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CRTC Says No To Internet Fast and Slow Lanes

Michael Geist Law RSS Feed - Mon, 2015/02/09 - 11:26

Appeared in the Toronto Star on January 31, 2015 as CRTC Says No Internet Fast and Slow Lanes

With the United States embroiled in a heated battle over net neutrality – millions have written to the U.S. regulator to support rules to prohibit Internet providers from creating fast lanes and slow lanes that would treat similar content in different ways – observers might want to take a closer look at how Canada has emerged as a leader in the area.

The Canadian Radio-television and Telecommunications Commission established net neutrality rules (referred to as Internet traffic management practices) in 2009, relying on bedrock principles that prohibit carriers from granting themselves undue preferences or from interfering with content. The rules share many similarities with those being debated in the U.S., yet the Canadian experience illustrates that they can be used to curtail unfair practices without bringing the Internet to a halt.

The most recent application of the Canadian rules came last week, with the CRTC issuing a landmark decision on the legality of mobile television services offered by Bell and Videotron. In a classic David vs. Goliath showdown, the complaint was filed by Ben Klass, a University of Manitoba graduate student, who noted that Bell offers a $5 per month mobile TV service that allows users to watch dozens of Bell-owned or licensed television channels for ten hours without affecting their data cap.

By comparison, users accessing the same online video through a third-party service such as Netflix or YouTube would be on the hook for a far more expensive data plan since all of the data usage would count against their monthly cap. That approach appeared to grant Bell an unfair advantage over the competitor video services (Videotron was later added to the case based on similar concerns).

Bell raised several arguments in response, claiming that the mobile television services were subject broadcast regulation (not telecom regulation) and that, in any event, the offering was good for consumers and should be encouraged.

The CRTC ruled that mobile television services effectively invoke both broadcast and telecom regulation, since a data connection is required to access the service. Indeed, it agreed with Klass that “from a subscriber’s perspective, the mobile TV services are accessed and delivered under conditions that are substantially similar to those of other Internet-originated telecommunications services.”

Given the application of telecom regulation, the Commission examined whether the Bell and Videotron approach violated the rules that prohibit carriers from granting themselves an undue preference or created an unreasonable disadvantage for competitors. It concluded that it did, noting that the services “may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice.” In light of that finding, the CRTC ordered Bell and Videotron to eliminate the unlawful practice by the spring.

The decision was clearly grounded with net neutrality principles in mind. CRTC Chair Jean-Pierre Blais, speaking prior to the release of the decision, stated that there would be “no fast and slow lanes”, adding that “at its core, this decision isn’t so much about Bell or Vidéotron. It’s about all of us and our ability to access content equally and fairly, in an open market that favours innovation and choice.”

Yet despite the endorsement of the principles of net neutrality, the decision did not apply the 2009 rules, which were viewed as inapplicable. Instead, the Commission went back to first principles to conclude that the service was simply an undue preference.

That points to an evolving net neutrality framework in Canada that includes analysis of both the net neutrality rules and the principles of undue preference. The combination leaves Canada with an even stronger net neutrality framework that better safeguards new innovative services and that will leave U.S. net neutrality advocates looking north with envy.

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 Says No To Internet Fast and Slow Lanes appeared first on Michael Geist.

In Defence of the CRTC’s Super Bowl Advertising Ruling

Michael Geist Law RSS Feed - Fri, 2015/02/06 - 11:21

Last week’s CRTC decision to ban simultaneous substitution from the Super Bowl broadcast starting in 2017 has generated mounting criticism in recent days. While analysts initially noted that the lost revenue for Bell Media would not be material (a prediction borne out by a quarterly conference call where the decision was not raised by anyone), anger over the decision has continued to grow. Nothing compares with Kevin O’Leary, a Bell Media commentator, ranting against the decision on Bell-owned BNN as he repeatedly calls the CRTC “insane” and laments lost foreign investment into a sector that still has Canadian ownership requirements. However, with Bell seeking private meetings with CRTC Commissioners to discuss the decision and more serious critiques from CMPA’s Michael Hennessy and Cartt.ca’s Greg O’Brien, the decision has clearly left many unhappy.

If the critics are right, the CRTC decision is the “beginning of the end of the system”, erodes the value of rights, and will lead to job losses and less Canadian content. It is undoubtedly true that changes are coming to the Canadian broadcasting system, but this simsub decision is at best a small part of the reason. The post raises six points in response to the decision and the critics.

First, this decision should not come as a surprise. The CRTC telegraphed the outcome months ago when it released a working document for discussion in advance of the TalkTV hearings. The document identified two options on simultaneous substitution: total elimination or removal for live event programming such as the Super Bowl. Broadcasters and creator groups argued against the complete removal of simultaneous substitution and the Commission went with a slimmed down version of its second option.

Second, the suggestions that the removal of simultaneous substitution eradicates rights or eliminates the ability of a Canadian broadcaster to air their own commercials is at odds with the experience of most other major sporting events. The Stanley Cup finals, the World Series, the Olympics, and World Cup are just some of the major events where Canadians have a choice between a Canadian and U.S. feed. Canadians often opt for the Canadian version, perhaps because they like the commentators or the Canadian-oriented coverage. No one suggests that the Canadian availability of the Stanley Cup finals on NBC or the World Series on Fox (Sportsnet uses the international feed) eradicates rights or eliminates the ability for a Canadian broadcaster to successfully air the same event.

With the elimination of simultaneous substitution, Canadians will have a choice between the U.S. feed and a Canadian feed. If the two are identical, many may opt for the U.S. feed to experience the commercials. If Bell Media uses the opportunity to compete with local content (there were two Canadian players in this week’s Super Bowl and at least two former CFL players), many may prefer the Canadian feed (provide different commentators during the years that CBS broadcasts the game with Phil Simms and many will make the switch).

Third, it is surprising to see advocates of the Canadian broadcast system argue that YouTube provides a viable substitute for those seeking access to the missing U.S. content. The commercials are available online, but as the CRTC rightly notes, their inclusion in the broadcast is often part of the experience. This is more than just a minor inconvenience. For some, it is part of the experience that is missed in Canada (more than half of U.S. viewers watch commercials as much as the game). For example, the PSA on domestic abuse broadcast in the U.S. during this year’s Super Bowl offered an important education opportunity that was absent in Canada.

Fourth, this is not the beginning of the end of simultaneous substitution. The beginning of the end of simultaneous substitution started years ago. The growth of specialty channels, which now represent a far bigger slice of the broadcasting revenue pie than conventional channels, heralded the decreasing importance of simultaneous substitution with fewer programs substituted and subscription revenue surpassing conventional television advertising revenue. Moreover, consumers gaining increasingly control over what they watch and when they watch it contribute to its declining importance. Recording television shows or watching them on demand eliminates the simultaneous substitution issue. Watching streamed version of the shows directly from broadcasters or through services like Netflix does the same.

I argued for the elimination of simultaneous substitution in this December 2013 piece, noting that the policy trades additional revenue for loss of control over the Canadian programming schedule and turns the Canadian system into a country-wide U.S. affiliate with hundreds of millions of dollars spent on the rights to non-Canadian programming. The CRTC recognized that eliminating simultaneous substitution altogether would still create a shock to the system. Limiting the elimination to the Super Bowl may be incoherent policy (ie. why just the Super Bowl), but it has the practical benefit of starting to move the industry off the addiction to U.S. programming and toward competition rather than regulatory protection.

Fifth, the arguments over lost jobs or less content point to the need for changes to the financing of Canadian programming, not retention of problematic policies. For broadcasters, there are clearly potential short term losses, however, revenues in the television broadcast system are over $6 billion. The CRTC estimates the value of simultaneous substitution at $250 million. That is not an insignificant hit, but the cost of U.S. programming may decline as a result (being worth less to Canadian broadcasters) and broadcasters will be encouraged to compete more effectively with original content.

From the creator perspective, the success of broadcasters and broadcast distributors is still viewed as the prime source of funds for Canadian content creation. This leads creator groups to argue against almost anything that might lead to declining broadcaster revenue, regardless of the wider implications. Moreover, it means that success is often measured by obtaining funding, rather than other potential metrics such as viewers or foreign distribution. As an industry beholden to regulations, it is unsurprising that many fear change.

Yet imposing old regulations on new, innovative services will not stop the broader societal and technological shifts in viewing habits. It is up to the industry to shift away from reliance on regulatory support. Further, the reality is that taxpayers – not broadcasters and broadcast distributors – still represent the largest source of financing in Canada. The CMPA’s annual report states that financing of television production came from the following sources:

  • Private broadcaster licence fees – 20%
  • Public broadcaster licence fees – 11%
  • Federal tax credits – 10%
  • Provincial tax credits – 18%
  • Canadian distributor – 11%
  • Foreign – 8%
  • Canada Media Fund – 13%
  • Other public – 1%
  • Other private – 8%

The public portion of this: public broadcaster licence fees (11%), federal and provincial tax credits (28%), Canada Media Fund (6.5% federal contribution), and other public (1%). The total is 46.5%, slightly more than the Canadian private contribution (45.5%).

Looking ahead, the private broadcaster portion may well decline. Arguments to shift the burden to Internet providers or companies like Netflix are non-starters. If eliminating simultaneous substitution from the Super Bowl leads to greater attention to competing in the global market, that is an outcome that should be welcomed, not rejected.

Sixth, the CRTC is doing exactly what it said it would: “placing Canadians at the centre of the communication system.” The criticism over the decision boils down to broadcasters and creator groups arguing that Canadians should not be able to see what they want during the broadcast because doing so hurts their bottom lines. That is not placing Canadians at the centre of the broadcast system, which the CRTC has tried to do with its decision on Super Bowl broadcasts.

The post In Defence of the CRTC’s Super Bowl Advertising Ruling appeared first on Michael Geist.

No future for you: cultural institutions can’t afford to play along with pointy-headed bosses

My new Guardian column, Go digital by all means, but don't bring the venture capitalists in to do it, is an open letter to the poor bastards who run public institutions, asking them to hold firm on delivering public value and not falling into the trap of running public services "like a business."

When you let regulators and politicians bully you into excluding the public from their own institutions, alienating the public that you need on your side to stave off the next round of cuts -- and the next.

In the story of market-driven public institutions, it’s we, the public, who are the angel investors. We paid to keep the archives growing, to put a roof over the museum, to amass and catalogue all of our nation’s cultural treasures (and the treasures of many other nations). The internet now makes it possible for those institutions to reach wider audiences than ever before, at lower costs than ever before – once their collections are digitised. When Siemens or another big company comes along to digitise our investments, they are the VCs putting in late-stage capital after we’ve borne all the risks, sometimes for centuries. If our management team – led by David Cameron, the self-styled MD of UK plc – offers these investor-come-latelies the lion’s share of the equity (that is, access to those treasures) for their paltry, late-stage capital, then he is in gross dereliction of his duty to us, the shareholders.

But of course, this is a stupid story. We don’t invest in public service institutions because we want them to be profitable. We invest in them because we want them to be good. Galleries, museums, archives and libraries tell us who we are. Schools and hospitals tend our minds and bodies. They are not businesses. We are not shareholders.

We have private archives, private schools, private healthcare, and private libraries. They cream off the easiest, most profitable, least onerous part of the public service remit. As austerity tightens and market logic crushes our institutions, many have become private/public hybrids, charging for some of their services, or selling off some of their treasures, or forcing the public to fit within the metrics demanded by the zealots of UK plc.

This is suicide. There is no amount of capitulation that will save your institution. If your archive charges the public to access its own memories, who will argue to keep it funded when the next round of cuts comes along? People who can’t afford to pay for your archive won’t stand up for it. People who can afford to pay for archival services already have private firms to serve them – why would they vote for their tax money to support another for-pay service?

Go digital by all means, but don't bring the venture capitalists in to do it

(Image: Villa A - the archive, TheGuyCalledDennis, CC-BY)

archives,libraries,education,neoliberalism,class war,politics,

DRM-free audiobook of Eastern Standard Tribe

Blackstone audio has produced a professional, DRM-free audiobook of my 2003 novel EST, a novel about jet-lag, conspiracies, management consultants, crypto-contracts and P2P that William Gibson called "Utterly contemporary and deeply peculiar -- a hard combination to beat (or, these days, to find)"

Warren Ellis called it "just far enough ahead of the game to give you that authentic chill of the future, and close enough to home for us to know that he’s talking about where we live as well as where we're going to live; a connected world full of disconnected people. One of whom is about to lobotomise himself through the nostril with a pencil. Funny as hell and sharp as steel."

As with my other books, Audible refuses to carry this title because I won't allow them to use DRM on it. You can get it at Downpour, where all audiobooks are DRM-free. I'd really appreciate it if you'd share this with your audiobook-loving friends and encourage them to vote with their wallets for businesses that let artists choose whether their works should be locked down with DRM.

In Partial Defense of the Seahawks’ Play Calling

Freedom to Tinker - Mon, 2015/02/02 - 09:30
The conventional wisdom about last night’s Super Bowl is that the Seahawks made a game-losing mistake by running a passing play from the Patriots’ one yard line in the closing seconds. Some are calling it the worst Super Bowl play call ever. I disagree. I won’t claim it was the right call, but I do […]

2014’s best science fiction and fantasy

Locus magazine has published its annual recommended

I was delighted and honored to find that my stories "Petard" (from Twelve Tomorrows) and "The Man Who Sold the Moon" (from Hieroglyph) (excerpt) made the cut (both have also been selected for several of this year's Year's Best anthos, for which I am extremely grateful!).

For me, the publication of the Locus List always marks the day when I fill in my Hugo nominations ballot, using it to jostle my memory and figure out which works I want to put forward. If you're interested in my own eligible works, they're the two stories above (best novelette and novella, respectively), "Information Doesn't Want to Be Free" (best related work) and "In Real Life" (with Jen Wang) (best graphic novel).

Here's the sf novels on this year's list:

* Ultima, Stephen Baxter (Gollancz; Roc 2015)
* War Dogs, Greg Bear (Orbit US; Gollancz)
* Shipstar, Gregory Benford & Larry Niven (Tor; Titan 2015)
* Chimpanzee, Darin Bradley (Underland)
* Cibola Burn, James S.A. Corey (Orbit US; Orbit UK)
* The Book of Strange New Things, Michel Faber (Hogarth; Canongate)
* The Peripheral, William Gibson (Putnam; Viking UK)
* Afterparty, Daryl Gregory (Tor; Titan)
* Work Done for Hire, Joe Haldeman (Ace)
* Tigerman, Nick Harkaway (Knopf; Heinemann 2015)
* Europe in Autumn, Dave Hutchinson (Solaris US; Solaris UK)
* Wolves, Simon Ings (Gollancz)
* Ancillary Sword, Ann Leckie (Orbit US; Orbit UK)
* Artemis Awakening, Jane Lindskold (Tor)
* The Three-Body Problem, Cixin Liu (Tor)
* The Causal Angel, Hannu Rajaniemi (Tor; Gollancz)
* The Memory of Sky, Robert Reed (Prime)
* Bête, Adam Roberts (Gollancz)
* Lock In, John Scalzi (Tor; Gollancz)
* The Blood of Angels, Johanna Sinisalo (Peter Owens)
* The Bone Clocks, David Mitchell (Random House; Sceptre)
* Lagoon, Nnedi Okorafor (Hodder; Saga 2015)
* All Those Vanished Engines, Paul Park (Tor)
* Annihilation/Authority/Acceptance, Jeff VanderMeer (FSG Originals; Fourth Estate; HarperCollins Canada)
* Dark Lightning, John Varley (Ace)
* My Real Children, Jo Walton (Tor; Corsair)
* Echopraxia, Peter Watts (Tor; Head of Zeus 2015)
* World of Trouble, Ben H. Winters (Quirk)

2014 Locus Recommended Reading List

Nine awesome Bitcoin projects at Princeton

Freedom to Tinker - Fri, 2015/01/30 - 11:39
As promised, here are the final project presentations from the Bitcoin and cryptocurrency technologies class I taught at Princeton. I encouraged students to build something real, rather than toy class projects, and they delivered. I hope you’ll find these presentations interesting and educational, and that you build on the work presented here (I’ve linked to the projects […]

a $3.5 billion reminder

Fair Duty by Meera Nair - Sun, 2015/01/18 - 19:19

Investor-State Dispute Settlement (ISDS) reappeared in the news last week. Writing for Toronto Star, Les Whittington alerts Canadians that our country is on the receiving end of a claim of $3.5 billion by the owner of the Ambassador Bridge which connects Windsor and Detroit. “Matty Moroun … is claiming damages from Ottawa in connection with Canada’s plan to help build a second bridge linking Ontario to Michigan at Detroit.”

It is the ISDS mechanism established within the North American Free Trade Agreement (NAFTA) that is providing the avenue of complaint for Moroun. I have written about ISDS before (most recently, see here); in essence, foreign corporations have recourse to sue governments, via private tribunal, when government or judicial actions of the home country are deemed to compromise the foreign investment. ISDS was introduced ostensibly to provide security to corporations when dealing in countries with less-than-robust systems of law, but has now become part and parcel of most bi-lateral or multi-lateral trade agreements. The recently agreed upon Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, and the pending Trans-Pacific Partnership (TPP) which is described as the largest trade agreement negotiated outside of the World Trade Organization, are no exceptions. From a Canadian perspective though, it is perplexing that any government of Canada should embrace the continuance of ISDS in trade agreements.

Whittington draws from a newly–released compilation of actions against NAFTA governments, authored by Scott Sinclair for the Canadian Centre for Policy Alternatives (CCPA), to observe that, disproportionately, Canada receives most of the action. It could be argued that Canadian trade with the United States is of higher volume than that of Mexico, and thus such proportion is inevitable. One could also argue that Canada’s past commitments to public-wellbeing are more likely to impede a laissez-faire mantra, and that is why we attract unwanted attention. A day after Whittington’s article, Thomas Walkom also weighed in via Toronto Star: “… 69 of the 77 complaints made against governments in the three countries were leveled against public policy measures in areas such as environmental protection, land-use planning, drug regulation and health care.”

Whittington observes that the Canadian government sees concerns of ISDS as overdrawn; with respect to CETA, he quotes a representative: “Investment protections have long been a core element of trade policy in Canada and Europe, and will encourage job-creating investment and economic growth on both sides of the Atlantic.” But, in March of last year, Public Citizen issued a report which comprehensively illustrates that ISDS offers protection far beyond what occurred in the past and that “… countries bound by ISDS pacts have not seen significant FDI increases, [whereas] countries without such pacts have not lacked for foreign investment (p.3).” And in that same report, Public Citizen illustrates precisely how deleterious actions under ISDS are to public well-being.

For instance, both Uruguay and Australia have drawn fire for their anti-smoking efforts (larger warning labels and plain packaging requirements), despite the fact that the World Health Organization commends such effort. (Jim Armitage, writing for The Independent last fall, described in detail Uruguay’s success in reducing smoking rates among its population.) Yet tobacco company Phillip Morris, is challenging both countries by way of ISDS. As noted by Public Citizen, “Philip Morris is demanding compensation from the two governments claiming that the public health measures expropriate the corporation’s investments in violation of investor rights established in Bilateral Investment Treaties (p.2).” Neither Uruguay’s health success nor the fact that Australia’s regulations were upheld by its Supreme Court, will have much sway in the tribunal operations of ISDS.

Under ISDS, disputes are managed by a trio of corporate attorneys who rotate among the positions of representative and judge. These tribunals are not answerable to any electorate and do not address public well-being as a court of law would do when confronted with the same dispute. Even if one is willing to accept that such critical decisions are rendered outside the forum of any country’s judiciary, the lack of statutory guidance to the outcome is extraordinary; Public Citizen writes:

If a tribunal rules against a challenged policy, there is no limit to the amount of taxpayer money that the tribunal can order the government to pay the foreign corporation. Such compensation orders are based on what an ISDS tribunal surmises that an investor would have earned in the absence of the public policy it is attacking. The cases cannot be appealed on the merits. There are narrow technical and procedural grounds for annulment. Firms that win an award can collect by seizing a government’s assets if payment is not made promptly. Even when governments win cases, they are often ordered to pay for a share of the tribunal’s costs. Given that the costs just for defending a challenged policy in an ISDS case total $8 million on average, the mere filing of a case can create a chilling effect on government policymaking, even if the government expects to win (p.2-3).

For Canadians, that last sentence is not conjecture; Walkom writes “[In 2013] … the Ontario government paid a U.S.-based company $15 million to withdraw its complaint.” Moreover, the phrase “would have earned in the absence of the public policy it is attacking” should send chills down everyone’s spine. Clean air, clean water, access to medicine, and, worker and public safety, all sit on the cost side of any ledger. It is unrealistic to expect that measures addressing these social needs would have been voluntarily adopted by entire industries, and then maintained by those industries, without some prodding from government. The appropriate forum to address dispute between corporate expectation and government commitment to public well-being, can only be a court of law.

Harold Innis (1894-1952) once remarked upon the brilliant achievement that was the development of law; that law represented “an alternative to force.” True, in the 21st century, citizens of nation states do not fear marauding armies traipsing through the streets in a hostile takeover of the nation. But we should not lose sight of the fact that nations can be taken over in a far more insidious way; losing the supremacy of our judiciary and the autonomy of our government should be an early warning sign.

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