Distributors say value-for-signal regime would bloc television creators from royalties

The CRTC’s proposed value-for-signal regime could block television creators from receiving copyright royalties, several of Canada’s largest cable and satellite television providers say in a new memo submitted with the Federal Court of Appeal. On Monday, Bell Canada, Bell Aliant Regional Communications, Cogeco Cable Inc., Rogers Communications Inc., Shaw Communications Inc. and Telus Corp. submitted a joint memorandum of fact to the Federal Court of Appeal on the value-for-signal proceeding. In March 2010, the CRTC decided that over-the-air broadcasters, such as CanWest Global Communications Corp. and CTVGlobemedia, could negotiate a value for their signals with the cable and satellite providers. But the commission punted the issue to the court to determine whether it has the jurisdiction to implement a value-for-signal regime. Right now, the distributors say, the Copyright Act prevents broadcasters from pulling their signals from carriers. But under the commission’s proposed value-for-signal regime, the Broadcasting Act would trump that provision in the Copyright Act, they argue. If the court approves the CRTC’s proposed regime, Canada could have a system similar to that of the United States, where backroom negotiations determine the value of broadcasters’ assets. In rare cases, American broadcasters have resorted to blackouts to negotiate fees for their signals with cable operators. The distributors argue these blackouts—although rare—would result in lost revenues for television creators. “Under the existing Copyright Act scheme, authors are entitled to royalties from retransmissions of distant signals and, importantly, the Act prevents anyone from blocking retransmissions of those signals,” the distributors’ memorandum of fact says. The parties said section 90 of the Copyright Act permits remuneration for the retransmission of distant signals between two broadcasters, but not for local signals. “The proposed regime would permit broadcasters to block distant signals and thereby ‘prejudice the amount of royalties’ these authors would receive, contrary to the spirit of s. 90 of the Act.” The added: “The Court should interpret the Broadcasting Act in a manner that does not result in disharmony, or conflict, with the Copyright Act.” Parties are submitting their written arguments as the court prepares for hearings on the matter scheduled for Sept. 13-14. In a memorandum of fact submitted June 8, CTV, Global, V Interactions Inc. and the Newfoundland Broadcasting Co. argued that the Broadcasting Act gives the CRTC enough leeway to institute a value-for-signal regime. Broadcasters say section 31 of the Copyright Act, which covers the retransmission of creative works, would allow for a value-for-signal regime. “In s.31, which does extend to BDUs , Parliament has provided that retransmission of a literary, dramatic, musical or artistic work by a BDU is not an infringement of copyright, as long as the conditions set out in the sections are met. These include an express requirement that the retransmission is lawful under the Broadcasting Act,” Canwest said in a separate memorandum submitted June 8. But the carriers argue that BDUs do not qualify as broadcasters under the Copyright Act, rendering the broadcasters’ argument irrelevant. “The Copyright Act carefully defines the term ‘broadcaster’ in s. 2 so as to deliberately exclude those whose ‘primary activity in relation to communication signals is their retransmission,’” the distributors wrote. “For this reason BDUs are not ‘broadcasters’ within the meaning of the Copyright Act.” They said the private broadcasters have raised the CRTC’s powers under the Broadcasting Act in isolation, without considering the influence of the Copyright Act. “Granting the requested jurisdiction to the CRTC would risk overturning a delicate system of copyright checks and balances established through more than a half-century of Parliamentary considerations,” the distributors wrote. Ian Morrison, a spokesman for the Friends of Canadian Broadcasting, an organization that has advocated for fee-for-carriage, told The Wire Report that the value-for-signal court proceeding—depending which way the decision falls—could strengthen or weaken the CRTC’s regulatory powers. “In the absence of a strong CRTC, what you end up getting is either a diminution of Canadian content, particularly local Canadian content, or you get more political interference,” he said. Morrison said a win for the cable and satellite carriers would weaken the CRTC. “This would be one of the first instances that the CRTC would have its wings clipped by the bodies under the Broadcasting Act that make decisions about its jurisdiction.” Morrison added that the CRTC would not have referred the issue to the court if it was not confident it would receive approval to implement a value-for-signal regime. Parties to the proceedings were not available for comment Tuesday. jmigneault@thewirereport.ca

Distributors say value-for-signal regime would bloc television creators from royalties

Broadcast | June 29, 2010

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