2012 ISP Reference, which leaves no doubt that ISPs simply do not fall under that Act when transmitting content:

An ISP does not engage with these policy objectives when it is merely providing the mode of transmission.  ISPs provide Internet access to end-users.  When providing access to the Internet, which is the only function of ISPs placed in issue by the reference question, they take no part in the selection, origination, or packaging of content.  We agree with Noël J.A. that the term “broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Broadcasting Act’s policy objectives.

The regulatory framework for telecommunications – whether in the Act’s objectives, the government’s policy direction, or in the Supreme Court’s clear separation of broadcasting and telecom – all point to policy priorities premised on efficiency, affordability, and competitiveness. To engage in content regulation on the Internet is incompatible with those priorities and would turn the CRTC into an Internet content regulatory authority, opening the door to licensing or regulating Internet streaming services, traffic that runs through ISP networks, and web-based content wherever it may be located.

Supporters of the Bell proposal downplay these concerns, arguing that it is a narrowly tailored approach to address piracy. This series has identified why the blocking system is likely to lead to overblocking and expanded scope of coverage for both IP and non-IP issues. But even more fundamentally, implementing a blocking plan without court order under the auspices of the CRTC turns the Commission (and by extension the government) into a regulator of Internet content in direct contradiction to the telecommunications legislative framework and the CRTC’s stated approach to online content.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 16: The CRTC as the Internet Content Regulatory Authority appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 15: It Undermines the Telecommunications Act Policy Objectives

Michael Geist Law RSS Feed - Tue, 2018/03/06 - 10:57

The CRTC has ruled that it will only permit website blocking in “exceptional circumstances” and only where doing so would further the objectives found in the Telecommunications Act. As yesterday’s post noted, even if the CRTC were to think that the terrible Bell coalition website blocking proposal is worth supporting, the plan falls outside the Commission’s stated rules on website blocking since the application fails to make the case that it furthers the objectives found in the Act.

In fact, not only does the Bell proposal fail to make the case that it furthers the Telecommunications Act objectives, but there is a far better argument that it undermines them. As noted yesterday, the Telecommunications Act identifies nine objectives:

(a) to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions;

(b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;

(c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;

(d) to promote the ownership and control of Canadian carriers by Canadians;

(e) to promote the use of Canadian transmission facilities for telecommunications within Canada and between Canada and points outside Canada;

(f) to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective;

(g) to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services;

(h) to respond to the economic and social requirements of users of telecommunications services; and

(i) to contribute to the protection of the privacy of persons.


There are strong arguments that the Bell proposal undermines more than half of the Telecommunications Act’s objectives:

  • Subsection (a) references the “orderly development throughout Canada” of the telecommunications system, but the creation of a blocking system applied to hundreds of ISPs and wireless carriers of all sizes across the country would undermine that goal as it would likely lead to the implementation of differing blocking technologies, inconsistent over-blocking of legitimate content, and a non-neutral Internet in Canada. Access to content could differ from ISP to ISP.
  • Subsection (b) identifies reliability and affordability as objectives, but both would be undermined by website blocking. The reliability of the telecommunications services would be harmed by over-blocking of legitimate content and by the violation of net neutrality norms. The goal of better affordability would be undermined by the increased costs that would be passed along to subscribers to fund site blocking technologies and services.
  • Subsection (c) focuses on competitiveness of telecommunications services, yet the website blocking plan would have an uneven impact: larger ISPs will face new costs but may find it easier to integrate into existing systems (some already block child pornography images), whereas hundreds of smaller ISPs would face significant new costs that would affect their marketplace competitiveness. In fact, while companies such as Bell would stand to gain from blocking with higher fees passed along to subscribers and reduced competition, smaller ISPs would face a difficult economic challenge, leaving all Canadians facing higher monthly Internet bills and reduced competition.
  • Subsection (f) emphasizes the need for efficiency and reliance on market forces. As discussed last week in a post on why the plan is inconsistent with the CRTC Policy Direction, website blocking could not be more inconsistent with that objective. Indeed, with courts around the world concluding that site blocking is a disproportionate remedy, evidence that it is likely to lead to overblocking and is ineffective, and that it risks violating net neutrality and privacy rights, the plan fails to meet the Telecommunications Act objective of “efficient and effective” regulation.
  • Subsection (h) speaks to the economic and social requirements of users of telecommunications services, but users of those services are largely absent from the proposal. Instead, broadcasters, broadcast distributors, movie theaters, and some creator groups seek to impose new restrictions on users in the form of a regulatory framework without court orders. If anything, the social requirements of users should include compliance with net neutrality, human rights, and privacy norms, a standard the Bell coalition proposal fails to meet.
  • Subsection (i) focuses on contributing to privacy protection, but rather than enhancing privacy protection, the Bell coalition proposal puts it at greater risk, with the possibility of VPN blocking, incentives to monitor customer traffic, and the potential adoption of invasive site blocking technologies.

Yesterday’s post concluded by stating that “website blocking does not further the objectives under the Act and can be rejected by the CRTC on those grounds alone.” That is an understatement since not only does the proposal not further the objectives, it actively undermines them. The CRTC should reject the plan on those grounds alone.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 15: It Undermines the Telecommunications Act Policy Objectives appeared first on Michael Geist.

No Longer Fit for Purpose: Why Canadian Privacy Law Needs an Update

Michael Geist Law RSS Feed - Tue, 2018/03/06 - 10:18

Canada’s private sector privacy law was first introduced 20 years ago, coinciding with the founding of Google and predating Facebook, the iPhone, and the myriad of smart devices that millions of Canadians now have in their homes. Two decades is a long time in the world of technology and privacy and it shows. There has been modest tinkering with the Canadian rules over the years, but my Globe and Mail opinion piece notes the law is struggling to remain relevant in a digital age when our personal information becomes increasingly valuable and our consent models are little more than a legal fiction.

The House of Commons Standing Committee on Access to Information, Ethics and Privacy last week released the results of a comprehensive study into Canadian privacy law. The report, which features 19 recommendations, provides Innovation, Science and Economic Development Minister Navdeep Bains with a road map for future reforms (I appeared before the committee as one of 68 witnesses from across the policy spectrum).

The report touches on everything from special privacy safeguards for minors to enhanced enforcement powers for the Office of the Privacy Commissioner of Canada, but at its heart are three key findings: the law is no longer fit for purpose, the standard of consent is not good enough, and Canada is at risk of restrictions on data transfers with the European Union if the government does not act.

The failure of the current law to keep pace with the changing technological environment will come as little surprise to anyone with even a passing familiarity with the legislative framework. For example, Daniel Therrien, the federal privacy commissioner, recently proposed trying to shoehorn in the right to be forgotten (described as a right to de-index online search results) within the existing law, yet the law is ill-suited to do so. The committee report is truer to the current situation, acknowledging that addressing the complicated challenges associated with harmful yet legal content online requires a legal tool set that does not exist under current Canadian law.

The law features a mandatory review every five years, but that process has yielded few tangible results. Modest reforms from hearings that date back to 2006 have still not been fully implemented. In fact, when scarcely a week goes by without a major data breach affecting thousands of people, it is shocking that Canadian privacy law still does not have mandatory security breach disclosure rules in operation.

Data breach disclosure requirements were included in the Digital Privacy Act that was passed in 2015, but the accompanying regulations have still not been finalized. The failure to expedite security breach disclosure rules is an embarrassing failure for successive Conservative and Liberal governments, placing the personal information of millions of Canadians at risk and effectively giving a free-pass to companies that do not adequately safeguard their customers’ information.

In addition to the Digital Privacy Act delays, piecemeal protections for identity theft and anti-spam rules are now in effect, but those laws point to the emerging battle at the heart of privacy law: the appropriate standard of consent.

Consent provides the foundation for Canadian privacy law, which is premised on users’ agreeing to the collection, use and disclosure of their personal information. However, as anyone who has viewed eerily targeted advertising or received unexpected marketing calls knows, companies have adopted exceptionally aggressive interpretations of the standards of consent, implying agreement to use personal information with little regard for the real intention, expectation or knowledge of individual Canadians.

The committee recommends significant reforms to the standard of consent, but the long-standing battle over Canada’s anti-spam laws provides an advance preview of the challenge of implementing rules premised on genuine consent after years of weaker opt-out models. The fight over the anti-spam law is often portrayed as a dispute over onerous regulations, yet the reality has long been far simpler: it is a fight over implementing higher standards of opt-in consent.

If Canada does not get its privacy house in order, the committee notes there may be a political and economic price to be paid. As Canadian law stagnates, European privacy rules have steadily advanced, with a major overhaul set to take effect in a few months. Canadian law received an “adequacy” finding from European officials many years ago, but that may be in jeopardy as the differences between the two systems widens. The committee recommends identifying what is needed to maintain the adequacy status, whose loss could lead to restrictions on data transfers between Canada and the European Union. Without an adequacy finding, businesses on both sides of the Atlantic would face severe limits on the transfer of personal information between Canada and Europe, causing significant barriers for sectors such as financial services, retail and marketing.

Canada was once regarded as having adopted a progressive, flexible privacy law that balanced the needs of consumers and businesses. After nearly two decades of neglect, the law is badly in need of updating and awaiting a political champion who recognizes that good privacy is also good politics.

The post No Longer Fit for Purpose: Why Canadian Privacy Law Needs an Update appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 14: Failure To Further the Telecommunications Act Policy Objectives

Michael Geist Law RSS Feed - Mon, 2018/03/05 - 10:20

This series has devoted the past several weeks to making the case that the Bell coalition website blocking plan is a disproportionate, ineffective response to piracy that is out-of-step with global standards, will raise consumer Internet costs, result in over-blocking legitimate content, and that is offside Canadian norms on net neutrality, privacy and human rights. Yet even if the CRTC were to still think this terrible idea is worth supporting, it would fall outside its stated rules on approving website blocking. The Commission has made it clear that it will only permit blocking in “exceptional circumstances” and only where doing so would further the objectives found in the Telecommunications Act.

As discussed last month, the 2009 CRTC net neutrality decision says the following about website blocking:

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

The CRTC view was reiterated in its September 2016 letter arising out of the Quebec law mandating the blocking of access to unlicensed gambling sites:

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 Bell website blocking proposal must therefore do more than simply raise concerns with respect to copyright law or cultural policies found in the Broadcasting Act objectives. Rather, it must convince the CRTC that website blocking would further the telecommunications policy objectives (in addition to demonstrating it is consistent with the CRTC Policy Direction, which it is not). The Telecommunications Act enumerates nine objectives:

(a) to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions;

(b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;

(c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;

(d) to promote the ownership and control of Canadian carriers by Canadians;

(e) to promote the use of Canadian transmission facilities for telecommunications within Canada and between Canada and points outside Canada;

(f) to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective;

(g) to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services;

(h) to respond to the economic and social requirements of users of telecommunications services; and

(i) to contribute to the protection of the privacy of persons.


The Bell coalition application cites three objectives in support: that piracy “threatens the social and economic fabric of Canada” (subsection a), that the telecommunications system should “encourage compliance with Canadian laws” (subsection h), and that website blocking “will significantly contribute toward the protection of the privacy of Canadian Internet users” (subsection i).

The Bell coalition case is exceptionally weak on all counts. As discussed in great detail earlier in the series, there is no compelling evidence that piracy on telecommunications networks is threatening the social and economic fabric of Canada. Indeed, claims that Canada is a piracy haven are not supported by the data. If anything, the data supports the view that Canadians are rapidly shifting away from unauthorized sites toward legal alternatives as better, more convenient choices come into the market.

Moreover, the Canadian data on the digital economy and Canadian creative sector show a thriving industry. The total value of the Canadian film and television sector exceeded $8 billion last year, over than a billion more than has been recorded over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production. The Canadian data on digital business models also points to a steady stream of success stories that refute claims that it is difficult if not impossible to create successful business models in Canada. Online video services, which the Bell coalition suggests are harmed by streaming sites, are experiencing rapidly expanding revenues, now generating more than $1 billion per year. In fact, two Canadian online video services – CraveTV and Club illico – are estimated to have earned $373 million last year, up from just $13 million four years earlier.

The argument on 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. The coalition couches this argument within the objective of responding “to the economic and social requirements of users of telecommunications services”, but even the application doesn’t seem to buy its own argument. It states:

Clearly the Canadian telecommunications system should encourage compliance with Canada’s laws, including laws with respect to the intellectual property communicated by telecommunications. Those laws exist to foster social and economic objectives important to Canadian society, including encouraging the creation and dissemination of creative works through the creation of a rights system (under the Copyright Act and related statutes) that fairly compensates content creators.

Yet the Bell coalition surely knows that this is not argument about furthering the objectives of the Telecommunications Act, but rather the Copyright Act. The CRTC has already concluded that that does not help justify website blocking.

Most head-scratching is the claim that this will further the Telecommunications Act objective of user privacy. As I discussed last week, 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 not credible. The website blocking plan may target privacy enhancing technologies such as virtual private networks, hints at snooping into Internet users’ online activities, and may deploy site blocking technologies that raise serious privacy concerns. If anything, the proposal places privacy at risk.

Bell and its allies have engaged in an active lobbying and public relations campaign in support of website blocking, but from a legal perspective, they must make the case that the proposal furthers the Telecommunications Act objectives. The 102 paragraph application devotes just two paragraphs to the issue. The reason is obvious: website blocking does not further the objectives under the Act and can be rejected by the CRTC on those grounds alone.

The post The Case Against the Bell Coalition’s Website Blocking Plan, Part 14: Failure To Further the Telecommunications Act Policy Objectives appeared first on Michael Geist.

The Case Against the Bell Coalition’s Website Blocking Plan, Part 13: It is Inconsistent With the CRTC Policy Direction

Michael Geist Law RSS Feed - Fri, 2018/03/02 - 11:05

Having examined the foundational weaknesses of the Bell coalition’s website blocking plan (existing Canadian law, weak piracy evidence, limited impact) and its negative effects (lack of court orders, overblocking, ineffectiveness, violation of net neutrality, vulnerability on freedom of expression grounds, higher Internet costs, privacy risks), the case against the plan enters the final phase with several posts on how it fails to meet the requirements under the Telecommunications Act.

In 2006, then-Industry Minister Maxime Bernier led the push for a new policy direction to the CRTC on implementing Canadian telecommunications policy objectives. The direction states:

In exercising its powers and performing its duties under the Telecommunications Act, the Canadian Radio-television and Telecommunications Commission (the “Commission”) shall implement the Canadian telecommunications policy objectives set out in section 7 of that Act, in accordance with the following:
(a) the Commission should
(i) rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and

(ii) when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives;


It is fair to say that Bell has been the policy direction’s biggest supporter. During hearings on the policy direction, Bell executives touted the move toward “fewer regulatory proceedings and minimally intrusive regulations.” In the years since its issuance, scarcely a proceeding goes by where Bell does not raise it with the CRTC, cite it when asking the Commission to review and vary its previous ruling, reference it in cases at the Federal Court, or rely on it when petitioning Cabinet to vary a decision.

Yet despite years of insistence that the CRTC follow the policy direction, it has now proposed regulatory intervention that could not be more inconsistent with that direction. Indeed, after invoking the policy direction at seemingly every opportunity, the Bell application suddenly goes silent with respect to the issue (the legal opinion references a separate aspect of direction to argue that non-economic regulations are permitted).

However, with courts around the world concluding that site blocking is a disproportionate remedy, evidence that it is likely to lead to overblocking, and risks that it violates net neutrality and privacy rights, the plan fails to meet the policy direction’s requirement of “efficient and proportionate” regulation. Moreover, the evidence on the current state of the Canadian marketplace reinforces that market forces are working as consumers embrace well-priced, convenient authorized services and the production industry thrives with record-setting investment. The data leaves little doubt that there is no market failure that requires a heavy-handed regulatory approach which promises to yield years of litigation over its very existence.

The proposal does not even meet the Telecommunications Act objectives (as will be discussed in a future post), but even if it did, it is at odds with the policy direction and Bell’s own longstanding advocacy on CRTC regulation, providing an obvious and clear-cut basis for the Commission to reject it.

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Fair Dealing and the Right to Read: The Case of Blacklock’s Reporter v. Canada (Attorney General)

Michael Geist Law RSS Feed - Fri, 2018/03/02 - 10:46

My fair dealing week posts conclude with a look at the link between fair dealing and the fundamental right to read (previous posts focused on the lawsuit to recover overpayments from Access Copyright, the importance of fair dealing for creators, freedom of expression, and news reporting). The critical importance of fair dealing as a user’s right was demonstrated in the 2016 copyright case between the Blacklock’s Reporter, an Ottawa-based online paywalled news site, and the federal government. Blacklock’s, which has filed multiple lawsuits against government departments, sued the Department of Finance for $17,209.10 over two articles that were sent to government officials from a paying subscriber concerned with comments found in the article. The articles were subsequently forwarded to several media relations personnel within the department.

The court placed fair dealing at the very centre of its decision:

To resolve this matter I need only decide whether the conduct Blacklock’s impugns is protected under the fair dealing provisions of the Act and, in particular, section 29. Although there are certainly some troubling aspects to Blacklock’s business practices it is unnecessary to resolve the Attorney General’s allegation that this litigation constitutes a form of copyright abuse by a copyright troll.

Affirming well established Supreme Court jurisprudence on fair dealing, the court emphasized that fair dealing is a user’s right that must not be interpreted restrictively. In this case, the court had little trouble finding that the department’s use of the articles qualified as fair dealing given that it was done for a proper research purpose, involved a limited distribution, the originals were obtained legally by a paying subscriber, and officials had a legitimate interest in reading the articles in order to hold Blacklock’s to account for questionable reporting.

The court’s fair dealing assessment is notable for its emphasis on the link between fair dealing and the right to read, expressing concern about the chilling effect if news sources were restricted from reading the results of their interviews with the press:

The articles contained information obtained from the Department in response to Mr. Korski’s queries. As a source, the Department had a direct and immediate interest in their content. Indeed, a finding of copyright infringement against a news source for the simple act of reading the resulting copy is likely to have a chilling effect on the ability of the press to gather information. Such a result cannot be in the public interest.

Indeed, the court characterized the use as simply an act of reading and warned against copyright being used to stop holding the press accountable for potential errors or omissions:

What occurred here was no more than the simple act of reading by persons with an immediate interest in the material. The act of reading, by itself, is an exercise that will almost always constitute fair dealing even when it is carried out solely for personal enlightenment or entertainment. While the public interest is served by the vigilance of the press, copyright should not be a device that serves to protect the press from accountability for its errors and omissions. The Department had a legitimate interest in reading the articles with a view to holding Blacklock’s to account for its questionable reporting.

Echoing the Supreme Court of Canada’s CCH decision in which it confirmed that “as an integral part of the scheme of copyright law, the s. 29  fair dealing exception is always available”, the decision closes with an important reminder with which to conclude fair dealing week:

It also goes without saying that whatever business model Blacklock’s employs it is always subject to the fair dealing rights of third parties.

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The Case Against the Bell Coalition’s Website Blocking Plan, Part 12: Increasing Privacy Risks for Canadians

Michael Geist Law RSS Feed - Thu, 2018/03/01 - 10:35

The Bell website blocking coalition cites privacy protection as a reason to support its plan, noting the privacy risks that can arise from unauthorized streaming sites. 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, however. Further, with literally millions of sites that pose some privacy risk, few would argue that the solution lies in blocking all of them. In fact, the privacy argument is not only weak, it is exceptionally 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 not credible.

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.

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 reports that it has hijacked browser sessions from customers that have asked to cancel services. The Privacy Commissioner is currently investigating the practice.

Even if Bell was as an exemplary company with respect to privacy protection, its website blocking proposal would still pose significant privacy risks. First, the use of virtual private networks is an increasingly important mechanism for users to safeguard their privacy online. Yet as noted earlier in this series, targeting VPNs is a likely next step for the anti-piracy effort, particularly since the services have been sore spot for the companies for many years. In 2015, Rogers executive David Purdy reportedly called for shutting down VPNs, while Bell executive Mary Ann Turcke specifically targeted VPN usage to access U.S. Netflix, telling an industry conference:

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

The comments equating VPN use to theft echo the remarks being made today by the Bell coalition about piracy sites and services. Further, since the response to site blocking from some Internet users will surely involve using VPNs to evade the blocks, the attempt to characterize VPNs as services engaged in piracy will only increase.

Second, the identification of piracy sites and usage by subscribers depends in part upon snooping into Internet users’ online activities. Sandvine, whose piracy data is cited in the Bell coalition application, openly acknowledges that “by inspecting unencrypted channels, communications service providers gain a more complete perspective on how subscribers are viewing pirated content.” In other words, ISPs have incentives to track user activity by inspecting unencrypted communications to identify which sites are being visited.

In fact, the Bell coalition application hints at monitoring subscriber activity to gauge the impact of piracy. After citing cord cutting data, it states:

While it is impossible to determine precisely how many of these 1.1 million households are lost subscribers due to piracy, the experience of relevant members of the coalition with their customers confirms that consumers who engage with piracy sites are many times more likely to cancel legal services or never subscribe to them in the first place than are those that do not engage with piracy sites.

How is Bell – or any other communications company – able to establish a linkage between website visits and cable/satellite subscription cancellations? Either statement is purely speculative or the companies are actively monitoring Internet use and television subscription habits and linking the two sets of data together.

Third, certain website blocking technologies raise serious privacy concerns. An Ofcom review of site blocking noted:

To be successful, any process also needs to acknowledge and seek to address concerns from citizens and legitimate users, for example that site blocking could ultimately have an adverse impact on privacy and freedom of expression.

The privacy impact is particularly acute with respect to deep-packet inspection blocking. The Bell coalition proposal does not identify specific blocking technologies, but studies have shown a correlation between cheaper blocking systems and a greater likelihood of overblocking (IP address blocking and shallow packet inspection blocking), while more targeted systems such as DPI were more effective but also the source of privacy concerns.

Rather than enhancing privacy protection, the Bell coalition proposal puts it at greater risk, with the possibility of VPN blocking, incentives to monitor customer traffic, and the potential adoption of invasive site blocking technologies.

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Fair Dealing Support for News Reporting and Public Debate: The Case of Warman and National Post v. Fournier

Michael Geist Law RSS Feed - Thu, 2018/03/01 - 10:10

Having examined the importance of fair dealing for creators and freedom of expression, the fair dealing week posts continue with fair dealing and its support for news reporting and public debate. In recent months, some news organizations have taken aim at fair dealing, arguing that it is a detriment to journalism. For example, Peter Kvarnstrom of the Glacier Media Group has called for fair dealing reform:

Fair dealing within our Copyright Act is a significant detriment to journalism in Canada. Our creators and publishers pay to create content that many news aggregators, including the CBC, republish, copy, broadcast, and sell advertising without compensating the creator or the copyright holder. This must be addressed.

Yet news reporting is included as a fair dealing purpose precisely to ensure that copyright is not used to impede important journalism. Claims that fair dealing is a detriment to journalism fails to understand that newspapers are themselves active users of fair dealing. Reporting frequently builds on prior reports as “advancing the story” will often rely on fair dealing to use portions of previously published works.

A good example how fair dealing can facilitate public debate and foster active quotation, citation, and further news reporting without fear of infringement arose several years ago in the Warman and National Post v. Fournier case. The case involved postings of excerpts of newspaper articles and columns – as much as three full paragraphs out of an 11 paragraph piece – on an online chat board. The court ruled that the copying was insubstantial and did not even raise fair dealing issues. However, it noted that in the event the reproduction was viewed as substantial, it was still covered by fair dealing:

In the alternative, even if the reproduced portions of the Kay Work amount to a substantial part, I find that the respondents’ reproduction constitutes fair dealing for the purposes of news reporting, pursuant to section 29.2 of the Copyright Act.
 
The SCC’s decision in CCH sets out important guiding principles in applying the fair dealing exception.  The SCC emphasized at paragraph 48 that fair dealing is best understood as an integral part of the copyright regime and as a user’s right, rather than a defence.  In order to avail themselves of the exception the respondents must establish first, that the dealing was for one of the purposes articulated in section 29 of the Copyright Act, and second, that the dealing was fair.

The SCC stated in CCH, at paragraph 51, that the fair dealing purposes (in that case, research) “must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained.”  Applying this large and liberal interpretation to news reporting, I find that the respondents’ dealing in respect of the Kay Work falls within this purpose.  They posted the excerpts of the Kay Work on Free Dominion to promulgate the facts recounted in that article.  Thus, the first criterion for fair dealing is met.  The news reporting exception also requires that the source and author be mentioned, which is also satisfied in this case.

The court continued by assessing the six factors under fair dealing, concluding that “balancing all the factors together, I find that the reproduction of the Kay Work falls within the fair dealing exception for the purposes of news reporting.”

A vibrant public forum depends upon the ability to regularly cite, quote and engage with news publications. The inclusion of news reporting as a fair dealing purpose recognizes the critical importance of a free press and the need to ensure that copyright does not pose a barrier to news reporting. This approach is particularly important in the current news environment, where misleading, false or “fake” news often proliferates, requiring pointed, accurate reporting sets the record straight. Since effective responses often rely on quotation and citation, fair dealing emerges as an important legal tool in preserving the ability to engage with other works without fear of copyright liability.

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The Case Against the Bell Coalition’s Website Blocking Plan: Canadians Take a Stand Against Site Blocking

Michael Geist Law RSS Feed - Wed, 2018/02/28 - 10:28

The Bell playbook for its website blocking proposal has largely followed a familiar narrative. Much like the “Fair for Canada” campaign in 2013 that was designed to convince Canadians that keeping foreign competitors such as Verizon out of the country was in their best interest, the FairPlay Canada campaign similarly tries to make the case that a coalition of supporters want the CRTC to institute website blocking without court orders. The campaign clearly starts with Bell: they first raised the issue in September at a House of Commons committee hearing, obtained the legal opinion to support the application (it is addressed to Bell), and used a closely allied law firm to draft the application.

Proponents of the website blocking plan have relied heavily on character attacks (“anti-copyright”, demagoguery, etc.) to counter criticism of the plan. Yet move beyond the ad hominem attacks and the merits of the site blocking application quickly fall apart. As I have been recounting for the past two weeks – there are still more posts to come – the case against the website blocking proposal is very strong:

In addition to the substantive weakness of the proposal, proponents have been quick to criticize the thousands of people that have submitted interventions at the CRTC, while saying little about Bell’s astroturfing campaign in which employees were urged to submit comments to the regulator without any indication that they should disclose their corporate affiliation.

Today, Open Media has organized a day of action, with thousands more speaking out against the Bell coalition proposal led by a remarkably diverse group of companies and associations. When proponents argue that opposition to the site blocking is anti-copyright, in doing so they are now criticizing teachers (the Canadian Association of University Teachers), civil liberties groups (CCLA, BCCLA, BCFIPA, CJFE, Rocky Mountain CLA), privacy groups (Privacy and Access Council of Canada), digital rights groups (EFF, CIPPIC, Open Media), Internet providers (Iristell), technology and developer companies (Tucows), Internet groups (ISOC, Creative Commons), and many more. This principled opposition is not pro-piracy. Rather, it recognizes the fundamental Canadian values of freedom of expression and an open Internet alongside the fatal flaws of a proposal that would simply dispense with court orders as a benchmark requirement.

The CRTC consultation remains open until March 29th. Interested Canadians should take the time to learn more about the proposal, the mounting concerns, and provide their views to the Commission, their Member of Parliament, and the Minister of Innovation, Science and Economic Development Navdeep Bains.

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Why Fair Dealing Safeguards Freedom of Expression: The Case of the Vancouver Aquarium

Michael Geist Law RSS Feed - Wed, 2018/02/28 - 10:03

Having discussed the importance of fair dealing for creators in yesterday’s post, today’s case looks at the link between freedom of expression and fair dealing. A recent case involving the Vancouver Aquarium placed the spotlight on how fair dealing can be used to safeguard freedom of expression, even when (indeed particularly when) a rights holder may prefer to use copyright to block the expression. In 2015, two film makers created a documentary on the Vancouver Aquarium called “Vancouver Aquarium Uncovered.” The film, which can now be viewed online, focuses on whales and dolphins in captivity. The Vancouver Aquarium filed a copyright infringement action, seeking to have the documentary removed from all public viewings and the deletion of photos and video clips shot at the aquarium.

While a trial judge remarkably granted an interlocutory injunction, last year the B.C. Court of Appeal set it aside. Fair dealing and safeguards for non-commercial user generated content played an important role in the decision, with a unanimous court stating:

Fair dealing is not considered a defence, but an integral part of the Copyright Act: CCH at para. 48. It is more properly characterized as a “user’s right.” An act that is captured by the fair dealing provisions of the Act will not infringe copyright. As noted above, s. 29 of the Act sets out fair dealing for the purpose of research, private study, education, parody or satire, and use in that context does not infringe copyright. Section 29.1 exempts fair dealing for the purpose of criticism or review, and s. 29.2 exempts news reporting. Section 29.21 exempts non-commercial use, with specified conditions.

In order to sustain the balance between the users’ rights and those of the copyright owner, fair dealing “must not be interpreted restrictively”: CCH at para. 48. CCH addressed research in the context of headnotes and other additions by publishers to judgments, and whether permitting photocopying at a law library fell within the research exemption in fair dealing. In concluding that it did, McLachlin C.J.C. concluded that “research” was to be given a large and liberal interpretation to ensure that users’ rights are not “unduly constrained”: para. 51. It is not limited to non-commercial or private contexts.

The court did not issue a definitive conclusion – it limited its discussion to agreeing that fair dealing was not properly assessed at trial – the role of fair dealing and freedom of expression was crucial in the decision to set aside the injunction. Indeed, the court concluded:

Evotion created the documentary to contribute to the conversation on the social and political issue of keeping cetaceans in captivity. This is an unusual copyright case in that the injunction will, in part, silence criticism of the Aquarium and potentially stifle public debate on a topic of great interest to the community. In addition, the Aquarium is not seeking to protect works that are being unfairly used to profit others, such as was alleged in SOCAM.

On the other hand, it is clear that the debate regarding cetaceans in captivity continues, despite the injunction. It is a matter of public record that the Vancouver Park Board, earlier this year, voted to ban the bringing of new cetaceans to the Aquarium. More litigation may ensue from this, so no more need be said.

The engagement of s. 2(b) in the analysis also responds to the concerns of Animal Justice in terms of bringing the issue of cases of animal cruelty to the public’s attention. In my opinion, the balance of convenience lies with Evotion. The film is part of a public dialogue and debate on the issue of whether cetaceans should be kept in captivity, and thus, the Charter value of freedom of expression must weigh against granting the injunctive relief.

Critics frequently claim that licensing can adequately substitute for fair dealing, but the Vancouver aquarium case provides an important reminder that sometimes no amount of money will lead to a licence since rights holders seek to use the law to silence others. Fair dealing is an essential safeguard for freedom of expression since it is available as a user’s right without need for permission from the copyright owner.

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The Case Against the Bell Coalition’s Website Blocking Plan, Part 11: Higher Internet Access Costs for All

Michael Geist Law RSS Feed - Tue, 2018/02/27 - 10:26

The Bell website blocking coalition includes several Internet providers, but there are no smaller, independent ISPs. The absence of smaller ISPs that are essential to the government’s aspiration for greater Internet access competition is unsurprising given the costs associated with site blocking that can run into the millions of dollars with significant investments in blocking technologies and services, employee time to implement blocking mandates, and associated service issues. A mandated blocking system applied to all ISPs in Canada would have an uneven impact: larger ISPs will face new costs but may find it easier to integrate into existing systems (some already block child pornography images), whereas hundreds of smaller ISPs would face significant new costs that would affect their marketplace competitiveness. In fact, larger ISPs might ultimately benefit from higher fees passed along to subscribers and reduced competition.

The government has long emphasized the need to address Internet affordability concerns through greater competition. Earlier this month, Prime Minister Justin Trudeau told the House of Commons that “Canadians pay enough for their Internet.” Innovation, Science and Economic Development Minister Navdeep Bains echoed the same concerns in a speech last year:

Low-income Canadians spend a higher share of their household income on cellphone and Internet bills than high-income Canadians. So it’s not surprising that only 6 out of 10 low-income households in Canada have Internet service.  By contrast, virtually all households that earn $125,000 annually have it. This digital divide is unacceptable. It represents a real barrier to continued prosperity for Canadians. Every child who’s unable to do school assignments or download music online is one less consumer of your products and services. Each one of these children is potentially one less software developer for your industry – and one less job creator for our country.

The increased ISP costs arising from equipment, employee time, and service provider obligations (blocking-related and monitoring services often come from the same companies actively promoting website blocking) bears a strong resemblance to the earlier Canadian debates over lawful access. In a 2005 bill, the government identified the need for specific technical capabilities and acknowledged that the requirements would create new costs. In fact, the government chose to establish a three-year grace period for smaller ISPs with less than 100,000 subscribers due to concerns “the costs would have an unreasonable adverse effect on the business of the service providers.” While that lawful access bill did not pass, several years later, independent ISPs warned that reviving mandated network requirements would have major cost implications that could result in some being forced to shut down.

Estimating the costs of the site blocking plan is made more difficult by the lack of detail in the Bell coalition proposal. However, the experience elsewhere suggests that it could run into the millions of dollars. First, the risks of blocking increase with certain blocking technologies. A 2010 Ofcom study identified the correlation between cheaper blocking systems and a greater likelihood of overblocking (IP address blocking and shallow packet inspection blocking), while more targeted systems were more effective but also significantly more expensive for ISPs to implement (deep packet inspection is expensive, more targeted, and privacy invasive).

Larger ISPs in the UK disclosed their approximate costs in a 2014 case. For example, Sky Broadband spent over 100,000 pounds (costs described as “six figures”) to develop a website blocking system solely for IP right infringing website injunctions in 2011 and spent thousands more each month on monitoring costs. British Telecom spent over a million pounds on a DNS web-blocking system in 2012 and required more than two months of employee time on implementation. EE spent more than a million pounds on its web-blocking system and over 100,000 pounds every month for operations.

Canada already pays some of the highest fees for Internet and wireless access. The government has recognized universal, affordable access as a critical policy goal. While companies such as Bell and Rogers would stand to gain from blocking with higher fees passed along to subscribers and reduced marketplace competition, smaller ISPs would face a difficult economic challenge, with mandated website blocking risking the possibility of all Canadians facing higher monthly Internet bills.

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