Music industry sees reason for caution in introduction of digital radio services

The Canadian recording industry is asking the CRTC to proceed carefully in licensing new digital radio services due to worries that the technology could exacerbate its current digital piracy woes. The Canadian Recording Industry Association (CRIA) warns that the subscription radio ventures being proposed before the commission can be hacked into to build personalized playlists of music. Proponents of the technology counter that the U.S. Federal Communications Commission (FCC) is already looking into the problem in much greater detail, in a process that should be allowed to play out before Canadian regulators make any decisions. They note that satellite radio equipment will be built around the needs of other larger markets, and that a made-in-Canada solution to music piracy isn’t practical. The licence applicants counter that satellite radio will mostly be confined to in-vehicle environments, where piracy concerns aren’t an issue. There are currently two applications for licences for national satellite subscription digital radio services before the commission - one by a partnership of Sirius Satellite Radio Inc., Standard Broadcasting Radio Inc. and the Canadian Broadcasting Corp., and another by XM Satellite Radio and Canadian entrepreneur John Bitove. CHUM Ltd. in partnership with Astral Media is also proposing a terrestrial-based subscription radio service. CRIA has asked for a condition of licence to be attached to any successful applications that would "require the adoption of adequate content protection measures to ensure that this new mode of delivery does not inadvertently contribute to an increase in what is already rampant piracy of musical copyrighted works." In its submission to the commission, and in three separate reports, CRIA emphasizes that digital radio, if unprotected by anti-piracy measures, would have a disastrous impact on the industry. CRIA’s comments are echoed by other rightsholder groups, including the Canadian Motion Picture Distributors Association and others. In his brief, CRIA counsel Richard Pfohl writes: "If the CRTC authorizes any type of digital radio service without adequate content protection measures, this will fundamentally change the manner in which recordings are distributed. Currently, a listener’s ability to hear his or her music is dependent on the selection of the music broadcast by the radio station. One cannot listen to the precise recordings when one wants because the disc jockey or station management determines which recordings will be broadcast and when. If listeners want to listen to a particular piece of music at times of their choosing, they must purchase the song, either on a CD or through one of the Internet-based music services, or subscribe to an on-demand music service. Digital radio services that operate without adequate content protection measures would change that calculus by allowing customers to acquire and listen to the music they want, when they want it, without having to compensate anyone in the music industry. It is a new, illegal - and free - distribution mechanism with which legitimate services cannot compete successfully." But, say the applicants, the CRTC doesn’t have jurisdiction to impose copying restrictions on any new services. The Bitove/XM partnership argues: "While this matter is rooted in copyright law, there are elements of the remedy which CRIA and others seek which impact on technology, and which fall within the domain of Industry Canada and other government agencies. Historically, the commission has deferred to other regulatory bodies on matters pertaining to copyright law. There is a wide-ranging debate not only in Canada, but throughout the world relating to reproduction of musical works and copy protection. Parliament has not designated the commission as the agency which oversees administration of copyright or resolution of disputes relating to the use of intellectual property. The Copyright Board is seized of a wide range of powers pursuant to the Copyright Act." The same argument is made by the Standard/CBC/Sirius partnership. During public hearings at the CRTC on November 4, incoming CRIA president Graham Henderson was asked whether the applicants and Canada’s recording industry have been working together to come to an agreement on the issue. "As you can see from the responses of the two satellite applicants, they were extremely reluctant. They were the ones who suggested that this had to be solved elsewhere. And I should, just on that point say this, that as a Canadian I am not accustomed to thinking of our country as one which waits for Americans to fix our problems. And I believe it has been in our history and it is in our nature to solve problems. This problem does not require a global fix. It is not as if someone somewhere has to go and throw a couple of switches and then the whole problem is solved around the world," Henderson responded. While CRTC commissioners spent much of the time during hearings asking about the technology behind culling music distributed digitally, several outstanding questions remain to be answered from the written arguments. It’s not known at this point whether technological protection measures, if instituted as part of Canada’s copryight reform process, might also satisfy the recording industry. Further, some applicants have raised the spectre that digital radio might be subject to the New Media Exemption Order - a path the CRTC is likely loath to go down having shut the door to any reexamination of that policy earlier this year. There have also been arguments raised that Canada’s private copying regime might protect digital radio users who store copies of the songs. Finally, there are also some parties that argue too-strict digital rights management restrictions on Canadian versions of digital radio might create a grey market in this country for American-based services. For more on this story, see ongoing coverage in Canadian NEW MEDIA affiliate publication Canadian Communications Reports, which is following Canadian content and market implications in the licensing process.

Music industry sees reason for caution in introduction of digital radio services

Broadcast | November 16, 2004

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