Deadlock on C-48 regulations prompts ministers to throw ball into CRTC court

Unable to break an impasse over regulations for proposed Bill C-48, the federal government has asked Parliament to pass the legislation without a final determination on whether Internet retransmission will or won’t be allowed. In return, Canadian Heritage minister Sheila Copps and Industry Canada minister Allan Rock have asked the Standing Committee on Canadian Heritage to take an active role in drafting regulations for approval about a year from now. The ministers are also directing the CRTC to report on its 1999 new media exemption order with respect to retransmission. Fraught as the proposed process is with uncertainty, the ministers’ preemptive strike would finally close the loophole on retransmission hopefuls such as iCraveTV.biz and JumpTV.com Canada Inc. as Copps and then-minister Brian Tobin promised last October – at least for a year or so. The move is an about-face from earlier promises that the legislation would not be passed without regulations in place. A media release issued by the departments on Dec. 12, 2001 stated: "The bill will not come into force until the first set of regulations is ready." Michael Wernick, associate deputy minister at Canadian Heritage, told Canadian NEW MEDIA at the standing committee meeting at which the plan was announced May 29 that the move doesn’t represent a broken promise, but a "change in approach" made necessary by the legal impasse in which the departments found themselves over proposed regulatory language. In a letter to the Parliamentary committee from Copps and Rock asking it to defer regulations for the time being, the ministers state: "Quite understandably, parliamentarians and stakeholders have been anxious to see draft regulations prior to taking final positions on the Bill itself. In the course of our consultations on the regulations, new issues have emerged and it has proved very difficult to find agreeable language." The measure fulfills the ministers’ initial promise to close the loophole for Internet retransmitters created by s.31 of the Copyright Act (CNM Special Update, Oct. 29/01). Though the bill doesn’t set any conditions by which companies such as Jump might operate, it does shut the door on retransmission by any entities other than satellite TV and cable companies protected by the new legislation – at least for one year. In response to concerns that passing the bill without regulations in place would usurp the power of Parliament, Wernick told committee members that the full participation of the committee in drafting new regulations is key to the new process. "It assures that the committee will not be passing a blank cheque," he said. Members weren’t convinced, however, on the first day of hearings. Upon reading the ministers’ letter, Alliance MP Jim Abbott first responded with disbelief. "I’m at a little loss to understand why the departments wouldn’t have come forward with something simpler in an Internet carve-out." Wernick told members that while a wholesale ban on Internet retransmission had been considered, the departments felt, "you would have swept in things you didn’t mean to sweep in...the Internet carve-out is very blunt." Instead, they chose to allow retransmission under strict regulatory conditions. "That, quite consciously, is to leave room for innovation," he said. Wernick’s counterpart at Industry Canada, Michèle Gervais, hammered home the innovation argument, signaling the government’s continued intent to allow at least some form of retransmission. "With appropriate safeguards...we believe the Internet can be an important part of Canada’s broadcast system," she told committee members. New draft regulations tabled at the May 29 meeting bear out that assertion. While the new guidelines are nearly identical to those distributed to industry stakeholders on May 1, a ban on Internet advertising has been removed, rendering the draft even more Internet-friendly than previously. At a meeting of the standing committee on May 30, the Canadian Association of Broadcasters (CAB) reiterated its opposition to the guidelines in their current form, especially the lack of a ban on banner ads, and the loss of a requirement that Internet retransmissions be encrypted. Above all, the CAB took advantage of its comments to the committee to press for a clearer moratorium on Internet retransmission activities during the year-long regulatory process. While several witnesses, including the Canadian Cable Television Association, and members agreed with Wernick’s assessment the previous day that the door is shut to companies such as JumpTV, the CAB argues Bill C-48 is still open to interpretation without a specifically-worded moratorium. Asked whether the CAB could provide the wording for such a legislative halt to activities, senior VP Erica Redler told members it was close to finding carve-out language. Much of the debate during the May 30 meeting centred on the related issue of a permanent Internet carve-out as members quizzed the CAB and CCTA about the workability of immediately banning companies such as iCraveTV, rather than a lengthy process of debating the issue before the CRTC and again in six months in committee. CAB president/CEO Glenn O’Farrell told members that his organization and others – presumably the members of the Media Content Coalition – had been working toward a workable carve-out amendment until December, when it was asked by officials at Heritage and Industry to work, instead, on regulations restricting Internet retransmitters’ activities (CNM, Nov. 1/00). However, the CCTA told the committee that a carve-out is impractical. President/CEO Janet Yale and senior counsel Jay Kerr-Wilson told members that an amendment to exclude the Internet from s.31 of the Copyright Act is too difficult. "We have not seen language – ever – that does not catch the delivery of legitimate services," Yale said. Cable operators’ concerns, Yale and Kerr-Wilson said, are that new services such as those offered through digital set-top boxes might be inadvertently banned by any attempt to put a blanket restriction on Internet retransmission. At the same hearing, the National Association of Broadcasters (NAB) presented its case for a clear moratorium on Internet retransmission, as well as a permanent ban. The NAB, said senior associate general counsel Ben Ivins, is "inalterably opposed to compulsory licence" protection for companies such as Jump. Further, he warned that if regulations allow some limited Internet retransmission, Canada would be in violation of its treaty obligations under TRIPS and the Berne Convention. Even though extra-territorial reception would likely be banned under law by Bill C-48, he told committee members, the practical effect of the bill would be to do serious harm to small market TV stations in the U.S. At press time, it was unknown how Internet providers represented by the Canadian Association of Internet Providers or JumpTV are reacting to the newly prolonged process. Farrel Miller, president/CEO of Jump, is likely not in the financial position of carrying on operations for another year, and ISPs who fought hard for the new media exemption order may not be pleased that the issue will be re-opened.

Deadlock on C-48 regulations prompts ministers to throw ball into CRTC court

Broadcast | May 31, 2002

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