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City Councils Strike Back in Bell Broadband Battle

Michael Geist Law RSS Feed - Tue, 2016/02/16 - 10:07

The Canadian battle over broadband services has taken an unexpected turn in recent weeks as Bell’s effort to win high profile support for its appeal of a crucial ruling issued by Canada’s telecom regulator appears to have backfired. After support from Toronto Mayor John Tory and Ottawa Mayor Jim Watson for the telecom giant came to light, city councillors in both cities fought back with motions rejecting the mayors’ positions and expressing support for more competitive Internet services.

My weekly technology law column (Toronto Star version, homepage version) notes that the issue started with a July 2015 Canadian Radio-television and Telecommunications Commission decision that extended policy measures designed to support independent Internet providers to emerging fast fibre connections. The ruling meant that Bell would be required to share their infrastructure with independent carriers on a wholesale basis. The policy guarantees Bell a profit on the connections, but also promotes increased competition that should provide consumers with more choice and better pricing.

Bell filed a cabinet appeal in the fall, hoping that the new Liberal government would overturn the CRTC decision. The Liberals have yet to articulate a clear position on the issue with the sole statement found in the mandate letter for Navdeep Bains, the Minister for Innovation, Science and Economic Development. It requires Bains to “increase high-speed broadband coverage and work to support competition, choice and availability of services, and foster a strong investment environment for telecommunications services to keep Canada at the leading edge of the digital economy”. The statement can be interpreted as offering encouraging words for both Bell and its opponents.

Leaving nothing to chance, Bell obtained support for its cabinet appeal from Tory and Watson, who wrote letters citing Bell’s planned investments in the cities and expressing concern that the commission ruling might delay or derail those plans. Conversely, the city of Calgary submitted a 28 page document supporting the CRTC ruling and explaining why increased competition was good for the city and consumers.

The difference between the Calgary submission and the Tory and Watson letters was not limited to policy matters. While the Calgary submission represented the city, the letters from the two Ontario mayors were not written on behalf of their cities but instead reflected their own personal views.

The distinction was not obvious to many, however, raising the ire of city councillors. First, Toronto Councillor Mike Layton introduced a motion expressing support for more competition and the CRTC decision. The motion also requested an opportunity to meet with Bains to discuss the issue. In a significant rebuke to Tory, it passed overwhelmingly with 28 in support and only five councillors opposed.

Emboldened by the Toronto motion, last week Ottawa city councillors tabled notice of their own motion. It also resolves that “the city of Ottawa support the CRTC’s decision to require the sharing of fiber-optic networks between large and small competitors.” A vote on the motion is expected in the coming weeks. Watson now acknowledges that he did not spend a lot of time on the issue.

Should the Ottawa city council vote in support of the CRTC decision, three of the biggest cities in Canada will have sent an important message to the federal government. First, there is significant support in large Canadian communities for policy measures that foster increased competition. As telecom companies invest in new networks, cities fear that failure to include mandated access requirements could result in higher prices and less choice for their residents.

Second, Internet access is a major policy and political issue that is attracting mounting attention at both the municipal and provincial levels. Given Bains’ recent emphasis on innovation, an aggressive plan to ensure that all Canadians have access to affordable, fast Internet services is an absolute must.

The post City Councils Strike Back in Bell Broadband Battle appeared first on Michael Geist.

City Councils Strike Back in Broadband Battle

Michael Geist Law RSS Feed - Tue, 2016/02/16 - 10:04

Appeared in the Toronto Star on February 14, 2016 as Cities Choose Sides in High-Speed Internet Battle

The Canadian battle over broadband services has taken an unexpected turn in recent weeks as Bell’s effort to win high profile support for its appeal of a crucial ruling issued by Canada’s telecom regulator appears to have backfired. After support from Toronto Mayor John Tory and Ottawa Mayor Jim Watson for the telecom giant came to light, city councillors in both cities fought back with motions rejecting the mayors’ positions and expressing support for more competitive Internet services.

The issue started with a July 2015 Canadian Radio-television and Telecommunications Commission decision that extended policy measures designed to support independent Internet providers to emerging fast fibre connections. The ruling meant that Bell would be required to share their infrastructure with independent carriers on a wholesale basis. The policy guarantees Bell a profit on the connections, but also promotes increased competition that should provide consumers with more choice and better pricing.

Bell filed a cabinet appeal in the fall, hoping that the new Liberal government would overturn the CRTC decision. The Liberals have yet to articulate a clear position on the issue with the sole statement found in the mandate letter for Navdeep Bains, the Minister for Innovation, Science and Economic Development. It requires Bains to “increase high-speed broadband coverage and work to support competition, choice and availability of services, and foster a strong investment environment for telecommunications services to keep Canada at the leading edge of the digital economy”. The statement can be interpreted as offering encouraging words for both Bell and its opponents.

Leaving nothing to chance, Bell obtained support for its cabinet appeal from Tory and Watson, who wrote letters citing Bell’s planned investments in the cities and expressing concern that the commission ruling might delay or derail those plans. Conversely, the city of Calgary submitted a 28 page document supporting the CRTC ruling and explaining why increased competition was good for the city and consumers.

The difference between the Calgary submission and the Tory and Watson letters was not limited to policy matters. While the Calgary submission represented the city, the letters from the two Ontario mayors were not written on behalf of their cities but instead reflected their own personal views.

The distinction was not obvious to many, however, raising the ire of city councillors. First, Toronto Councillor Mike Layton introduced a motion expressing support for more competition and the CRTC decision. The motion also requested an opportunity to meet with Bains to discuss the issue. In a significant rebuke to Tory, it passed overwhelmingly with 28 in support and only five councillors opposed.

Emboldened by the Toronto motion, last week Ottawa city councillors tabled notice of their own motion. It also resolves that “the city of Ottawa support the CRTC’s decision to require the sharing of fiber-optic networks between large and small competitors.” A vote on the motion is expected in the coming weeks. Watson now acknowledges that he did not spend a lot of time on the issue.

Should the Ottawa city council vote in support of the CRTC decision, three of the biggest cities in Canada will have sent an important message to the federal government. First, there is significant support in large Canadian communities for policy measures that foster increased competition. As telecom companies invest in new networks, cities fear that failure to include mandated access requirements could result in higher prices and less choice for their residents.

Second, Internet access is a major policy and political issue that is attracting mounting attention at both the municipal and provincial levels. Given Bains’ recent emphasis on innovation, an aggressive plan to ensure that all Canadians have access to affordable, fast Internet services is an absolute must.

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 City Councils Strike Back in Broadband Battle appeared first on Michael Geist.

The Trouble With the TPP, Day 30: Losing Our Way on Geographical Indications

Michael Geist Law RSS Feed - Fri, 2016/02/12 - 12:15

Geographical indications (GI) are signs used on goods – frequently food, wine, or spirits – that have a specific geographical origin and are said to possess qualities, reputation or characteristics that are essentially attributable to that place of origin. Given the quality associated with the product, proponents of GI protection argue that it is needed to avoid consumer confusion as well as to protect legitimate producers.

Europe has the most extensive geographical indication protections in the world. These include Protected Designation of Origin (PDO), which covers agricultural products produced, processed and prepared in a given geographical area using recognized know-how; Protected Geographical Indication (PGI), which covers agricultural products linked to the geographical area; and Traditional Speciality Guaranteed (TSG), which highlights traditional character, either in the composition or means of production. 

The net effect of the European system is that hundreds of items enjoy special legal protection.

What does this have to do with the TPP?

As part of the Canada – EU Trade Agreement, Canada agreed to expand protection for nearly 150 European geographical indications. However, CETA has still not been signed due to controversy over the investor-state dispute resolution provisions in the agreement, which have attracted significant European opposition. Canada and the EU are working on a compromise, but the failure to sign CETA before TPP raises the possibility of problems with the Canadian provisions on geographical indications. Moreover, several side letters indicate that at best a confusing, patchwork approach has been created.

Section E of the TPP’s intellectual property chapter establishes the legal protections for geographical indications. The U.S. is opposed to GI protection (it argues that trademarks can achieve the same thing) and wanted to use the TPP to help block European demands for GI protection. The section therefore creates several types of GI protection: protections for new GIs (very stringent requirements including the possibility of cancellation), protections for existing GIs (which are effectively grandfathered), and protections for new GIs due to existing international agreements, for which a couple of procedures are identified.

The most relevant provision for Canada involves the procedure for existing international agreements. Canadian negotiators clearly wanted to include CETA within the scope of the provision even though the deal is not concluded. Canada therefore likely inserted the following footnote:

For the purpose of this Article, an agreement “agreed in principle” means an agreement involving another government, government entity or international organisation in respect of which a political understanding has been reached and the negotiated outcomes of the agreement have been publically announced.

That sounds like CETA and reports indicate that Canadian officials believe this covers it. That would place the new European GIs under the procedures for existing international agreements. Article 18.36(2) states:

In respect of international agreements referred to in paragraph 6 that permit the protection or recognition of a new geographical indication, a Party shall

(a) apply paragraph 1(b) [which involves Internet postings of details on potential new GIs] ;
(b) provide an opportunity for interested persons to comment regarding the protection or recognition of the new geographical indication for a reasonable period of time before such a term is protected or recognised; and
(c) inform the other Parties of the opportunity to comment, no later than the commencement of the period for comment.

These provisions are designed to provide greater transparency with GIs, but does not include a clear opposition mechanism. However, there is another footnote that is creating some confusion:

In respect of an international agreement referred to in paragraph 6 that has geographical indications that have been identified, but have not yet received protection or recognition in the territory of the Party that is a party to that agreement, that Party may fulfil the obligations of paragraph 2 by complying with the obligations of paragraph 1.

The obligations of paragraph 1 include the possibility of opposition and cancellation of a GI. Some reports have speculated that Canada might have to follow this latter approach, though the word “may” suggests that either option is valid.

If that was not sufficiently complex, Canada also signed four side letters on GIs. The letters with Peru and Chile simply confirm that existing GI approach found in the Peru and Chile free trade agreements with Canada. The letter with Japan confirms the existence of GIs protected in each country and opens the door to new ones in the future. Most notably, the letter with Mexico identifies three Mexican GIs that are eligible for protection, but Canada reserves the right to use the TPP’s cancellation provisions. This letter may explain the confusing footnote that allows for two different compliance approaches.

By now, the legal complexity of this provision means that most readers will have stopped reading. Yet the Trouble with the TPP is that a trade agreement that is supposed to make things easier for business actually succeeds in making it more difficult. These rules will have a real-world impact on Canada and Canadian businesses, which will be left to grapple with numerous different legal approaches and commitments to GIs arising from domestic rules, the various trade agreements, and side letters with one-third of TPP members.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty)

The post The Trouble With the TPP, Day 30: Losing Our Way on Geographical Indications appeared first on Michael Geist.

Why Journalism is not Dying in the Digital Age

Michael Geist Law RSS Feed - Fri, 2016/02/12 - 10:20

The ongoing financial struggles of Canadian businesses that have traditionally delivered the news – particularly newspapers and local broadcasters – have generated considerable discussion and consternation over the past month. With significant layoffs, newspaper closures, and testimony before Canada’s broadcast regulator that the cost of delivering local news is unsustainable, there have been mounting calls for new funding programs, studies, or other measures to address the issue.

My weekly technology law column (Toronto Star version, homepage version) notes that much of the commentary emphasizes the critical link between a strong, independent media and holding governments at all levels to account for their actions. While there is little debate over the essential role of journalism, the tougher question is whether emerging digital alternatives can provide an effective substitute.

Many of the digital sources are still relatively young, but the combination of low entry barriers, the reach into new audiences, and innovative business models from new and established players suggest that it can.

The problems facing newspapers and local broadcasters is well chronicled. The aggregation of disparate information ranging from news to movie listings holds less appeal when the public has easy online access to each of the component parts. Important sources of income such as classified advertising dried up years ago in the face of free online alternatives, Internet advertising has grown dramatically and is expected to account for nearly half of all advertising revenues within a few years, and readership has gone digital, with many relying on their social networks to identify news or videos of interest.

Some have blamed the CBC, arguing that its digital platforms make it difficult for paywalled services to compete. Yet sources of digital competition extend far beyond just the CBC and stopping the public broadcaster from offering digital alternatives amounts to rendering it irrelevant in the digital age. Others have called for new government studies or funding programs, though the challenges associated with creating state-backed media have not been fully addressed.

The really difficult issue may not be how to fix a troubled sector – the experimentation ranging from innovative tablet editions to different subscription, funding, and advertising models will mean some adapt and some fail – but rather whether new government policies or regulation are needed at all.

Political news coverage is often viewed as the most critical in holding governments to account. Some have pointed to the regional decline of membership in the Parliamentary Press Gallery as evidence of the crisis, but it is more instructive to see how many new, digital-only organizations are investing in original political reportage.

The current gallery membership list includes newcomers such as Buzzfeed, the Huffington Post, the Tyee, Rabble and VICE. Moreover, there are a host of experienced freelance journalists whose work appears in many venues alongside specialty digital publications such as iPolitics, Blacklock’s Reporter, and the Wire Report.

The work of journalists at these publications – along with niche print sources and experts who blog or write independently – offers the chance to reach different audiences and to cover specialized issues in greater depth than is often found in larger newspapers that emphasize big picture concerns.

Local and regional reporting is also undergoing a significant transformation. The Tyee,  Torontoist, and AllNovaScotia are just some of the dozens of local, online publications that have used low entry barriers and cheap digital distribution to stake out their place in the media landscape. These local alternatives supplement national sources such as the National Observer and theRebel.com that offer political perspectives from both ends of the spectrum.

Those lamenting the decline of local broadcast news coverage need only look at the ratings to recognize that the shrinking audiences suggest diminishing interest in news delivered in that format. Online video offers cheaper distribution models that may lack some of the production qualities of conventional television but the chance for a more diverse audience at a fraction of the cost.

The uncertainty associated with digital models, the loss of jobs, and the future of some of Canada’s best-known media organizations unsurprisingly elicits sadness, apprehension, and concern. However, the emergence of new voices and the innovative approaches at older ones point to the likelihood that journalism is neither dead nor dying.

The post Why Journalism is not Dying in the Digital Age appeared first on Michael Geist.

Digital Era Raises Tough Questions About Journalism’s Future

Michael Geist Law RSS Feed - Fri, 2016/02/12 - 10:00

Appeared in the Toronto Star on February 8, 2016 as Digital Era Raises Tough Questions About Journalism’s Future

The ongoing financial struggles of Canadian businesses that have traditionally delivered the news – particularly newspapers and local broadcasters – have generated considerable discussion and consternation over the past month. With significant layoffs, newspaper closures, and testimony before Canada’s broadcast regulator that the cost of delivering local news is unsustainable, there have been mounting calls for new funding programs, studies, or other measures to address the issue.

Much of the commentary emphasizes the critical link between a strong, independent media and holding governments at all levels to account for their actions. While there is little debate over the essential role of journalism, the tougher question is whether emerging digital alternatives can provide an effective substitute.

Many of the digital sources are still relatively young, but the combination of low entry barriers, the reach into new audiences, and innovative business models from new and established players suggest that it can.

The problems facing newspapers and local broadcasters is well chronicled. The aggregation of disparate information ranging from news to movie listings holds less appeal when the public has easy online access to each of the component parts. Important sources of income such as classified advertising dried up years ago in the face of free online alternatives, Internet advertising has grown dramatically and is expected to account for nearly half of all advertising revenues within a few years, and readership has gone digital, with many relying on their social networks to identify news or videos of interest.

Some have blamed the CBC, arguing that its digital platforms make it difficult for paywalled services to compete. Yet sources of digital competition extend far beyond just the CBC and stopping the public broadcaster from offering digital alternatives amounts to rendering it irrelevant in the digital age. Others have called for new government studies or funding programs, though the challenges associated with creating state-backed media have not been fully addressed.

The really difficult issue may not be how to fix a troubled sector – the experimentation ranging from innovative tablet editions to different subscription, funding, and advertising models will mean some adapt and some fail – but rather whether new government policies or regulation are needed at all.

Political news coverage is often viewed as the most critical in holding governments to account. Some have pointed to the regional decline of membership in the Parliamentary Press Gallery as evidence of the crisis, but it is more instructive to see how many new, digital-only organizations are investing in original political reportage.

The current gallery membership list includes newcomers such as Buzzfeed, the Huffington Post, the Tyee, Rabble and VICE. Moreover, there are a host of experienced freelance journalists whose work appears in many venues alongside specialty digital publications such as iPolitics, Blacklock’s Reporter, and the Wire Report.

The work of journalists at these publications – along with niche print sources and experts who blog or write independently – offers the chance to reach different audiences and to cover specialized issues in greater depth than is often found in larger newspapers that emphasize big picture concerns.

Local and regional reporting is also undergoing a significant transformation. The Tyee, Torontoist, and AllNovaScotia are just some of the dozens of local, online publications that have used low entry barriers and cheap digital distribution to stake out their place in the media landscape. These local alternatives supplement national sources such as the National Observer and theRebel.com that offer political perspectives from both ends of the spectrum.

Those lamenting the decline of local broadcast news coverage need only look at the ratings to recognize that the shrinking audiences suggest diminishing interest in news delivered in that format. Online video offers cheaper distribution models that may lack some of the production qualities of conventional television but the chance for a more diverse audience at a fraction of the cost.

The uncertainty associated with digital models, the loss of jobs, and the future of some of Canada’s best-known media organizations unsurprisingly elicits sadness, apprehension, and concern. However, the emergence of new voices and the innovative approaches at older ones point to the likelihood that journalism is neither dead nor dying.

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 Digital Era Raises Tough Questions About Journalism’s Future appeared first on Michael Geist.

The Trouble With the TPP, Day 29: Cultural Policy Innovation Uncertainty

Michael Geist Law RSS Feed - Thu, 2016/02/11 - 11:02

This week’s lengthy Trouble with the TPP post focused on the likelihood that efforts to require online video providers to pay mandatory Cancon contributions would be challenged under the TPP. While I am not a supporter of extending contributions to companies like Netflix, including such a restriction within a trade agreement is bad policy. Today’s post continues with the culture theme, by examining the risk that other new policy innovations might also be stymied by the TPP.

The Globe and Mail’s Kate Taylor recently wrote a column arguing that Canadian cultural production is in crisis and calling for reforms to address the issue. For example, Taylor cited the possibility of tax credits for advertising on websites that meet a Canadian content threshold similar to the policy for television and radio broadcasters. ACTRA has long called for a similar policy, noting the benefits of tax deductions for advertising on Canadian-owned websites that give prominence to Canadian content.

But would such a policy pass muster on the TPP?  It’s not totally clear that it would.

Article 14.4 provides for non-discriminatory treatment of digital products:

No Party shall accord less favourable treatment to digital products created, produced, published, contracted for, commissioned or first made available on commercial terms in the territory of another Party, or to digital products of which the author, performer, producer, developer or owner is a person of another Party, than it accords to other like digital products

Digital products are defined as “a computer programme, text, video, image, sound recording or other product that is digitally encoded, produced for commercial sale or distribution, and that can be transmitted electronically.” That is a fairly broad definition given that it includes any digital product that is produced for distribution that can be transmitted electronically. Digital goods and services may often seem similar with the TPP footnote acknowledging that “the definition of digital product should not be understood to reflect a Party’s view on whether trade in digital products through electronic transmission should be categorized as trade in services or trade in goods.” In fact, if classified as a service, the national treatment provision discussed in the recent post could apply.

The Article 14.4 provision excludes government subsidies or grants, but there is no reference to tax credits or deductions. The provision is also subject to the “non-conforming measures”, which brings in the Canadian cultural exception. Cultural industries has a specific definition under the TPP exception:

For the purpose of this reservation, “cultural industries” means persons engaged in any of the following activities:
(a) the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
(b) the production, distribution, sale or exhibition of film or video recordings;
(c) the production, distribution, sale or exhibition of audio or video music recordings;
(d) the publication, distribution or sale of music in print or machine readable form; or
(e) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television and cable broadcasting undertakings and all satellite programming and broadcast network services.

There is no reference to the Internet within the definition. It certainly seems likely that the websites of broadcasters or newspapers would be covered by this definition, but Internet-only may be a different story. In fact, the North American Industry Classification System expressly excludes Internet-only products, treating the cultural industries as those covered by the TPP exception except when the product is exclusively on the Internet. Instead, Internet-only is treated as a separate industry group within the classification system.

The potential concern is therefore the possibility that Internet-only falls outside the cultural exception and is subject to the Article 14.4 requirements on non-discrimination of digital products. I consulted with two of Canada’s leading communications professors and asked for their views. Both acknowledged that there was no clear answer. One took the view that this might exclude Internet-only services, while the other thought the provision could be stretched to include them. Given this uncertainty, the problem is that if the Canadian government were to seek to extend tax credits to certain domestic sites, there is little doubt that it would run the risk of a TPP challenge from non-Canadian websites, thereby further limiting the government’s cultural policy options.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules)

The post The Trouble With the TPP, Day 29: Cultural Policy Innovation Uncertainty appeared first on Michael Geist.

How Does Zero-Rating Affect Mobile Data Usage?

Freedom to Tinker - Thu, 2016/02/11 - 00:08
On Monday, the Telecom Regulatory Authority of India (TRAI) released a decision that effectively bans “zero-rated” Internet services in the country. While the notion of zero-rating might be somewhat new to many readers in the United States, the practice is common in many developing economies. Essentially, it is the practice by which a carrier creates an […]

The Trouble With the TPP, Day 28: Privacy Risks From the Source Code Rules

Michael Geist Law RSS Feed - Wed, 2016/02/10 - 13:23

Yesterday’s Trouble with the TPP post examined some of the uncertainty created by the surprising e-commerce provision that involves restrictions on source code disclosures. KEI notes that governments have not been shy about requiring source code disclosures in other contexts, such as competition worries. Yet this rule will establish new restrictions, creating concerns about the implications in areas such as privacy. For example, security and Internet experts have been sounding the alarm on the risks associated with exploited wifi routers and pointing to source code disclosures as potential solution.

Dave Farber, former Chief Technologist of the Federal Communications Commission, warns:

Today, there are hundreds of millions of Wi-Fi routers in homes and offices around the globe with severe software flaws that can be easily exploited by criminals. While we agree with the FCC that the rules governing these devices must be updated, we believe the proposed rules laid out by the agency lack critical accountability for the device manufacturers.

How to address the issue?

Experts such as Vint Cerf, one of the founders of the Internet, recommend several precautions including source code disclosure:

Any vendor of software-defined radio (SDR), wireless, or Wi-Fi radio must make public the full and maintained source code for the device driver and radio firmware in order to maintain FCC compliance. The source code should be in a buildable, change-controlled source code repository on the Internet, available for review and improvement by all.

The TPP may create a barrier for this solution. If companies are unwilling to voluntarily release the source code, TPP governments will be restricted in their ability to mandate disclosure (absent a claim that all wifi routers are now critical infrastructure, a definition that renders the term largely meaningless).  The source code provision is unprecedented in an established trade agreement, fostering new worries about how it may limit the available responses to a growing privacy and security threat.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion)

The post The Trouble With the TPP, Day 28: Privacy Risks From the Source Code Rules appeared first on Michael Geist.

The Princeton Bitcoin textbook is now freely available

Freedom to Tinker - Tue, 2016/02/09 - 14:17
The first complete draft of the Princeton Bitcoin textbook is now freely available. We’re very happy with how the book turned out: it’s comprehensive, at over 300 pages, but has a conversational style that keeps it readable. If you’re looking to truly understand how Bitcoin works at a technical level and have a basic familiarity […]

The Trouble With the TPP, Day 27: Source Code Disclosure Confusion

Michael Geist Law RSS Feed - Tue, 2016/02/09 - 10:10

Another Trouble with the TPP is its foray into the software industry. One of the more surprising provisions in the TPP’s e-commerce chapter was the inclusion of a restriction on mandated source code disclosure. Article 14.17 states:

No Party shall require the transfer of, or access to, source code of software owned by a person of another Party, as a condition for the import, distribution, sale or use of such software, or of products containing such software, in its territory.

The provision is subject to some limitations. For example, it is “limited to mass-market software or products containing such software and does not include software used for critical infrastructure.” The source code disclosure rule is not found in any other current Canadian trade agreement, though leaked documents indicate that it does appear in a draft of the Trade in Services Agreement (TISA).

The provision has generated considerable uncertainty since key aspects are undefined. For instance, what is “mass market software or products containing such software”? There is no definition in the TPP nor a generally accepted definition for mass market software or products, meaning it could include software sold to businesses or software in mass market products.

The inclusion of “software used for critical infrastructure” is similarly open to interpretation, raising the possibility of conflicts between mass market software and critical infrastructure software. Indeed, Stewart Baker, the former general counsel at the NSA, has noted:

“the ban doesn’t apply to code run on critical infrastructure, which will make for endless disputes, since there’s very little mass market software that doesn’t run on computers involved in critical infrastructure.”

Baker’s concerns extend beyond the likelihood of confusion and disputes, as he also notes the long term risks of including this provision in a trade deal:

Right now, this is a measure US software companies want. That’s because we make most of the mass market software in the market. But that’s likely to change, especially given the ease of entry into smart phone app markets. We’re going to want protection against the introduction of malware into such software. The question of source code inspection is a tough one.  If other countries can inspect US source code, they’ll find it easier to spot security flaws, so the US government would like to keep other countries from doing that.  But I doubt US security agencies are comfortable letting Vietnam write apps that end up on the phones of their employees without the ability to inspect the source. In short, this is a tough policy call that is likely to look quite different in five years than it does today.

Confusion about the scope of the provision and worries about what it might mean longer term are just two of the concerns with the source code rule in the TPP. One more that brings in one of the founders of the Internet in tomorrow’s post.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies)

The post The Trouble With the TPP, Day 27: Source Code Disclosure Confusion appeared first on Michael Geist.

The Trouble With the TPP, Day 26: Why It Limits Canadian Cultural Policies

Michael Geist Law RSS Feed - Mon, 2016/02/08 - 12:24

The intersection between the TPP and Canadian cultural policies is likely to emerge as one of the more controversial aspects of the TPP, particularly given the government’s emphasis on a stronger cultural policy in its election platform. Earlier in the Trouble with the TPP series, I wrote that the TPP fails to protect Canadian cultural policy. I pointed to U.S. lobby pressure to limit Canadian protection of cultural policies as well as provisions that restrict Canada’s ability to consider expanding Cancon contributions to entities currently exempt from payment. I have not been a supporter of mandating Cancon contributions to online video provides such as Netflix, but restricting Canada’s right to do so in a trade agreement is shortsighted, bad policy.

Peter Grant has written a careful response to my post on Barry Sookman’s blog. He argues that Canada can still “maintain or enhance our cultural policies.” He opens by stating that “I am not entirely wrong” about the TPP being a departure from Canada’s traditional approach to culture in trade agreements. However, he argues that the TPP approach is not unique since the Canada – EU Trade Agreement adopts a similar approach. Yet CETA contains numerous cultural exceptions within the chapters for Cross-Border Trade in Services, Domestic Regulation, Government Procurement, Investment, and Subsidies. In the TPP, the exception references seven provisions in the entire agreement and many of the issues addressed by CETA are not covered. Further, the TPP has exceptions to the cultural exception not found in CETA and (as Grant notes) Canada did not get an explicit exception to allow for measures to allow domestic audio-visual content to be reasonably available as did Australia.

More importantly, he raises two main points on the issue of legal restrictions on cultural policy in the TPP. First, he points to Article 14.1 in the E-commerce chapter that mandates equal treatment for digital products. He notes that there is an exception for broadcasting and claims that this should be sufficient to cover online video services. Second, he argues that the exception on Cancon payments applies “in like circumstances” and that Netflix would not be compared to other broadcasters or broadcast distributors, but rather to other online video services (he also confirms that Canada could still apply GST to Netflix under the TPP, but that was never in dispute).

With respect, I don’t think either argument fully addresses the cultural policy implications of the TPP.

The applicability of equal treatment for digital products is an important provision that will be the subject of an upcoming post that examines further restrictions on Canadian cultural policy options. However, whether online video services fall outside the equal treatment provision because “broadcasting” can be broadly defined to include it is very much in question as Grant surely knows. Companies like Netflix have long maintained that they are not broadcasters as defined by the Broadcasting Act, a point emphasized in their appearance at the TalkTV hearing in 2014.  Indeed, both Netflix and Google have taken the position that they are not covered by the Act and both refused to comply with CRTC orders. It seems very unlikely that Canada could argue that activities not defined as broadcasting in its domestic legislation should be treated as broadcasting for the purposes of the TPP.

As for the exception to the cultural policy exception, it restricts “discriminatory requirements on services suppliers or investors to make financial contributions for Canadian content development.” The key question will be whether a mandated financial contribution on online video providers is discriminatory. I stated in my initial post that:

Assuming those services argue that any mandated Cancon contribution is discriminatory if they do not also receive the benefits accorded to established broadcasters or broadcast distributors, the TPP will effectively ban applying Cancon contributions to exempt entities.

Grant’s response is that it won’t be treated as discriminatory because the relevant test involves “like circumstances” which requires comparing treatment of all online video providers, not online video providers, broadcasters and BDUs. Yet it seems to me that the two most likely outcomes of the analysis lead to the same place: a finding of discriminatory payment requirements in violation of the TPP.

The “like circumstances” requirements can be found in Article 10.3 on National Treatment:

Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords, in like circumstances, to its own services and service suppliers.

What does “like circumstances” mean?  There is a footnote in the TPP that tries to provide a bit more context:

For greater certainty, whether treatment is accorded in “like circumstances” under Article 10.3 (National Treatment) or Article 10.4 (Most-Favoured-Nation Treatment) depends on the totality of the circumstances, including whether the relevant treatment distinguishes between services or service suppliers on the basis of legitimate public welfare objectives.

In other words, there is a need to examine the “totality of the circumstances.” One possibility would be to compare Netflix solely to Canadian online video providers such as Shomi or CraveTV as Grant suggests. However, the rules for even those services are different. The hybrid model recently adopted by the CRTC for the Canadian services would still leave room for argument that there are benefits differences between the services and that contribution requirements on Netflix would be discriminatory.

Even without the hybrid model, the links between the providers and the vertically integrated companies opens the door to a discrimination argument. Netflix flagged this issue in its TalkTV submission to the CRTC:

Unlike vertically-integrated carrier/BDU/broadcaster/ISPs that contribute to the CMF through their BDUs and VoD operations, and whose broadcaster affiliates have access to dedicated CMF funding envelopes in partnership with independent producers, Netflix, as a foreign entity, has no such access and cannot benefit from the CMF in a similar fashion. For Netflix, a contribution to the CMF would therefore amount to subsidizing productions made primarily for Bell, Rogers, Shaw/Corus and Videotron, who would acquire exclusive online streaming rights in addition to broadcast rights.

Given the direct link between the Canadian broadcasters/BDUs and Shomi/CraveTV, those concerns remain unchanged. Therefore, even limiting the comparison to online video services could result in a finding of discrimination.

Alternatively, the totality of the circumstances may mean comparing all the players that offer similar services to the public – ie. broadcasters, BDUs and online video providers. Grant seems to want it both ways: when discussing equal treatment for digital products, he says Netflix is a broadcaster like any other. However, when it comes to national treatment, he says it isn’t a broadcaster like other broadcasters. If Netflix is a broadcaster (which I’m not convinced it is), the case for discrimination is clear.  If it isn’t, there is still a strong case that the totality of the circumstances are different for it when compared to Shomi and CraveTV.

Finally, there are provisions in the TPP that are not subject to the “like circumstances” rule that would still restrict potential Canadian cultural policies. For example, the TPP includes a prohibition on local presence requirements in Article 10.6 not subject to like circumstances but covered by the exception to the Canadian cultural exception. The effect of this provision would be that even requiring a local presence in Canada as part of an effort to address online video providers would be out of bounds under the TPP.

While there is obviously room for interpretation, it seems certain that efforts to require online video providers to pay mandatory Cancon contributions would be challenged under the TPP. In fact, the limitations on Canada’s cultural policy options do not stop there. More on the cultural limits imposed by the TPP in an upcoming post.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty)

The post The Trouble With the TPP, Day 26: Why It Limits Canadian Cultural Policies appeared first on Michael Geist.

looks like it is up to the Conservatives

Fair Duty by Meera Nair - Sun, 2016/02/07 - 22:58

On Friday, counterpunch published a detailed article by Murray Dobbin, concerning the TransPacific Partnership (TPP) Agreement and what appears to be a fog of ignorance in the halls of our Federal Government. Dobbin writes:

[The] consultation process has not penetrated the ideological bubble created by … trade department officials. In spite of the fact that by far the biggest concern of critics of the deal (including Joseph Stiglitz and a United Nations report) is the Investor State Dispute Settlement (ISDS) feature (the one that allows corporations to sue governments for regulating) … [Minister Freeland] seems to be either ill-informed or misled about its impact.

Dobbin raises concerns as to how meaningful the Government’s purported consultations are proving to be. Apparently, in response to queries from Canadians concerned about ISDS, Global Affairs Canada has offered assurances that there is nothing to worry about. As quoted by Dobbin:

“With respect to Investor-State Dispute Settlement (ISDS), the TPP will not impair the ability of Canada or its partners to regulate and legislate in areas such as the environment, culture, safety, health and conservation. Our experience under the NAFTA demonstrates that neither our investment protection rules nor the ISDS mechanism constrain any level of government from regulating in the public interest.”

Dobbin does not hesitate to point out the utter falseness of such a statement; not only has ISDS been used repeatedly against Canada, but particularly to inhibit measures taken by Canada to address environmental concerns. (We can only wonder if our Minister of the Environment and Climate Change, the Honourable Catherine McKenna, has been made aware of this.)

Environmental concerns overlap with health concerns. To add another story to Dobbin’s account: a sad day it was, when Canadians’ health placed second to American profits. Briefly, in 1997 the Canadian government of the day banned a manganese-based gasoline additive (MMT), deeming it harmful to human health. MMT’s American producers, Ethyl Corporation, took issue with this decision. It claimed expropriation, an actionable offense under the ISDS framework brought in by NAFTA. Facing a $350 million challenge, the Canadian government opted to settle. To fulfill the terms of the settlement, the ban was reversed and the country left poorer by some $19 million dollars (more than the entire budget for Environment Canada’s regulatory and compliance efforts at that time).

These details, and much more, were provided by Ken Traynor (Canadian Environmental Law Association) in 1998:

Most of the industrialized world does not use MMT as an octane-enhancer in gasoline. It is banned in many of the most smog-prone areas of the United States, including California and much of the Eastern Seaboard. Eighty-five percent of US oil refiners have confirmed that they are not currently using MMT. Alternatives exist and they are not that expensive. … And we’d get better air as a bonus.

If NAFTA did not exist, MMT would still be banned in Canada. Ethyl would have had to convince the US government to go to bat for it with the Canadian government, or sue Canada in a Canadian court. In a Canadian court, a judge can balance corporate property rights with the public interest, something glaringly absent from the deliberations of NAFTA arbitration panels.

We have two physicians in our Cabinet, the Honourable Carolyn Bennet and the Honourable Jane Philpott. Are they aware that any progressive action they may wish to take, should first be evaluated to ensure a foreign investor will not see its expected profits diminish? For that matter, what does our Minister of Justice, the Honourable Jody Wilson-Raybould think of the operation of ISDS? To put it plainly, if multinational corporations may operate in Canada, removed from all obligations to observe Canadian regulation or judicial oversight, do our citizens have any recourse to justice?

Canadians’ best hope for detailed discussion in Parliament may lie in the hands of our Official Opposition. Granted, they are the party that championed the TPP (and its further entrenchment of ISDS), but as Rick Mercer pointed out last week,  current Conservative Members of Parliament have comfortably reversed their stance on a number of issues already. If our Loyal Opposition will continue with their self-induced amnesia, ISDS would be a worthy issue to confront.

All levity aside, a good starting point for all recently elected members of Parliament is an article by Lisa Sachs and Lise Johnson of the Columbia Center for Sustainable Investment. Published in November, through the Globe and Mail, Sachs and Johnson encouraged the new government to pay close attention to ISDS: “[In the TPP] we see a further evisceration of the role of domestic policy, institutions and constituents, and greater liabilities for governments and domestic stakeholders.”

 


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