Door closed on Internet retransmission by CRTC as Aliant makes experimental bid

Aliant Telecom Inc. has filed an application with the Canadian Radio-television and Telecommunications Commission (CRTC) for an experimental licence to continue its Internet retransmission service TV-on-my-PC, Canadian NEW MEDIA has learned (CNM Special Update, Jan. 20/03). The filing was made early this month, according to Bell Canada chief regulatory officer Sheridan Scott, and details will be confidential until the application is gazetted by the commission. Scott will say, however, that Aliant’s reported ability to control the geographic distribution of the service seems to put the application onside with the CRTC’s January 17 decision not to re-open the New Media Exemption Order to deal with Internet retransmission (Broadcasting Public Notice 2003-2; CNM Special Update, Jan. 17/03). " a perspective that geographic limitations are a matter of concern," Scott tells CNM. "It’s the issue that causes them to ask questions about the implications for the broadcasting system, and it’s the heart of the Aliant application. But what we’re going to have to look at is some of their characterizations, their conclusions. Their thoughts will be relevant to us for that application. It may be that we want to write further to them and provide further details to address some of these issues that they’ve raised." Aliant’s filing was expected in light of the passage of Bill C-11 last December, which denied companies operating under the New Media Exemption Order the protection of the compulsory retransmission licence built into the Copyright Act (CNM, Dec. 11/02). Without special authorization from the CRTC, several of the over-the-air television signals included in the TV-on-my-PC service (CNM, July 10/02) would be off-limits to the Atlantic telco, which is majority owned by Bell Canada parent BCE Inc. Scott says part of Aliant’s application to the CRTC is an offer to work cooperatively with broadcasters as a way to keep over-the-air TV signals on the system. "I certainly think the commission is going to be looking at the IP-based services and what this has to offer the broadcasting system," she says. "Those are very, very important questions and we believe that the TV-on-my-PC service is unique in shedding some insights. Part of the experimental licence will offer up to broadcasters the ability to work with Aliant to use it as a bit of a test bed if they want to look at some of the ways Canadians will use these new services." The Aliant application takes place against a background of increasing restrictions on Internet retransmission. Responding to Cabinet’s request for an inquiry into Internet retransmission (CNM, July 25/02), the CRTC concludes in its January 17 decision that while Internet retransmission of over-the-air signals has the potential to foster innovative new business models, and is unlikely to compete directly with traditional broadcasting for the foreseeable future, the practice still has the potential to do significant damage in relatively short order. In its ruling, the commission states that it "considers that Canadian Internet users would have to demonstrate a substantial interest in accessing programming on their computers before Internet retransmission could become a substitute for licensed over-the-air broadcasting or distribution undertakings." Further, "the Commission’s assessment of the record of this proceeding is that Internet retransmission, at this stage of its development, is not a substitute for the activities of existing licensed distributors and over-the-air-radio and television broadcasters. Further, in the Commission’s view, Internet retransmission could only become a substitute for conventional broadcasting and distribution services if and when it can provide a service comparable in price, choice and quality. In the Commission’s view, significant capital investment in infrastructure and the development of successful business models will be required before this can occur." But while the CRTC leans toward the view that Internet retransmission will remain on the margins of broadcasting as a competitor for years to come, it recognizes the concerns of several parties in enumerating the damage the practice might have. "If Internet retransmitters were to be granted access to the compulsory licensing provisions of the Copyright Act, the Commission considers it possible that at least some of the negative consequences … would manifest themselves relatively quickly. Further, the Commission considers that these disadvantages would likely outweigh any positive benefits that Internet retransmission might bring to the Canadian broadcasting system." It adds: "In light of the above, the Commission does not consider it necessary or appropriate to require the licensing of Internet retransmitters. Rather, Internet retransmission undertakings should remain exempt from these and from other requirements under Part II of the Broadcasting Act. In addition, since the recent amendments to the Copyright Act address the main concern identified in this proceeding, the Commission sees no need to amend the New Media Exemption Order at this time." Internet retransmitters hoping for some new class of licensing will likely be disappointed in the ruling, though they will continue to have the option of applying for a broadcast distribution licence subject to the requirements and conditions that entails. But, since the passing of Bill C-11, the loophole that apparently gave Internet companies such as JumpTV.com Canada Inc. the right to operate outside of traditional broadcast restrictions while taking full advantage of the right to retransmit over-the-air signals without the permission of broadcasters or program rights-holders has apparently been closed (CNM, Dec. 20/02). While Aliant may be successful in winning some kind of an experimental licence that would allow it to carry out Internet retransmission activities, the CRTC’s Internet retransmission decision has provided new stability to the broadcast industry, observers say. Further, broadcast executives say the decision allows them time to turn their thoughts to moving television onto the web in orderly fashion. Erica Redler, general counsel and senior VP of policy & legal affairs at the Canadian Association of Broadcasters (CAB), tells CNM: "The CAB has never opposed new technologies for distributing television programming. What we’ve opposed is having the retransmission of TV signals without the consent of either the broadcasters or the producers of the content. We, and some of our members, are very interested in Internet-based technologies, but we believe they have to be based on marketplace negotiations, which aside from the anomaly of the compulsory licence, is the norm. That’s how cable and satellite negotiate all their rights. And that’s the model we favour. But in terms of innovative ways to deliver new content, we are certainly not opposed to any of them including the Internet." Redler says television will certainly migrate to the Internet, but work remains. "I think that’s what we will turn our minds to. Clearly, there is an interest. We think that it is going to be part of the future and I think what needs to be developed now is an orderly rights regime for acquiring the rights for Internet retransmission. There’s a variety of stakeholders – clearly, the producers, the broadcasters, perhaps some of the talent unions that all have an interest in this…That marketplace for the Internet simply has to be put in place. There are obstacles such as the fact that some matters are stalled before the Copyright Board . It would be helpful if the processes could move ahead a little more quickly because while with respect to some of the aspects of rights that we can negotiate, that’s something that we can control, but with respect to some of the rights that are subject to regulation by the Copyright Board, we can’t control that and we can’t override that. So there’s a patchwork quilt that needs to be sewn together. But I think we will be turning our minds as an industry to really, what is the right business model and the right regulatory model and the right model for this kind of transmission of TV content."

Door closed on Internet retransmission by CRTC as Aliant makes experimental bid

Broadcast | January 23, 2003

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