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Government’s Expansion of PIPEDA in Budget Bill Raises Constitutional Questions

Michael Geist Law RSS Feed - Wed, 2015/05/27 - 08:48

The government’s omnibus budget implementation bill (Bill C-59) has attracted attention for its inclusion of copyright term extension for sound recordings and the retroactive changes to the Access to Information Act. Another legislative reform buried within the bill is a significant change to PIPEDA, Canada’s private sector privacy law. The bill adds a new Schedule 4 to PIPEDA, which allows the government to specify organizations in the schedule to which PIPEDA applies. Bill C-59 immediately adds one organization: the World Anti-Doping Agency (WADA), which is based in Montreal.

The change to PIPEDA is designed to address European criticism that WADA is not subject to privacy laws that meet the adequacy standard under EU law. WADA is currently subject to Quebec’s private sector privacy law, which meets the “substantial similarity” standard under Canadian law, but has not received an adequacy finding from Europe.  In June 2014, the EU Working Party that examines these issues released an opinion that raised several concerns with the provincial law. The goal of the criticism appears to be to deem Montreal unfit to host WADA and transfer its offices to Europe. The Canadian government wants to stop the privacy criticisms by deeming PIPEDA applicable to WADA. Since PIPEDA has received an adequacy finding, presumably the hope is that the legislative change will address the European concerns.

Leaving aside the obvious problem of burying privacy reforms in a budget bill (in fact, privacy, copyright, and access to information all within a single bill with little or no study of those reforms), the change is a potential target for a constitutional challenge. Given how the government has justified PIPEDA in the past, it is difficult to see how this change would pass constitutional muster.

When PIPEDA was first introduced in the late 1990s, the government was careful to limit its scope to commercial activities. The reason had to do with the constitution. Privacy law fits within the provincial power over property and civil rights. The federal government sought to regulate privacy on a national basis by relying on its trade and commerce power. That led to a model that limited application in the first three years to federally regulated entities and the creation of a “substantial similarity” model that allowed provinces to establish their own private sector privacy law. Quebec’s law pre-dates PIPEDA and has received the designation. Notwithstanding the attempt to limit its scope, Quebec immediately filed a constitutional challenge against the law (which has since remained largely dormant).

While there have even been some questions about relying on trade and commerce for PIPEDA, particularly after the Supreme Court of Canada decision involving a national securities regulator, there has never been any doubt that PIPEDA applies solely to commercial activities (Privacy Commissioner interpretation bulletin) as that is essential for the constitutional basis for the law. The problem with the Bill C-59 change is that it seeks to extend PIPEDA to non-commercial activities. The government states:

While PIPEDA provides clear rules for organizations in the context of commercial activity, it does not currently apply to organizations such as the World Anti-Doping Agency, an international, independent organization headquartered in Montreal. Economic Action Plan 2015 proposes to clarify through legislative and regulatory amendments that Canada’s privacy protection laws extend to organizations such as the World Anti-Doping Agency, thereby helping to ensure that all personal information they hold in Canada is adequately protected.

The government is free to amend legislation, but it is not free to ignore the constitution. Simply stating that WADA is now subject to PIPEDA is subject to challenge because to do so calls into question the constitutional foundation of the entire law. If PIPEDA applies to non-commercial activities, it needs a different constitutional basis. By encroaching on provincial powers – in this case seeking to impose a federal law where a provincial Quebec law applies – the government is proposing to solve one problem by creating a much bigger one.

The post Government’s Expansion of PIPEDA in Budget Bill Raises Constitutional Questions appeared first on Michael Geist.

Why The Copyright Board Decision Affirms Canadian Education’s Approach to Fair Dealing

Michael Geist Law RSS Feed - Tue, 2015/05/26 - 09:41

The Copyright Board of Canada delivered a devastating defeat to Access Copyright on Friday, releasing its decision on a tariff for copying by employees of provincial governments. Yesterday’s post provided a detailed review of the decision, including the Board’s findings on the limits of Access Copyright’s repertoire, the scope of insubstantial copying, and the proper interpretation of fair dealing.

The decision focused on copying within provincial and territorial governments, but much of the analysis can be easily applied within an education context. Indeed, since the Supreme Court of Canada 2012 copyright decisions, there has been a very public battle over the validity of fair dealing guidelines that have been widely adopted by the Canadian education community.  I’ve written several posts on the education consensus (here and here) and there are no shortage of the fair dealing guidelines readily available online.

Access Copyright has argued that “these new policies authorize and encourage copying based on a definition of ‘fair dealing’ that is not supported by the law. Instead, they represent what some of the education sector’s lawyers and administrators would like the law to be.” It filed a lawsuit against York University over its guidelines, claiming that the policy is unfair.

The Copyright Board’s decision puts to rest many of Access Copyright’s claims, confirming that all three branches of Canadian copyright are consistent on the issue of fair dealing: the legislature (2012 reforms that expanded fair dealing), the courts (the SCC pentalogy decisions that strongly endorsed fair dealing as a user right), and now the Copyright Board. Having rejected virtually all of Access Copyright’s arguments, the education community will look to the Board’s decision for additional guidance on fair dealing and confirmation that its approach is consistent with Canadian law.

The Board decision identifies a two-step process for users seeking to determine whether a licence is needed to use a work (in addition to public domain and open licensing considerations). First, users should consider whether the amount copied is insubstantial. If so, no further analysis is needed as no copyright event is triggered. The Board states that insubstantial copying is 1 to 2 pages of a work, not constituting more than 2.5 percent of the entire work. In other words, where two pages are copied from a work of 80 pages or more, or one page is copied from a work of 40 pages or more, the copying is insubstantial and not compensable.

Second, if more is copied, fair dealing may apply. As is well known, fair dealing involves a two-step test. The first is whether the dealing or use is for an appropriate purpose. This requires one of the purposes in the Act: research, private study, news reporting, criticism, review, education, parody, or satire. The Board states that in assessing this part of the test, all purposes receive a large and liberal interpretation. Moreover, the qualifying purpose need not be the predominant purpose (ie. there may be multiple purposes behind the dealing or use and the main one does not need to be one of the statutory purposes). So long as one of the purposes is found in the statute, the usage qualifies for the first part of the test. The Board also ruled that the purpose is that of the individual user, not the larger organization.

The second part of the test involves a six factor analysis to determine whether the dealing is more or less fair.  The Board offers some additional insights into each of these factors:

1.    Purpose

The Board characterized purpose in this part of the test as “goal” of the dealing. It confirmed that the purpose or goal may be for the benefit of someone else. It also ruled that there can be multiple goals or purposes without an impact on the fairness of the dealing.

2.    Character

The Board rejected an “aggregate” approach to determine the character of any particular dealing. It also confirmed that the correct approach is to examine the amount of copying by the individual copier, not the organization as a whole since the “dealings of one user should not tend to make the independent dealings of another user less fair.” It added that not destroying a copy after it is used does not favour unfairness.

3.    Amount

The Board provided some numbers to gauge whether the amount copied is fair. It stated that approximately 10 percent of a book in the context of research or private study tends toward fairness. Moreover, it accepted that an entire newspaper, journal or magazine article may have to be copied for the purpose of research or private study. Where an entire article was copied for the purpose of research or private study, while the amount of the dealing factor tends towards unfairness, it does not do so strongly. This analysis is consistent with the education fair dealing guidelines.

4.    Alternatives

The Board stated that alternatives to the dealing must be realistic and must not simply be the availability of a licence. It characterized Access Copyright’s claim that the availability of any alternative tended toward unfairness as “overly simplistic.” The Board acknowledged that “where a copy of a work has already been purchased, it may not be realistic to expect that a copy be purchased for every person who seeks to make a copy thereof.” Further, “the option of acquiring a one-time licence was not counted as a valid alternative.”

5.    Nature

Access Copyright argued that dealing with published works tends to make the dealing unfair. The Board disagreed. It noted that the works in question were published, but that “the natures of the works in this matter do not tend to make the dealing more or less fair. On the one hand, they are published works, and are not of a nature where further dissemination without the dealing is unlikely. On the other hand, they are not private writings where such dissemination could be undesirable.”

6.    Effect of the Dealing

Access Copyright argued that every dealing with a copyrighted work will be one where there was an opportunity for the copyright owner of the work to sell a one-time right to license that use. The Board continued the Supreme Court’s insistence that there be actual evidence of economic harm in order to assess the effect of the dealing. In this case, it noted that “no direct evidence that would permit us to ascertain with any certainty the effect of the dealing captured by the Volume Study on the works that were reproduced, and given that relying on aspects that have already been considered under other factors could have the effect of erasing proportionality from the fairness analysis, we find that this factor neither tends to make the dealings in the Volume Study more fair nor less fair.”

Access Copyright may seek judicial review of the decision (effectively appealing it), yet the ruling is based on a meticulous analysis of existing Canadian caselaw and largely upholds the position of the Canadian education community on fair dealing. For Access Copyright, the solution to its problems does not lie in further litigation nor in making claims based on what it would like the law to be. Rather, it comes from rapidly changing its business model to reflect what Parliament, the Supreme Court, and now the Copyright Board have ruled with respect to fair dealing.

The post Why The Copyright Board Decision Affirms Canadian Education’s Approach to Fair Dealing appeared first on Michael Geist.

A Licence With Limited Value: Copyright Board Delivers Devastating Defeat to Access Copyright

Michael Geist Law RSS Feed - Mon, 2015/05/25 - 09:06

The Copyright Board of Canada delivered a devastating defeat to Access Copyright on Friday, releasing its decision on a tariff for copying by employees of provincial governments. Access Copyright had initially sought $15 per employee for the period from 2005 – 2009 and $24 per employee for the period from 2010 – 2014. It later reduced its demands to $5.56 and $8.45. The board conducted a detailed review of the copying within government and the applicability of the Access Copyright licence. Its final decision gives Access Copyright pennies rather than dollars: 11.56 cents for 2005-2009 and 49.71 cents for 2010-2014.

The financial loss for Access Copyright in the case is obvious as it expected to earn millions from the tariff. With roughly 120,000 full time employees covered by the tariff, Access Copyright’s initial ask would have brought in $9 million in the first five years and another $14.4 million in the second five years for a total of almost $25 million (even its reduced ask envisioned nearly $9 million in revenues). Instead, the Board estimates that the total value of the tariff for the entire period will be $370,000, which is unlikely to cover Access Copyright’s legal and administrative costs (it also does not include revenues from the Province of Ontario, which struck an incredibly bad deal in 2011 by agreeing to pay $7.50 per year per employee).

Yet as bad as the specific outcome is for Access Copyright, the longer term implications are even worse. Revenues from government and corporate copying are useful, but bigger money lies with its education licenses. Those have been hit hard by the decision of universities, colleges, and school boards to abandon the licence in favour of fair dealing and alternative licensing. This decision notably addressed the core issues that lie at the heart of the battle between the education community and Access Copyright, as the Copyright Board strongly rejected Access Copyright’s interpretation of fair dealing and in the process provided the education community with clear support for its fair dealing guidelines.

The Access Copyright defeat on three key issues should have a significant impact on the education battle: repertoire, the breadth of insubstantial copying, and fair dealing.

1.    Repertoire

Access Copyright likes to claim its repertoire covers just about everything. As the Board notes, “Access considers in its repertoire almost all published works, without regard as to whether there is any relationship between the rights holder and Access.” How does it do this? It simply says that all published works are part of its repertoire or will be in the future. Where there is no agreement in place, it argues that the Board should “infer that agency relationships will eventually be formed.” In reasoning the Conservatives would love given their attempt to retroactively change the law on Access to Information, Access Copyright claims that once this happens, it will retroactively apply to the date on which it licensed the work.

The Board rejected the Access Copyright argument, noting that this will only occur for a tiny percentage of works:

Access can only send cheques, and thus be able to argue for the existence of an agency relationship, in relation to at most 0.005 per cent of copying from works of non-affiliated rights holders. Even if we were to accept the premise that the sending of a cheque by Access in relation to a copying event, and its subsequent cashing by the owner of copyright in the work copied, forms an agency relationship in relation to that particular copying event, it would remain that this would not happen for at least 99.995 per cent of the actual potentially compensable copying of works of non-affiliated rights holders that will occur during the Tariff period.

The Board therefore rejected those works that Access Copyright claims an “agency relationship”, code for no actual agreement. Moreover, the issue of repertoire was raised again with respect to digital copies, since Access Copyright has digital copying agreements with less than half of the collectives with which it has an agreement.

This aspect of the ruling could have enormous implications for other cases as it provides a roadmap for challenging the Access Copyright repertoire and its claims to represent all published works and to cover digital copying rights.

2.    Insubstantial copying

While much of the discussion on copyright exceptions focuses on fair dealing, there is only a need to even consider exceptions when the amount of copying involves a substantial part of the work. By implication, an insubstantial amount does not give rise to a copyright claim. I raised the issue in a blog post last year that noted that Copyright Board was considering whether a few pages or small percentage of a book is insubstantial.

In this case, Access Copyright argued that everything was substantial, claiming that a test based on the number of pages would not address the qualitative aspect of the portion taken. It also argued that since it offers per-page transactional licences, one page cannot be insubstantial. The Board rejected Access Copyright’s arguments clearing the way for up to two pages to be treated as insubstantial. It rejected the licensing claim, noting that “Access cannot alter the scope of protection granted by the Act by its business practices.” It further set a standard for insubstantial copying: 1 to 2 pages of a work, not constituting more than 2.5 percent of the entire work:

In this matter, without the benefit of a qualitative analysis of each of the copied works, and without even knowing which portions of a work were copied, in our opinion the amounts proposed by the Consortium, being 1 to 2 pages of a work, are reasonable approximations in establishing non-substantiality. However, since 1 to 2 pages of a short work can amount to a great portion of that work, we further limit this approximation by requiring that the copying of 1 to 2 pages not constitute more than 2.5 per cent of the entire work, the percentage equivalent to what the Board had previously considered not to be substantial reproductions in its Satellite Radio Services decision.

The effect of this ruling is that where two pages are copied from a work of 80 pages or more, or one page is copied from a work of 40 pages or more, the copying is insubstantial and not compensable. In fact, for those copies, there is no need to even consider fair dealing as there is no copyright claim for such small amounts of copying.

3.    Fair Dealing

The fair dealing analysis is the most important part of the decision since it represents the first time that Access Copyright’s restrictive fair dealing theories have been assessed by the Board. The outcome is a huge loss for the copyright collective as the Board rejected argument after argument. Some of the most important ones include:

Access Copyright Argues…
Copyright Board Rejects…
All six fair dealing factors must be raised in order to claim that the dealing is fair. No. “It is possible to evaluate the fairness of a dealing without evidence on every factor.” The fair dealing user is the government, not the individual employee making the copy. No, the user is the individual employee. Research is the only fair dealing purpose that benefits from a large and liberal interpretation. No, all fair dealing purposes receive a large and liberal interpretation. The first step purpose test in fair dealing should include a “predominant purpose” analysis such that the predominant purpose must be one of the enumerated purposes in the Act. No, it is enough that one of the purposes be for a permitted purpose. Since one of the purposes of the use was often for government administration (by government employees), this made the dealing unfair. No, citing the CCH decision for the view that the research can be conducted for the benefit of someone other than the user. The government was “hiding” behind the employee’s permitted purposes. No. The aggregate number of copies should be calculated when considering the character of the dealing (the same argument it makes in education). No, the “dealings of one user should not tend to make the independent dealings of another user less fair.” The fact that copies were often not destroyed made the dealings unfair. No, not destroying a copy after it is used does not favour a finding of unfairness. Copying more than two pages from a book or one page from an article would tend to make the dealing unfair. No. Approximately 10 percent of a book in the context of research or private study tends toward fairness. Where an entire article was copied for the purpose of research or private study, while the amount of the dealing factor tends towards unfairness, it does not do so strongly. The availability of any other alternative tends toward unfairness. Disagree in many ways: “Where a copy of a work has already been purchased, it may not be realistic to expect that a copy be purchased for every person who seeks to make a copy thereof.” “The option of acquiring a one-time licence was not counted as a valid alternative.” With the regard to nature of the work, dealing with published works tends to make the dealing unfair. No. “Generally, the natures of the works in this matter do not tend to make the dealing more or less fair. On the one hand, they are published works, and are not of a nature where further dissemination without the dealing is unlikely. On the other hand, they are not private writings where such dissemination could be undesirable.” Every dealing with a copyrighted work will be one where there was an opportunity for the copyright owner of the work to sell a one-time right to license that use. “no direct evidence that would permit us to ascertain with any certainty the effect of the dealing captured by the Volume Study on the works that were reproduced, and given that relying on aspects that have already been considered under other factors could have the effect of erasing proportionality from the fairness analysis, we find that this factor neither tends to make the dealings in the Volume Study more fair nor less fair.”

 

There is a lot here, but the key point is that Access Copyright tested the same fair dealing theories that it uses when contesting the education communities’ fair dealing approach. It lost on every claim. Indeed, the Board’s approach is consistent with the fair dealing guidelines that have been adopted by universities, colleges, and K-12 schools.

None of this should come as a surprise. Access Copyright frequently engages in fear mongering when it claims there is great uncertainty with respect to fair dealing. As the Board’s decision demonstrates, there is no such uncertainty. The ruling is grounded in decisions from the Supreme Court of Canada and would be predictable to virtually anyone who has reviewed the existing copyright caselaw.

The Access Copyright reaction to the decision states that is “deeply concerned” and “assessing all appeal options.” It also bitterly claims that the decision “disregards the importance of licensing income to creators and publishers in the digital economy.” Yet anyone that takes the time to read the 184 page decision will know this to be false.

The Copyright Board painstakingly reviewed copy after copy to ensure that they were all fairly compensated. As had been readily apparent for years, the problem facing Access Copyright is not that copies are not valued, but rather that its licence is not valuable. The Board’s analysis makes it clear that the licence only applies in a tiny number of circumstances given a reasonable reading of fair dealing, insubstantial copying, alternative licensing, and a repertoire that has limits. It is a big loss for Access Copyright that foreshadows an even bigger loss when the education issues are resolved.

The post A Licence With Limited Value: Copyright Board Delivers Devastating Defeat to Access Copyright appeared first on Michael Geist.

An empirical study of Namecoin and lessons for decentralized namespace design

Freedom to Tinker - Thu, 2015/05/21 - 14:13
[Let’s welcome to Freedom to Tinker first-year grad student Miles Carlsten, who, with fellow first-years Harry Kalodner and Paul Ellenbogen, worked on a neat study of Namecoin. — Arvind Narayanan] Namecoin is a Bitcoin-like cryptocurrency that aims to create a secure decentralized namespace — that is, an online system that maps names to values, but without […]

The story behind the picture of Nick Szabo with other Bitcoin researchers and developers

Freedom to Tinker - Thu, 2015/05/21 - 09:35
Reddit seems to have discovered this picture of a group of 20 Bitcoin people having dinner, and the community seems intrigued by Nick Szabo’s public presence. It’s actually an old picture, from March 2014. I was the chief instigator of that event, so let me tell the story of how that amazing group of people happened […]

Canadian Piracy Rates Plummet as Industry Points to Effectiveness of Copyright Notice-and-Notice System

Michael Geist Law RSS Feed - Wed, 2015/05/20 - 10:02

Canada’s copyright notice-and-notice system took effect earlier this year, leading to thousands of notifications being forwarded by Internet providers to their subscribers. Groups such as the Canadian Recording Industry Association argued during the legislative process that notice-and-notice would “pose a long-term problem”, yet the evidence suggested that the system could be effective in decreasing online infringement. Since its launch, there have been serious concerns about the use of notices to demand settlements and to shift the costs of enforcement to consumers and Internet providers. With Industry Canada officials emphasizing that “there is no obligation for Canadians to pay settlement demands,” it is clear that there is still a need for the missing regulations, including a prohibition on the inclusion of settlement demands within the notices.

While the problems with notice-and-notice must be addressed, the leading notice sender says that they are proving to be extremely effective in reducing piracy rates. In fact, the system has proven so successful that a consortium of movie companies now want the U.S. to emulate the Canadian approach. According to CEG TEK, there have been “massive changes in the Canadian market” under notice-and-notice. They claim that piracy rates have dropped by the following rates in Canada:

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

Some of the decrease may be attributable to the inclusion of settlement demands, but the evidence has long suggested that the notices alone have an education effect that leads to a significant reduction in infringement. Within a matter of months, that has apparently been the case in Canada. Given the plummeting Canadian piracy rates, U.S. film companies that once derided the Canadian system now argue that U.S. ISPs should adopt it.

The post Canadian Piracy Rates Plummet as Industry Points to Effectiveness of Copyright Notice-and-Notice System appeared first on Michael Geist.

Missing the Target: Why Does Canada Still Lack a Coherent Broadband Goal?

Michael Geist Law RSS Feed - Tue, 2015/05/19 - 09:28

The foundation of any national digital policy is affordable high-speed Internet access. Given the importance of the Internet to education, culture, commerce, and political participation, most countries have established ambitious targets to ensure that all citizens enjoy access to reasonably priced broadband services.

My weekly technology law column (Toronto Star version, homepage version) notes the importance of broadband is typically taken as a given, but Canadian broadband policy remains discouragingly incoherent and unambitious. The government and the Canadian Radio-television and Telecommunications Commission have different targets, while the government has established relatively slow speed goals that will still leave three-quarters of a million Canadians without access.

The inconsistent broadband goals are difficult to understand. The CRTC’s 2015-2016 Priorities and Planning Report target for broadband access is 5 megabits per second download for 100 per cent of the population by the end of 2015. Meanwhile, the government’s target will take many more years to complete and does not envision universal access.

Last summer, Industry Minister James Moore promoted the government’s commitment to broadband access with “Connecting Canadians”, a program to bring Internet access to 280,000 Canadians without access or with slower speeds. According to a government release, by 2017 the $305 million investment would extend access at 5 megabits per second to 98 per cent of Canadian households. The department no longer talks about 2017. According to Industry Canada’s recently released 2015-2016 Report on Priorities and Planning, the target date for the 280,000 Canadians with new or faster access is March 2019.

Not only are there significant differences between the CRTC (100 per cent access by 2015) and the government (98 per cent access by 2019) with respect to broadband targets, but both targets now pale in comparison with those adopted elsewhere. For example, the CRTC’s U.S. counterpart, the Federal Communications Commission, now defines broadband as 25 megabits per second, far faster than the Canadian target. Indeed, faster targets are the norm with Canada broadband goal presently slower than most other developed countries.

Canada established a national broadband task force in 2001, but nearly 15 years later still suffers from a policy that leaves some Canadians without affordable access. Why has broadband policy been such a failure?

At least part of the answer lies in the fact that the government broadband target has been developed in a manner that virtually guaranteed that Canada would fall short. For much of the past decade, officials developed detailed maps that identified the remaining communities without access and followed up with programs to improve access in those areas. While that marginally improved access rates, the approach resembled an accounting exercise, where the access data and available funds were tallied up and officials unveiled a “reasonable” target based on available budget.

Such an approach was presumably designed to avoid the embarrassment that might arise by failing to meet the broadband targets. Yet the real embarrassment is the failure to set goals that ensures that all Canadians have affordable access. Canada has been home to a range of programs and hopeful announcements (including last week’s spectrum auction results) that never quite reach the intended target with more ambitious goals or regulatory measures largely absent from the Canadian landscape.

New spectrum allocation might help, but more promising is the upcoming CRTC comprehensive review of telecom policy. The review will examine many aspects of telecommunications, but the question of whether universal access should be defined to include broadband offers perhaps the best chance to place Canada’s digital policy on a more stable foundation since it might finally require establishing policies mandating affordable broadband access for all Canadians.

The post Missing the Target: Why Does Canada Still Lack a Coherent Broadband Goal? appeared first on Michael Geist.

Why Does Canada Still Lack a Coherent Broadband Target?

Michael Geist Law RSS Feed - Tue, 2015/05/19 - 09:25

Appeared in the Toronto Star on May 16, 2015 as Why is Canada Lagging Behind With Its Broadband Goals?

The foundation of any national digital policy is affordable high-speed Internet access. Given the importance of the Internet to education, culture, commerce, and political participation, most countries have established ambitious targets to ensure that all citizens enjoy access to reasonably priced broadband services.

The importance of broadband is typically taken as a given, but Canadian broadband policy remains discouragingly incoherent and unambitious. The government and the Canadian Radio-television and Telecommunications Commission have different targets, while the government has established relatively slow speed goals that will still leave three-quarters of a million Canadians without access.

The inconsistent broadband goals are difficult to understand. The CRTC’s 2015-2016 Priorities and Planning Report target for broadband access is 5 megabits per second download for 100 per cent of the population by the end of 2015. Meanwhile, the government’s target will take many more years to complete and does not envision universal access.

Last summer, Industry Minister James Moore promoted the government’s commitment to broadband access with “Connecting Canadians”, a program to bring Internet access to 280,000 Canadians without access or with slower speeds. According to a government release, by 2017 the $305 million investment would extend access at 5 megabits per second to 98 per cent of Canadian households. The department no longer talks about 2017. According to Industry Canada’s recently released 2015-2016 Report on Priorities and Planning, the target date for the 280,000 Canadians with new or faster access is March 2019.

Not only are there significant differences between the CRTC (100 per cent access by 2015) and the government (98 per cent access by 2019) with respect to broadband targets, but both targets now pale in comparison with those adopted elsewhere. For example, the CRTC’s U.S. counterpart, the Federal Communications Commission, now defines broadband as 25 megabits per second, far faster than the Canadian target. Indeed, faster targets are the norm with Canada broadband goal presently slower than most other developed countries.

Canada established a national broadband task force in 2001, but nearly 15 years later still suffers from a policy that leaves some Canadians without affordable access. Why has broadband policy been such a failure?

At least part of the answer lies in the fact that the government broadband target has been developed in a manner that virtually guaranteed that Canada would fall short. For much of the past decade, officials developed detailed maps that identified the remaining communities without access and followed up with programs to improve access in those areas. While that marginally improved access rates, the approach resembled an accounting exercise, where the access data and available funds were tallied up and officials unveiled a “reasonable” target based on available budget.

Such an approach was presumably designed to avoid the embarrassment that might arise by failing to meet the broadband targets. Yet the real embarrassment is the failure to set goals that ensures that all Canadians have affordable access. Canada has been home to a range of programs and hopeful announcements (including last week’s spectrum auction results) that never quite reach the intended target with more ambitious goals or regulatory measures largely absent from the Canadian landscape.

New spectrum allocation might help, but more promising is the upcoming CRTC comprehensive review of telecom policy. The review will examine many aspects of telecommunications, but the question of whether universal access should be defined to include broadband offers perhaps the best chance to place Canada’s digital policy on a more stable foundation since it might finally require establishing policies mandating affordable broadband access for all Canadians.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Why Does Canada Still Lack a Coherent Broadband Target? appeared first on Michael Geist.

Harper Letter to Music Canada on Budget Day Confirms Copyright Extension the Product of Industry Lobbying

Michael Geist Law RSS Feed - Fri, 2015/05/15 - 11:35

The government’s decision to extend the term of copyright for sound recordings in the budget may have taken most copyright observers by surprise, but not the music industry. I’ve posted earlier on their extensive lobbying efforts on the issue and how the extension will reduce competition, increase costs for consumers, and harm access to Canadian Heritage. The record of lobbyist meetings gives a hint of the reasons behind the extension, but a letter sent by Prime Minister Stephen Harper that I recently obtained suggests that it all it took was a letter from Music Canada President Graham Henderson to the Prime Minister.

The Harper letter was sent on April 21, 2015, the day the budget was tabled. It states:

Thank you for your recent letter regarding the copyright term for sound recordings. I have reviewed this material carefully, and share your view that the current term of copyright protection for sound recordings falls short of what is required to protect artists and ensure they are fairly compensated for their work.

Please know that, as announced today in Budget 2015, our Government will extend copyright protection for sound recordings from 50 to 70 years. The extension will be incorporated into the Budget Implementation Act, and will be in effect immediately upon passage of the legislation.

The letter is remarkable as it confirms that the copyright term extension for sound recordings was strictly the product of behind-the-scenes industry lobbying with no broader public consultation or discussion. While other countries spent years debating the issue with careful study, the Canadian government simply caved on the issue based on a little lobbying from foreign record labels. The Conservative government did not consult with Canadian companies or retailers about the impact of their changes, nor did they dig into the data that would have revealed that this change will decrease revenues for many artists. Instead, the major record labels pulled out all the stops to block competitive new records from entering the marketplace and the Prime Minister obliged by including copyright reforms in a budget bill.

The post Harper Letter to Music Canada on Budget Day Confirms Copyright Extension the Product of Industry Lobbying appeared first on Michael Geist.

Balsillie’s Call for Patent Troll Reform: RIM Co-Founder Pushes For Made-in-Canada IP Policies

Michael Geist Law RSS Feed - Fri, 2015/05/15 - 09:34

Research in Motion co-founder Jim Balsillie wrote a lengthy article on Canadian innovation policy last week that focused primarily on intellectual property policy. While the article would have benefited from some editing, Balsillie’s core argument is that Canada needs to do a better job of identifying and protecting domestic interests when it is developing intellectual property policy.

There is much to agree with in the Balsillie piece. For example, he rightly criticizes the 2012 Canadian copyright reform bill as primarily a response to U.S. pressure:

As a major creator and distributor of creative content, the United States has a great deal to gain from lobbying for rules making it illegal to enjoy American creative work without new licences. Canada recently passed the Copyright Modernization Act, which was created in response to U.S. government and corporate interests working in a sophisticated fashion to advance American interests at the expense of other countries, including our own.

Disturbing WikiLeaks cables from the 2005-2009 period show systemic and effective lobbying by U.S. officials, who pressured Canadian politicians to implement stricter copyright laws. Cables from 2006 show Canada’s industry minister promising the U.S. ambassador that final copyright legislation “would be in line” with American priorities. Another cable, from 2009, recounts a senior Industry Canada policy official asking a U.S. counterpart to put public pressure on Canada to create the needed justification to give Washington what it wanted.

Our policy-makers need a reminder that Canada’s interests are not served this way. Without a domestic innovation lobby that can vouch for the interests of Canadian ideas and creative content, Canadian politicians are inadvertently legislating in American interests.

There were many good aspects in the copyright bill, but the most contentious issue – legal protection for digital locks, better known as anti-circumvention rules – perfectly fits Balsillie’s description. Ironically, the recent decision to extend the term of copyright for sound recordings demonstrates that the same dynamic is still at play, since it is the major international record companies that lobbied for the change at the expense of Canadian consumers and small businesses.

Having endured a costly patent fight with NTP Inc. that cost RIM hundreds of millions of dollars, Balsillie unsurprisingly saves the bulk of his recommendations for patent reform. These include:

A judicial strategy is a critical place to start. Canada’s Federal Court could be given greater powers to combat unacceptable behaviour by domestic and foreign “patent trolls” – companies that do not make or sell a product but sue other companies for patent infringement based on existing patent rights the troll has secured. New legislation could allow for injunctions to prevent a troll from filing a U.S. lawsuit while Canada’s Federal Court rules on whether the Canadian company has infringed on an asserted patent. Trolls could be required to be much more specific about how the target company’s product infringes on the patent troll’s claim – right now they can send out threat letters with general claims of infringement – and they could face sanctions when they are found to be using bad-faith tactics. Canada’s Competition Bureau could be given the power to target anti-competitive activity.

There are some good ideas here. Yet the problem is that Canadian business leaders cautioned against these kinds of reforms when they were consulted on these issues just last year. As I reported last fall, Industry Canada conducted a consultation on patent troll issues with leaders from companies such as Blackberry, IBM, Bombardier, Microsoft, and Cisco. Balsillie was at the February 2014 meeting where Industry Minister James Moore stressed the government’s willingness to address patent troll concerns. In fact, the government provided a detailed discussion document that raised the possibility of implementing some of the toughest anti-patent troll reforms in the world. That sounds much like the Balsillie ask with government taking the lead on potential policy reforms and working with stakeholders to gauge their interest.

Despite the opportunity to give the green light to combat patent trolls, the Canadian business community urged caution. According an internal summary document on the discussions, Balsille indicated that he supported the intent of the patent troll reforms. But others were less supportive: the Canadian Chamber of Commerce expressed concern with the reforms, arguing that the measures could legislate against legitimate assertion of patent rights and that they could create a chilling effect, while Cisco warned that the reforms “could do more harm than good.”

The document included reforms that are virtually identical to the ones Balsillie mentions in his recent piece. For example, the government document identified potential changes that would grant the Federal Court the power to issue injunctions to stop patent trolls from forum shopping or amendments to the Competition Act to give the Competition Bureau the power to target anti-competitive activity by patent trolls. Moreover, Balsillie talks about new specificity requirements for patent troll demand letters, which the government also raised, noting the possibility of a new prohibition against demand letters that are intentionally ambiguous or designed to induce a settlement without considering the merits of the claim.

Balsillie efforts to raise awareness of intellectual property reform are well taken. However, the problem lies with the Canadian business community – many of whom are subsidiaries of larger U.S. multi-nationals – that were less than enthusiastic about much needed patent troll reforms when given the chance to act just last year.

The post Balsillie’s Call for Patent Troll Reform: RIM Co-Founder Pushes For Made-in-Canada IP Policies appeared first on Michael Geist.

No End in Sight: CISAC Calls for Another Canadian Copyright Term Extension

Michael Geist Law RSS Feed - Thu, 2015/05/14 - 10:26

I’ve written multiple posts on the government’s surprise decision to extend the term of copyright for sound recordings without public consultation or discussion (surprise, cost to consumers, limited competition, reduced access to Canadian heritage, lobbying impact). In recent days, a further implication has arisen: other groups are now demanding that the government extend other terms of copyright within the law.  If the government agrees to those demands, it would result in all works, including books and music, being locked out of the public domain for decades.

CISAC, the International Confederation of Societies of Authors and Composers, has publicly chastised the Canadian government for not also extending the term of copyright for authors to life plus 70 years. The current term of protection in Canada is life of the author plus an additional 50 years. That meets the standard found in international copyright treaties and is what is used in a wide of range of countries including Japan, New Zealand, China, South Africa. Indeed, the majority of people around the world live in systems with copyright protection of less than life plus 70 years.

The president of CISAC states:

“Authors in Canada still do not benefit from the same term of copyright protection as in most of the world, where protection for authors extends to 70 years after their death, while in Canada the term of protection for authors expires 50 years after the author’s death. This puts the whole community of creators in Canada, as well as foreigners seeking protection in Canada, at a major disadvantage. On behalf of CISAC and the four million creators represented by its members, I call upon the Canadian government to address this imbalance and immediately bring Canada’s law in line with the rest of the world.”

As noted above, it is simply wrong to stated that Canada’s law is not in line with the rest of the world. While the demands for yet another copyright term extension were predictable, the Canadian government should reject the opportunistic attempt to lock down copyright works for decades beyond the current term of protection.

The post No End in Sight: CISAC Calls for Another Canadian Copyright Term Extension appeared first on Michael Geist.

Why the CRTC Fell Short in Addressing Canada’s Wireless Woes

Michael Geist Law RSS Feed - Wed, 2015/05/13 - 09:10

The competitiveness of Canadian wireless services has been the source of an ongoing and contentious debate for years. Last week, Canada’s telecom regulator concluded that there is a competitiveness problem, yet in a decision surprisingly applauded by many groups, declined to use much of its regulatory toolkit to address the problem. Instead, it placed a big bet on the prospect of a smaller wireless carrier somehow emerging as a fourth national player.

My weekly technology law column (Toronto Star version, homepage version) notes that the Canadian Radio-television and Telecommunications Commission began investigating the wholesale wireless services market in 2013. The big three wireless companies – Bell, Rogers, and Telus – argued that the market was competitive and that no regulatory action was needed. By contrast, new entrants such as Wind Mobile called for regulated roaming rates so that they could offer viable national services with more affordable connectivity wherever their customers roam.

On the issue of competitiveness, the CRTC decision is damning: the big three maintain wholesale rates and the ability to impose terms and conditions that would not prevail if Canada had a competitive market. Given their market power, it concluded that regulation is needed and it will therefore establish a process for setting the wholesale roaming rate. That move should allow the new entrants to more affordably offer national service to their customers and turn them into more effective competitors.

While that was enough to generate supportive comments from Industry Minister James Moore, the new entrants, and some consumer groups, the reality is that the CRTC could have done far more to address the Canadian competitiveness problem. For example, smaller wireless companies had asked for “seamless roaming” to ensure that customers that move in and out of networks do not experience dropped calls. The Commission rejected the request, meaning that dropped calls will continue and will place the new entrants at a competitive disadvantage.

An even bigger disappointment was the CRTC’s decision to sidestep mandating access for mobile virtual network operators, or MVNOs. 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. MVNOs such as Canadian-owned Ting have become a hit in the United States but are not even available in Canada.

The CRTC acknowledged that MVNOs can help create a more competitive environment. Further, it determined that the big three possess market power for wholesale access for MVNOs.  In other words, they have the ability to charge uncompetitive rates or simply avoid selling to MVNOs altogether.

Yet despite the opportunity to inject more competition into the marketplace, the CRTC decided against mandating MVNO access, arguing that it might “discourage continued investment by wireless carriers, because they could rely on this access rather than investing in their own mobile wireless network infrastructure.”

Given the success stories in other countries, it is hard to believe that the commission still believes claims that MVNO access would discourage ongoing investment by wireless carriers who emphasize each quarter the scope of their investments and breadth of their spectrum holdings. With the MVNO market in Canada stuck on the sidelines, business analysts were quick to raise their ratings for the big three, noting that the CRTC ruling would likely keep new competitors out of Canada.

The CRTC decision smacks of the regulator asserting that it knows best what competition should look like, namely a fourth wireless player that offers an economically viable if somewhat inferior national service. That vision falls well short of a vibrant, competitive market with as many players and as many different services as possible. Further, it makes it likely that Canadian consumers will have marginally more choice in wireless services, but will be left looking with envy at other countries that feature a wider variety of business models and pricing options.

The post Why the CRTC Fell Short in Addressing Canada’s Wireless Woes appeared first on Michael Geist.

CRTC Falls Short on True Wireless Competition

Michael Geist Law RSS Feed - Wed, 2015/05/13 - 09:01

Appeared in the Toronto Star on May 9, 2015 as CRTC Falls Short on True Wireless Competition

The competitiveness of Canadian wireless services has been the source of an ongoing and contentious debate for years. Last week, Canada’s telecom regulator concluded that there is a competitiveness problem, yet in a decision surprisingly applauded by many groups, declined to use much of its regulatory toolkit to address the problem. Instead, it placed a big bet on the prospect of a smaller wireless carrier somehow emerging as a fourth national player.

The Canadian Radio-television and Telecommunications Commission began investigating the wholesale wireless services market in 2013. The big three wireless companies – Bell, Rogers, and Telus – argued that the market was competitive and that no regulatory action was needed. By contrast, new entrants such as Wind Mobile called for regulated roaming rates so that they could offer viable national services with more affordable connectivity wherever their customers roam.

On the issue of competitiveness, the CRTC decision is damning: the big three maintain wholesale rates and the ability to impose terms and conditions that would not prevail if Canada had a competitive market. Given their market power, it concluded that regulation is needed and it will therefore establish a process for setting the wholesale roaming rate. That move should allow the new entrants to more affordably offer national service to their customers and turn them into more effective competitors.

While that was enough to generate supportive comments from Industry Minister James Moore, the new entrants, and some consumer groups, the reality is that the CRTC could have done far more to address the Canadian competitiveness problem. For example, smaller wireless companies had asked for “seamless roaming” to ensure that customers that move in and out of networks do not experience dropped calls. The Commission rejected the request, meaning that dropped calls will continue and will place the new entrants at a competitive disadvantage.

An even bigger disappointment was the CRTC’s decision to sidestep mandating access for mobile virtual network operators, or MVNOs. 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. MVNOs such as Canadian-owned Ting have become a hit in the United States but are not even available in Canada.

The CRTC acknowledged that MVNOs can help create a more competitive environment. Further, it determined that the big three possess market power for wholesale access for MVNOs.  In other words, they have the ability to charge uncompetitive rates or simply avoid selling to MVNOs altogether.

Yet despite the opportunity to inject more competition into the marketplace, the CRTC decided against mandating MVNO access, arguing that it might “discourage continued investment by wireless carriers, because they could rely on this access rather than investing in their own mobile wireless network infrastructure.”

Given the success stories in other countries, it is hard to believe that the commission still believes claims that MVNO access would discourage ongoing investment by wireless carriers who emphasize each quarter the scope of their investments and breadth of their spectrum holdings. With the MVNO market in Canada stuck on the sidelines, business analysts were quick to raise their ratings for the big three, noting that the CRTC ruling would likely keep new competitors out of Canada.

The CRTC decision smacks of the regulator asserting that it knows best what competition should look like, namely a fourth wireless player that offers an economically viable if somewhat inferior national service. That vision falls well short of a vibrant, competitive market with as many players and as many different services as possible. Further, it makes it likely that Canadian consumers will have marginally more choice in wireless services, but will be left looking with envy at other countries that feature a wider variety of business models and pricing options.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post CRTC Falls Short on True Wireless Competition appeared first on Michael Geist.

CMRRA Confirms Denial of Licences for Public Domain Recordings

Michael Geist Law RSS Feed - Tue, 2015/05/12 - 10:09

CMRRA, the Canadian Musical Reproduction Rights Agency, recently wrote to the Toronto Star and the Hill Times to respond to one of my columns which focused on the lobbying and denial of licensing effort to stop cheaper public domain recordings from entering the Canadian market. The column reported that CMRRA had issued a “pay as you press” licence for the recordings to ensure that creators were paid for the works still in copyright. CMRRA was later ordered to stop issuing the licence.

CMRRA writes that the column’s statement that record labels ordered the denial of licences is “patently false”. Dig deeper into the letter and it becomes clear that CMRRA confirms that it denied the licence, but takes issue with the claim that it was record labels that ordered it to do so. In the case of the Beatles recordings, it was Sony/ATV, which is jointly owned by Sony and the Michael Jackson Estate that ordered the denial of licence. Sony also owns one of the world’s largest record labels.

Beyond the clarification that it was Sony/ATV, not Sony Music that issued the order, the CMRRA letter confirms the key points in the column.  First, it confirms that there was denial of licence as it states that it was instructed “to refrain from issuing licences for certain products that had either recently been, or were about to be, released in Canada”. Second, it confirms that the denial of licence results in less revenue for songwriters, noting “as for the copyright owners of the songs embodied in those master recordings – that is, the songwriters and/or music publishers – it is their own choice to refuse to grant such licences and forego any potential associated revenue.”

The post CMRRA Confirms Denial of Licences for Public Domain Recordings appeared first on Michael Geist.

Bitcoin faces a crossroads, needs an effective decision-making process

Freedom to Tinker - Mon, 2015/05/11 - 09:42
Joint post with Andrew Miller. Virtually unknown outside the Bitcoin community, a debate is raging about whether or not to increase the maximum size of Bitcoin blocks. Blocks are created in Bitcoin roughly once every ten minutes and are currently limited to a size of 1 megabyte, putting a limit on the rate at which […]
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