Pre-loaded set-top boxes piracy, BDUs say as court orders temporary ban

A trio of major telecom companies have received their first victory in a legal fight against companies selling set-top boxes allowing users to illegally access copyrighted material. On June 1, a federal court judge awarded BCE Inc., Rogers Communications Inc. and Quebecor Inc.’s Videotron an injunction against five companies dealing in “pre-loaded” set-top boxes, which came with applications that let users access free television content. According to judge Danièle Tremblay-Lamer’s written decision issued June 1, the boxes sold by ITVBox.Net, My Electronics, Android Bros Inc., WatchNSaveNow Inc. and MtlFreeTV.com contained three types of pre-installed applications — Kodi, an open-source media player that could access online streaming websites; Showbox, media player software that could access online streaming websites and permanently download content; and private IPTV services, which re-transit TV broadcasts over the Internet — with which the broadcasters took issue. While awaiting a final legal ruling, the three incumbents sought a temporary stop to further retail sales of the boxes “in light of the growing number of lost customers due to the pre-loaded set-top boxes sold by the Defendants,” the decision said. During the May 25 hearing, MtlFreeTV.com’s Vincent Wesley told the court that the boxes in question “are a piece of hardware, operating in the same manner as a tablet or a computer, on which anyone can install applications which are freely available to the public” through app stores or online. According to the judge’s decision, Wesley said he “does not develop, produce, service or maintain the software that is pre-loaded on the set-top boxes,” and they’re “nothing more than a conduit with substantial non-infringing uses.” But Tremblay-Lamer agreed with the defendants, who have “the exclusive rights to communicate their programs to the public by telecommunication via television broadcast” through the Copyright Act, that the boxes “deliberately encourage consumers and potential clients to circumvent authorized ways of accessing content.” “The boxes have several uses for consumers, some of which are perfectly legal and some which skirt around the fringes of copyright law,” Tremblay-Lamers wrote. “This is not the first time a new technology has been alleged to violate copyright law, nor will it be the last.” Independent consultant Peter Miller agreed, noting in a phone interview that “we’ve always had the ability to bypass the Canadian broadcasting system,” going back decades to when Canadians could access American over-the-air signals, and then illegal direct-to-home (DTH) satellites. The current legal situation plays into a “battle” Miller said he thinks is ongoing “between those who want to bypass the traditional cable providers and want to provide all these boxes that make it easy for people not to subscribe to cable, and cable companies who are in return turning a set-top-box into an even bigger portal.” For example, Bell’s Fibe TV subscribers have access to OTT services such as Netflix, Crave and Shomi, without requiring separate equipment. Rogers spokesman Andrew Garas said in an email that the pre-loaded set-top boxes are "a case of obvious piracy," and that "the court made the right decision." An emailed statement from Videotron also expressed enthusiasm for the judge’s decision, which will stand until a final ruling at a yet-to-be-determined date. “Vidéotron and Groupe TVA invest hundreds of millions of dollars every year to create, acquire and distribute copyrighted content. Letting this content be accessed for free would have undermined not only our efforts, but those of the entire Canadian content ecosystem, from creators to producers and distributors, thereby putting an important cultural industry at risk,” the statement said. Bell spokesperson Jacqueline Michelis also said in an email that the company welcomed the ruling. “Canadian companies like Bell and other providers invest hundreds of millions of dollars each year to create, acquire and distribute television content to Canadians,” Michelis said. “Enabling free and illegal access to copyrighted content with these boxes negatively impacts the entire Canadian content production industry.” Miller said the companies’ statements about adverse effects to cultural production were fair. “While I don’t think the damage to date was necessarily hugely material, I absolutely agree these are the kinds of things you have to stop before they create those kinds of damages because it’s very hard to reverse after the fact,” Miller said, noting that the average cable customer pays about $67 per month, of which he said roughly $30 makes it way to Canadian programmers and services. “They’re not wrong that there’s a tangible impact. I would hope they caught it early enough to be able to actually see a demonstrable impact, but they were certainly right to catch it.” The United States’ telecom regulator, the Federal Communications Commission, has introduced a proposal to loosen the set-top box lease agreements between cable and satellite TV companies and their customers. But Miller said that’s not an avenue he foresees being pursued in Canada. “We haven’t had much of an appetite for that, I think because it’s unclear the extent to which the CRTC’s jurisdiction would extend to that,” Miller said. “I don’t think we’ll have any regulatory, legal requirements to move in that direction.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Pre-loaded set-top boxes piracy, BDUs say as court orders temporary ban

Broadcast | June 13, 2016

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Pre-loaded set-top boxes piracy, BDUs say as court orders temporary ban

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