An initial Canadian environmental assessment of the agreement suggested that the IP chapter would simply reaffirm existing IP obligations. If the agreement is limited to reaffirming existing commitments, copyright term will not be touched since Canada meets the international requirement of life of the author plus 50 years. However, South Korea's recent trade deals with both the European Union and Australia feature a minimum copyright term of life of the author plus 70 years (the Australian deal also includes a requirement for "measures to curtail repeated copyright infringement on the Internet"). Whether the Canadian deal contains a similar provision will be worth monitoring, both for the impact on Canadian copyright law and for the international trade implications such as the Trans Pacific Partnership that is currently under negotiation.
In 2014â15, Industry Canada will deliver the telecommunications consumer commitments included in the 2013 Speech from the Throne. These include taking legislative action to amend the Telecommunications Act to reduce roaming costs and prevent wireless providers from charging other companies more than they charge their own customers for mobile services. The Department will also protect consumer interests by encouraging compliance and adopting more effective remedies, including administrative monetary penalties, when violations occur. Industry Canada will continue to promote investment in high-speed broadband networks for rural Canadians.
These priorities are an important part of a robust digital economy. Other elements will include: modernizing the privacy regime to better protect consumer privacy online; monitoring the implementation of Canada's anti-spam legislation; and deepening analysis of Canada's communications infrastructure.
While the telecom actions were expected, the commitment to modernizing Canadian privacy laws is new (albeit long overdue). Previous privacy reform bills died on last year, leaving the government years behind in addressing PIPEDA reform. The Industry Canada report suggests that some legislative action may finally be on the way.
The latest CRTC broadband target is for 100% of Canadian households to have access to broadband speeds of 5 Mbps download and 1 Mbps upload by December 31, 2014. That target is a year ahead of schedule as last year's report set the 100% target for the end of 2015. The new target is also difficult to reconcile with the government's announcement that it plans to spend $305 million over the next five years to extend broadband to rural and remote areas. In fact, last week reports suggested that Industry Minister James Moore and the government had established a target of 2019 for universal access to broadband. If the CRTC target is achieved, the government's broadband plans and targets would appear already outdated. Interestingly, Industry Canada's report includes a target of 77% of the population with broadband subscriptions (not access) by March 2015, but broadband is defined is only 1.5 Mbps or higher.
In addition to broadband targets, the report features targets for everything from spam reduction to viewership of Canadian content. With the new anti-spam law set to take effect in July, the CRTC hopes to reduce spam by 10% over the next 12 months. The Canadian content targets have changed completely with the CRTC now focused on the viewership or listeners to Canadian content. By March 2015, the Commission target is 48% of total television viewing is to Canadian programming, while it wants 50% of radio listening to Canadian content. The CRTC targets differ slightly from those of Canadian Heritage, which set a target of 50% Canadian programming viewing by August 2015.
The column begins by noting that regulation of Internet video services and the prospect of pick-and-pay television channels headline the second phase of the Canadian Radio-television and Telecommunications Commission's future of television consultation which launched late last month. The "TalkTV" initiative is designed to make it easy for Canadians to participate, featuring six short scenarios followed by a limited number of choices for respondents.
The Internet video discussion in the survey focuses almost exclusively on new regulatory fees for services such as Netflix. After asking respondents whether online services should be required to contribute to funding for Canadian content, provide closed-captioning, and adhere to regulated programming standards, the CRTC poses a series of follow-up questions that all involve additional costs.
Respondents are asked whether they would pay an extra 50 cents per month for Canadian-made programming (presumably the additional cost for a Canadian content contribution fund) or a few cents each month for closed captioning. The commission also inquires whether Canadians would be willing to pay $5 more each month for increased Internet usage costs. The CRTC floats the possibility that such usage would not count against monthly data caps, suggesting that it may be willing to violate net neutrality principles as part of a new Internet regulatory regime.
The consultation delves into other controversial issues, but often offers a lopsided perspective. Signal substitution, the longstanding practice that swaps a U.S. feed with the Canadian equivalent (with Canadian commercials) when the same program is being aired at the same time, was raised during an earlier part of the consultation as a policy ripe for reform. Once the issue is explained in the survey, respondents are offered just three choices: keep the policy unchanged, black out U.S. signals, or require Canadians to pay extra fees to compensate stations for lost revenues.
Similarly, the consultation asks whether Canadians would like access to more U.S. and international programming. The Commission seemingly pre-judges the issue by framing the ramifications of new programming as increasing cable and satellite fees, creating lost Canadian jobs, or developing new channel packages with additional Canadian content to offset the foreign programming.
When asked about the apparently skewed approach during a recent Twitter chat, CRTC Chair Jean-Pierre Blais responded that the consultation was meant to be provocative. Few would object to a provocative approach that generates interest in broadcast policy, however, these provocations are entirely one-sided.
For government regulators, it is seemingly provocative to ask about Internet regulation and the implementation of new fees that could almost double the effective cost of services such as Netflix. It is also provocative to equate more consumer choice with lost Canadian jobs or to propose compensation for Canadian television stations if simultaneous substitution is removed.
Yet the commission does not offer up similarly provocative options such as the elimination of many broadcast regulations in order to create a level playing field with Internet services or removing the requirement that Canadians purchase basic television services with all cable and satellite packages. It also does not provoke respondents with the possibility of new rules to eliminate simultaneous substitution by forcing Canadian broadcasters to adjust to a more competitive marketplace or to re-imagine the role of public broadcasting in Canada.
Given that the CRTC rightly or wrongly often attracts the ire of Canadians, the survey also avoids the biggest provocation of all - does Canada still need the CRTC to regulate broadcasting? The answer to that question might depend upon the final results of its future of television consultation.
the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defence. Any act falling within the fair dealing exception will not be an infringement of copyright. The fair dealing exception, like other exceptions in the Copyright Act, is a user's right. In order to maintain the proper balance between the rights of a copyright owner and users' interests, it must not be interpreted restrictively. As Professor Vaver, supra, has explained, at p. 171: 'User rights are not just loopholes. Both owner rights and user rights should therefore be given the fair and balanced reading that befits remedial legislation.'
The articulation of fair dealing as a users' right represented a remarkable shift, emphasizing the need for a copyright balance between the rights of creators and the rights of users. While this approach unquestionably strengthened fair dealing, the immediate reaction to the CCH was somewhat mixed.
Five years after the decision, some groups began to work to roll back the CCH decision. In 2009, Access Copyright urged the government to establish limits on the ruling in its submission to the national copyright consultation:
Rather than an expansion of fair dealing, Access Copyright believes that it may be necessary to qualify the fair dealing provision as set out by the Supreme Court of Canada in the CCH decision, in order to ensure that Canada is compliant with the three-step test. Access Copyright contends that the fair dealing provision as interpreted by the Supreme Court of Canada conflicts with the normal exploitation of a work and causes an unreasonable loss of income to creators and publishers.
The government rejected the calls to limit fair dealing, however, instead expanding the provision with several new purposes including education, parody, and satire in its 2010 copyright reform bill.
With the government siding with users on the issue, the same groups hoped the Supreme Court of Canada would rethink its CCH ruling in the 2012 copyright cases. The Canadian Publishers' Council argued that the meaning of "users' rights" was overstated:
The Appellants and other Intervenors rely extensively on the concept of "users' rights" to promote a view of fair dealing that would substantially curtail copyright holders' rights and permit extensive copying of behalf of others. Their use of the term to justify this severe curtailment of exclusive rights illustrates the dangers of treating the word 'user rights' literally, rather than as a metaphor to express the importance of user interests.
Access Copyright emphasized the same concern:
In CCH this Court raised expectations when it held that fair dealing is a "user's right". Those raised expectations have led users like the appellants to ask that the right be clarified and made more predictable. However, this should not come at the expense of upsetting the balance between users' and creators' rights under the Act.
Yet the Supreme Court of Canada rejected those arguments, choosing instead in 2012 to re-affirm the importance of users' rights:
CCH confirmed that users' rights are an essential part of furthering the public interest objectives of the Copyright Act. One of the tools employed to achieve the proper balance between protection and access in the Act is the concept of fair dealing, which allows users to engage in some activities that might otherwise amount to copyright infringement. In order to maintain the proper balance between these interests, the fair dealing provision 'must not be interpreted restrictively'.
While some groups still seek to downplay the importance of fair dealing, ten years after CCH it is clear that users' rights are here to stay. The Supreme Court has continued its emphasis on a copyright balance that prominently features users' rights, the government has adopted copyright reform with a significant user-oriented component (expanded fair dealing, user generated content provision, Internet exceptions, format shifting, device shifting, backup copies), and the World Intellectual Property Organization reached agreement on its first users' rights copyright treaty last year with the Marrakesh Treaty for the blind and visually impaired. There is still much work to be done, but the progress over the past decade owes a great deal to the battle between legal publishers and the Law Society of Upper Canada that culminated in the March 4, 2004 CCH decision that firmly placed copyright users' rights on the map.
Complaints about the issue date back at least 15 years, when a complaint was filed against an English-only photography website. While a Montreal lawyer claims the issue has not been challenged in court, the issue was in fact litigated in Reid v. Court of Quebec, a case involving the online sale of maple syrup. The Quebec Superior Court upheld the application of the language laws to the Internet ruling that the law applied to commercial publications and that included websites. Further complaints seem to pop up every few years (presumably because the system is complaints-based), but the legal analysis is pretty straightforward. The law applies to all commercial publications - including websites - involving a business with a Quebec location or address that is selling goods or services. The location of the server or even the intended audience is irrelevant - what matters is the real-space location of the business.
Leaving aside discomfort with language laws altogether, the application of language laws to the Internet strikes me as wholly unnecessary since it is very easy for anyone to translate any webpage into the language of their choice. Yet absent a change in the law, the only surprise about the application of the law is that anyone is surprised.
In establishing the scope of copyright rights, the law refers to "the sole right to produce or reproduce the work or any substantial part thereof." Since the rights only arise once the full work or a substantial part of it are used, anything less than that - ie. an insubstantial part - is not subject to the rights identified in the Copyright Act. While some rights holders have argued that the standard for a substantial is very low (the National Post recently argued in a case that "even the reproduction of a small number of words in a newspaper article can be an impermissible reproduction"), the Copyright Board says that its preliminary view is that "copying of a few pages or a small percentage from a book that is not a collection of short works, such as poems, is not substantial." With respect to the tariff application, the Board says this excludes more than 2.5% of coursepack copying.
Beyond the de minimus copying issue, the Board poses several other important issues to Access Copyright. For example, it asks for the collective to provide a legal justification for including linking in its tariff, particularly in light of the Supreme Court of Canada decision of Crookes v. Newton (I discuss that here). It also seeks analysis of the university fair dealing guidelines and asks Access Copyright to describe its view of the impact of adding education to the fair dealing provision as part of Bill C-11 and of the Supreme Court of Canada fair dealing cases. The Board also asks Access Copyright to explain:
the basis for asserting that all copying carried out under the educational institutions' policies is compensable and subject to the tariff to be certified by the Board. Is it Access' position that there is no fair dealing at all in educational institutions?
The Board has posed some important questions and staked out a notable position on de minimus copying. Access Copyright's responses are due by March 18, 2014.
What comes next is anyone's guess - Voltage indicates that it plans to
pursue the case - but the economics of suing thousands of Canadians for
downloading a movie for personal purposes may not make sense given
current Canadian law. This post examines the law and estimated costs of
pursuing file sharing litigation against individuals, concluding that
the combination of copyright reform, the Voltage decision, likely damage
awards, and litigation costs will force would-be plaintiffs to
reconsider their strategies.
in the case of infringements for noncommercial purposes, the need for an award to be proportionate to the infringements, in consideration of the hardship the award may cause to the defendant, whether the infringement was for private purposes or not, and the impact of the infringements on the plaintiff.
I would argue that the actual number is likely to be at the low-end of the scale for a first-time case. These are non-commercial cases involving movies with a market value for consumers of around $15 to $25 with some selling for under $10. Moreover, the impact of the infringements on the plaintiff are also low since Voltage chose relatively low-profile movies (see page 9), some of which had minimal earnings (for example, Puncture earned $68,945 worldwide). Contrary to some reports, the Hurt Locker is not one of the films in this case.
Perhaps the best comparable is the New Zealand copyright tribunal three strikes cases which have awarded actual market value for the copyright work (eg. $2.39 for a song) and added tribunal and application fees, a deterrence fee, and a portion of the cost of obtaining the user's information. Tribunal and application fees would not apply to a demand letter in Canada. The deterrent fee has been as low as zero with others around $100 per infringement. There is often also a fee for obtaining the name and address, typically at about $50 for three notices.
Since Canadian demand letters would not involve tribunal or application fees, a reasonable number is going to be very close to the $100 minimum for a first-time, non-commercial infringement with no other warnings or notices. The federal court hinted at this last week, noting that "damages against individual subscribers even on a generous consideration of the Copyright Act damage provisions may be miniscule compared to the cost, time and effort in pursuing a claim against the subscriber."
As discussed in my post on the case, the decision establishes a system of court oversight for the demand letters as the contents will be approved by the parties (including CIPPIC) and the case management judge. The letter must also "clearly state in bold type that no court has yet made a determination that such subscriber has infringed or is liable in any way for payment of damages." With a full review of the letter, a court is unlikely to grant its approval if the demands are viewed as excessive. Indeed, it seems likely that the court will require settlement demands that are consistent with likely damage awards.
Even if Voltage were successful in convincing a court to award ten times the marketplace value of a $15 movie - $150 - the economics do not make sense. Assuming Voltage manages to convince 75% of recipients to settle for the $150 demand, the campaign would generate $225,000 in revenue. Yet that must be offset by paying the TekSavvy costs before any names are released (which alone were estimated at $200,000 at the federal court hearing), covering their own costs (assume a matching $200,000 to collect the IP addresses, retain experts, and fund the litigation), and dealing with thousands of demand letter recipients (if each letter costs $30 in time and money that adds another $45,000).
Under this scenario, Voltage will have settled three quarters of its cases for ten times the market value of a $15 movie and will have lost hundreds of thousands of dollars in the process. In fact, even if the demands were doubled to $300 per subscriber, the case will still just break even. Moreover, there are still the remaining 25% of recipients who have not responded, many of whom may believe they have (in the words of the federal court) "perfectly good defences to the alleged infringement." If Voltage pursues them in court, the costs of the litigation (the federal court ruled all follow-on cases will be subject to case management) will far outstrip any likely award as every court case is a money loser. If Voltage does not fight in court, the decision to only send demand letters will be used as evidence of copyright trolling in any future case and the federal court ruled that "improper motive" (ie. demand letters without intent to litigate) could be enough to deny future motions for subscriber information.
In sum, file sharing lawsuits against individuals in Canada do not make economic sense if the goal is to profit from the litigation (the Voltage case is different from earlier industry-backed lawsuits that were geared toward deterring file sharing). First, since Canadian law points to very low damage awards and court oversight will make it difficult to demand anything beyond the likely damage awards, settlements may not even cover costs. Second, some cases will require litigation and every case that goes to court will result in losses for the rights holder. Third, failure to litigate those cases will make it difficult to obtain future court orders for subscriber information since those litigants will be suspected of copyright trolling.
The court set the tone for the decision by opening with the following quote from a U.S. copyright case:
"the rise of so-called 'copyright trolls' - plaintiffs who file multitudes of lawsuits solely to extort quick settlements - requires courts to ensure that the litigation process and their scarce resources are not being abused."
The court was clearly sensitive to the copyright troll concern, noting that "given the issues in play the answers require a delicate balancing of privacy rights versus the rights of copyright holders. This is especially so in the context of modern day technology and users of the Internet."
So how did the court strike the balance?
The win for Voltage Pictures is the order to disclose the subscriber names and addresses. The court felt bound by the Federal Court of Appeal Sony BMG case, which established that a "bona fide" claim is the standard needed for a court order (CIPPIC had argued for a higher "prima facie" standard). The court found that Voltage met the bona fide standard based on its statement of claim.
While Voltage argued that should be the end of the issue and privacy issues should not be a concern, the court was extremely troubled by the prospect of copyright trolling. It stated:
"This [Voltage's position] would be an acceptable position but for the spectre raised of the 'copyright troll' as it applies to these cases and the mischief that is created by compelling the TekSavvy's of the world to reveal private information about their customers. There is also the very real spectre of flooding the Court with an enormous number of cases involving the subscribers many of whom have perfectly good defences to the alleged infringement. Finally, the damages against individual subscribers even on a generous consideration of the Copyright Act damage provisions may be miniscule compared to the cost, time and effort in pursuing a claim against the subscriber."
Having cited the dangers of copyright trolling (and noted the limited damages available in these cases), the court canvassed the caselaw in the U.S. and the U.K. and identified principles that go beyond prior Canadian caselaw. First, where there is compelling evidence of "improper motive" of a plaintiff, the court might consider denying the motion entirely. Second, if such evidence is unavailable, there are numerous safeguards that can be established.
In this case, the court ruled that there is some evidence that Voltage has been engaged in litigation which may have an improper purposes, but not enough to deny the motion altogether. Instead, the court ordered release of the subscriber names and addresses with the following safeguards:
- the case will be managed by a Case Management Judge
- TekSavvy will only disclose subscriber name and address information
- Voltage will pay all reasonable legal costs incurred by TekSavvy before the release of any information
- the demand letter to subscribers will include a copy of the court order and "clearly state in bold type that no court has yet made a determination that such subscriber has infringed or is liable in any way for payment of damages"
- the contents of the demand letter will be approved by the parties (including CIPPIC) and the Case Management Judge
- any further cases brought against subscribers will also be case managed
- the information released by TekSavvy will remain confidential, will not be disclosed to other parties, and will not be used for other purposes. The information will not be disclosed to the general public or the media.
The possibility of Quebecor becoming a national player does not end there. The government's move to regulate domestic wireless roaming creates the possibility of more competitive new entrants who can piece together national networks comprised of their own spectrum plus roaming on competitor networks in markets where they do not operate. There is also the possibility of Quebecor accelerating a national move by acquiring Mobilicity or even making a play for Wind Mobile.
Yet despite the optimism, there is still some lingering doubts about Quebecor's plans. The company's press release states "given the way the auction unfolded, Quebecor Media could not pass up the opportunity to invest in licences of such great intrinsic value in the rest of Canada. We now have a number of options available to us to maximize the value of our investment." In other words, this was relatively cheap spectrum given bidding restrictions on incumbents and the limited number other bidders that was too inexpensive to pass up ($233 million for seven licences in Quebec, Ontario, BC, and Alberta).
Moreover, the company's success in Quebec may stem in part from its ability to offer bundled services that include wireless, Internet, cable television, and home phone. Quebecor will be hard pressed to match the bundled approach outside its home province. If the company is a wireless-only player in Ontario, B.C., and Alberta, it may face many of the same challenges as the other 2008 new entrants.
From a consumer perspective, the possibility of more choice is great, however Quebecor is another large vertically integrated company with incentives to favour its own content. For example, in 2011, the CRTC ruled that it violated undue preference rules when it gave its video-on-demand service exclusive rights to some of its broadcaster programs. The Commission ordered the company to provide the programs to Telus and Bell.
For the moment, Canada is still dominated by the big three, who unsurprisingly bought the majority of available spectrum. But the spectrum auction outcome offers a ray of hope to those seeking a national wireless player who could shake up the Ontario, BC, and Alberta markets. Quebecor has a footprint of 500,000 wireless customers in Quebec and it just acquired prime spectrum on the cheap. If the government maintains its commitment of regulating wholesale domestic roaming and tower sharing, there may be the necessary ingredients to entice Quebecor to take a shot at becoming a viable fourth player in Canada's largest provinces.
consultation is a signal of where the CRTC is headed, not only is
the notion of true pick-and-pay channels dead and simultaneous
substitution alive, but the Commission may be willing to toss out
net neutrality in a race to regulate online video services. The issues raised in the consultation:
- Basic service: There are four scenarios presented, three of which support the ongoing need for mandatory basic services and one that envisions a very basic service. None of the scenarios raise the possibility of eliminating basic service altogether in favour of a full pick-and-pay model. Respondents are asked whether they support a broader basic service or one that is more limited.
- Local news: Two people in one scenario enjoy local news and a single person relies on Internet services. Respondents are asked which they think local news requirements should remain in place.
- Pick-and-Pay: There are three scenarios: one pick-and-pay and the other two maintaining packages (one the current system and the other involving choice on packages). Respondents are asked which they prefer.
- Sports: This is the first issue that is presented with two people in two scenarios - important sports programming for free to all or some on fee-based networks. Respondents are asked which they prefer.
- U.S. and international programming: Three scenarios on access to U.S. and international programming with two suggesting that Canadians get a good deal right now. Respondents are asked if they want direct access to U.S. and international channels if that means paying more, results in lost Canadian jobs, or comes packaged with Canadian channels.
- Signal Substitution: There are no scenarios in this section. Instead, after providing some historical context, respondents are provided with three choices: maintaining signal substitutions, blackouts, or paying extra fees to compensate for lost revenue. No other choices are offered.
- Online Programming: This section features two yes or no questions: (1) should online services be required to pay to create Canadian programming and (2) should they provide closed-captioning and adhere to programming standards. Remarkably, the follow-up questions all involve further payments with respondents asked if they would pay an extra 50 cents per month for Canadian-made programming, a few cents for closed captioning, and $5 per month for increased usage costs of regulated services.
The Canadian Media Production Association, which represents independent producers of English films and television shows, recently told a Senate committee that new rules are needed to address the threat posed by popular Internet video services such as Netflix. The CMPA argued that a "level playing field" is needed to ensure that there is "choice, diversity and growth in a more open market place."
Its recipe for reform includes three specific changes that target Netflix. First, it wants new rules requiring foreign-based content companies to contribute to the creation of new Canadian content. The CMPA has not suggested a formula for contributions nor explained how it would distinguish between online services mandated to contribute and those exempted from such requirements.
Second, it wants to require Netflix to block the use of proxy services that can be used to disguise the geographic location of a user. Those services - which are popular with privacy advocates since they allow users to safeguard their personal information - can also be used to access the U.S. services that are otherwise unavailable in Canada such as Hulu or the U.S. version of Netflix.
Third, it wants Netflix to levy taxes on all subscriptions, raising broader questions about taxation issues for the myriad of online services that challenge conventional notions of jurisdiction.
The CMPA is not alone in advocating for new Internet-related rules. Music Canada, formerly known as the Canadian Recording Industry Association, has also begun to push for changes that could target Internet providers and search engines.
Late last year, the organization noted the need for website blocking to combat sites that facilitate infringement. Graham Henderson, the Music Canada president, wrote that government support (which now runs into the tens of millions of dollars in Ontario alone) should be accompanied by "judicious and reasonable regulation of the internet. The actions taken by courts in other jurisdictions have very reasonably required ISPs to block websites that are almost entirely dedicated to the theft of intellectual property." Website blocking has proven highly controversial in many countries, with some courts striking down blocking laws on free speech grounds.
The blocking requirements would target Internet service providers, but Music Canada has also identified search results as a problem. In a presentation to the Ontario Standing Committee on Finance and Economic Affairs, Henderson claimed "consumers cannot find legal services on Google," adding that "with government support, maybe we can urge intermediaries to actually do something to help consumers find legitimate sources, because I think theyâd like to." Whether that means requiring companies like Google to adjust their search results by eliminating some results or by prioritizing industry-friendly websites is unclear, yet the comments suggest the industry would favour some form of intervention or government pressure.
The Canadian government has to date been reluctant to wade into the Internet regulation debate. Moreover, regulators such as the CRTC have long exempted online services such as Netflix from broadcast-style regulation. Yet as online services continue to reshape the marketplace, the pressure for new rules seems likely to intensify.
Yesterday's federal budget marks the revival of the Canadian digital strategy. The government will undoubtedly still point to past accomplishments (the budget references reforms that date back to the 2006, so digital economy activities from several years ago are surely fair game), but this budget provides many of the remaining ingredients for a digital strategy (Mark Goldberg offers a similar perspective). Once again, all that is left is missing is the official announcement from Industry Minister James Moore. So what will the Canadian digital strategy contain? Based on this budget, it would seem to include:
In sum, the good news is that there is finally a government target for universal broadband access, some money to finish the job, and a commitment to address wireless competition concerns. The bad news is that a 5 Mbps goal by 2019 is too slow. By comparison, the Digital Agenda for Europe sets a target of 30 Mbps by 2020 and Australia has targeted 100 Mbps by 2016.
Intellectual Property: The government has already passed copyright reform and will soon also pass Bill C-8, the anti-counterfeiting bill that includes major reforms to Canadian trademark law. It recently tabled five intellectual property treaties that focus on the administration of intellectual property rights. The budget confirms the intent to pass the amendments needed to ratify or accede to those treaties. In addition, it will reform plant breeders rights, another form of IP. All of the latest IP reforms are being driven by trade agreements as these are required reforms for the Canada - European Union Trade Agreement.
Online Commerce: Electronic commerce issues often fall within provincial jurisdiction (for example, online contracting), but the government seems to have identified several areas where it can play a role. The anti-spam legislation that takes effect later this year is the most obvious policy intervention, but the budget contains two more. First, the government has launched a consultation (deadline in 120 days) on the collection of sales tax on e-commerce transactions. It asks:
the Government is inviting input from stakeholders on what actions the Government should take to ensure the effective collection of sales tax on e-commerce sales to residents of Canada by foreign-based vendors. For example, should the Government adopt the approach taken in some other countries (such as in South Africa and the European Union) and require foreign-based vendors to register with the Canada Revenue Agency and charge the Goods and Services Tax/Harmonized Sales Tax (GST/HST) if they make e-commerce sales to residents of Canada?
Second, the government says it plans to introduce anti-money laundering and anti-terrorist financing regulations for virtual currencies such as Bitcoin. The budget cites a 2013 Senate report for support for the move, though that report does not reference virtual currencies. There have been some efforts elsewhere to address money laundering concerns with online currencies, but some remain skeptical over whether the concern is warranted.
The government may have also encouraged the Competition Bureau to flex its muscles on online commerce issues, leading to the recent e-books settlement and the greater cooperation between the CRTC and the Bureau.
Content: The budget includes a couple of digital items involving online content with money allocated for the Virtual Museum of Canada and Online Works of Reference, which includes The Canadian Encyclopedia/Encyclopedia of Music in Canada and The Dictionary of Canadian Biography. Unfortunately, a serious commitment to digitization is still absent. I suspect that the government will point to many earlier initiatives - changes to the Canada Media Fund (including major funding several years ago) and the IP reforms - as evidence of its support for online content. The other important element of government policy is how Canadians access content, with the government's commitment to a pick-and-pay model for television broadcasting and its likely opposition to regulation of Internet video providers focusing on the access side of the equation.
Skills Development: Every budget includes money for skills development and this one is no different. While there are no references to specific digital skills development, training programs, research funding, and other support can be easily brought into the digital agenda umbrella.
Government as a Model User: Given the inaccessibility of the budget website yesterday, the government still has plenty of room to improve in holding itself out as a model user. Yet the budget also includes key elements here: funding for an Open Data Institute and emphasis of web-based services (particularly for veterans) provide examples that would fall within the digital strategy. Indeed, open data has made real progress in recent years with more data sets available and the creation of a non-commercial open licence for government works.
The actual Canadian digital strategy may not look identical to this - privacy and security did not fall within the budget but would presumably be part of a strategy - but there is enough in this budget to provide observers with a good guess about where things seem to be headed.
- Canadian capturing of metadata on Internet activity, including airport wifi and other wifi sources
- Canadian intelligence agency spying on Brazil
- Canadian cooperation with the NSA on spying at the G-20 meeting in Toronto
I recently posted on a discussion I had last summer with a senior government official on the Snowden leaks. The official remarked that in the wake of the Snowden revelations the political risk did not lie with surveillance itself, since most Canadians basically trusted their government and intelligence agencies to avoid misuse. Rather, the real concern was with being caught lying about the surveillance activities. This person was of the view that Canadians would accept surveillance, but they would not accept lying about surveillance programs.
Today is the day that Canadians can send a message that this official is wrong. The Day We Fight Back Against Mass Surveillance is a global effort to galvanize people around the world to speak out against ubiquitous surveillance. Canadians can learn more here, but the key ask is to contact your Member of Parliament. If you are concerned with widespread surveillance in Canada, take a couple of moments to send an email or letter (no stamp required) to your MP and let them know how you feel (alternatively, you can fill out the form at this site). In addition, you can sign onto a global petition supported by hundreds of groups around the world.
I've written about the need for changes here and many others - including Interim Privacy Commissioner Chantal Bernier, Kent Roach, Wesley Wark, Ron Diebert, David Fraser, Ontario Privacy Commissioner Ann Cavoukian and Avner Levin, Craig Forcese, and Lisa Austin - have highlighted other potential changes. There are no shortage of ideas for reform. What we need now are Canadians to speak out to demand an open review and reform of Canadian surveillance law and policy.
the document showed how the party can mine information on ânon-CPC brandedâ websites, using a friendly media "Illustration." The slide show points to radio station CFRA's Lowell Green, whom it identifies as an "Ottawa based conservative leaning talk show host." It says a "recent Facebook posting - non-issue" received 55 Facebook "likes." The document says the party was able to "positively identify 38 constituents (70 per cent ID rate)." Of those 38, it said five "are current members/donors." The result, it said: "33 Canadians who would be a 'warm contact' for engagement."
Develop specific guidelines for collection, use and dissemination of intelligence products built upon use of online sources and social network sites. The position of the OPC is that the public availability of personal information on the Internet does not render personal information non-personal. It is our view that departments should not access personal information on social media sites unless they can demonstrate a direct correlation to legitimate government business.
While the Conservative party usage is not the same as CSEC, the same concerns may well apply.
Given the ongoing digital divide in Canada - there are still many Canadians without access to broadband in their homes - this is a welcome development. Yet spending money on rural broadband initiatives is only part of the solution. In many instances, the absence of broadband in the home is not a function of access, but rather affordability. Statistics Canada reports that Internet use among the richer half of the country is actually over 90 per cent with the top quartile of household income at 94.5 per cent and the second quartile at 90.2 per cent. Internet use among the bottom quartile of Canadians stands at only 62.5 per cent (the third quartile is 77.8 per cent). Governments at all levels must be thinking about both access and affordability.
My weekly technology law column (Toronto Star version, homepage version) notes the competitiveness of the Canadian market is a foundational question since the answer has huge implications for legislative and regulatory policy. If the market is competitive, regulators (namely the CRTC) can reasonably adopt a "hands-off" approach, confident that competitive forces will result in fair prices and consumer choice. If it is not competitive, standing on the sidelines is not option, thereby pressuring government and the CRTC to promote more competition and to implement measures to prevent the established players from abusing their advantageous position.
Yet if there is a neutral arbiter on the state of wireless competition in Canada, it would be the Competition Bureau of Canada, an independent law enforcement agency responsible for ensuring a competitive marketplace. Indeed, in a recent submission to the CRTC, Bell cites to a 2005 Competition Bureau decision to support its contention that the market remains competitive.
Last month, the Competition Bureau offered its latest opinion on the wireless competitive environment and it wasn't even close: it believes the Canadian market is not competitive and regulation is needed.
The Bureau's opinion came in a submission to the CRTC on domestic roaming regulation. Both the Commission and the government have indicated they plan to pursue regulation to guard against abusive wholesale pricing of domestic roaming. The issue may be invisible to consumers, but it is a major concern for regional and smaller wireless providers, who rely on the national incumbents' networks for access in markets they do not serve. Those providers claim that the incumbents are charging unfair prices, thereby limiting their ability to compete.
While the national providers have been dismissive of the need for regulation (Bell has argued that entire process is "without legal foundation"), the Bureau examined the issue and concluded that companies like Bell can use roaming to shield themselves from competition, noting that "making it more costly for entrants to access incumbent networks through roaming agreements is one way for an incumbent service provider to relax competitive pressure."
If the market was competitive, this would not be a concern. However, the Bureau concluded that the incumbents enjoy "market power", which it defines as "the ability of a firm or firms to profitably maintain prices above competitive levels (or similarly restrict non-price dimensions of competition) for a significant period of time." Moreover, it rejected the University of Calgary study, concluding that it "does not provide adequate support for Bell's claims that mobile wireless markets in Canada are competitive."
Given its findings, the Bureau urged the CRTC to establish regulatory safeguards on domestic roaming pricing. New domestic roaming regulations may be the initial takeaway, but the Bureau's finding could have far bigger implications. Not only does it validate federal industry minister James Moore's insistence on the need for more wireless competition, but it also opens the door to examining other potential competitive barriers, including exclusive content deals, international roaming arrangements, and access to new smartphones.
This year's IIPA submission devotes several paragraphs to educational licensing, lamenting the shift away from Access Copyright and claiming that it is U.S. publishers that are being hurt in the process. According to the IIPA:
as soon as the new Act came into force, virtually all K-12 school boards across Canada cancelled their licenses with Access Copyright. Anticipated 2013 annual licensing revenue of at least C$12 million to right holders and authors - much of it destined for U.S. publishers, which enjoy a large market share in the educational sector - evaporated.
The IIPA urges the U.S. government to "engage" with Canadian authorities in the hope that they will tell Canadian educational institutions to pay Access Copyright. While that isn't likely to happen - the government rejected Access Copyright's demands for limitations on the expansion of fair dealing - the IIPA submission is notable for the claim that a large share of the Access Copyright educational licensing revenue was headed not for Canadian authors and publishers, but rather to the United States.
Those comments came to mind over the past week with the latest revelations about CSEC metadata surveillance. While the story has been characterized as an airport wifi surveillance issue, it is clear that the airport wifi angle misses the real concern. The leaked document and subsequent explanations reveal an attempt to identify travel patterns and geographic locations using user ID data over a two week period provided by a Canadian source (CSEC referred to this as metadata in the Senate committee hearing yesterday) along with a database of geo-locations of IP addresses supplied by Quova (I once served as an advisor to Quova). By identifying airport wifi IP addresses along with broader usage data and geo-identifying information, CSEC hopes to be able to identify locational movements of individual users. Bruce Schneier provides a helpful review of the likely intent of the program.
While some argued the program tracks Canadians and is therefore illegal (citing Charter violations and activities beyond the CSEC mandate), the Justice Minister maintains the program is legal and CSEC has defended the program in a release the day after the story broke and again at the Senate committee yesterday. Moreover, the CSEC Commissioner has posted a somewhat cryptic statement that emphasizes the independence of the review process. Ryan Gallagher has responded to those statements with a post arguing the denials are hollow.
I'm left with four takeaways from the past week.
First, CSEC's surveillance activities of Internet communications in Canada are far more extensive than previously realized. Its trove of metadata - presumably obtained with the cooperation of Canada's major telecom companies - provides enormous insight into the communications habits and activities of millions of Canadians. The use of metadata has been the subject of some concern from the CSEC Commissioner, yet the full scope of activities remain largely secret. Moreover, the ministerial directive on metadata appears to be so broad that it enables widespread tracking and surveillance as CESC is able to mine the data for a myriad of purposes.
Given those capabilities, assurances that metadata surveillance is less invasive than tracking the content of telephone calls or Internet usage ring hollow. Metadata can include geo-location information, call duration, call participants, and Internet protocol addresses. While officials suggest that this information is not sensitive, there are many studies that have concluded otherwise. These studies have found that metadata alone can be used to identify specific persons, reveal locational data, or even disclose important medical and business information. I discuss the issues associated with metadata - including Supreme Court of Canada and Bill C-13 concerns - here. For CSEC to argue that it otherwise does not track Canadians because it only accesses metadata, is misleading at best.
Second, the geographical limits of CSEC - its framework requires that foreign intelligence activities "not be directed at Canadians or any person in Canada" - are being completely blurred. The commingling of data through integrated communications networks and "borderless" Internet services residing on servers around the world suggests that distinguishing between Canadian and foreign data seems like an outdated and increasingly impossible task. CSEC's repeated references to the "global Internet" as opposed to the Internet might well be an attempt to emphasize the foreign component of largely Canadian-based activities. Indeed, the fact that CSEC focuses on Canadian-based metadata (CSEC was asked yesterday why it doesn't collect data from other countries instead) ensures that most of its metadata will include a Canadian component, thereby increasing the likelihood of Canadian surveillance.
Third, the government (including Justice and CSEC) are confident that the programs are legal under the current CSEC mandate. The metadata program operates under ministerial approval, which CSEC would argue extends to uses such as the IP location (or airport wifi) tests. Given the fears of being caught lying, it seems unlikely officials would adopt this position without internal legal reviews and advice.
Fourth, fixing the oversight of CSEC won't solve the problem. Better oversight is currently being touted as the solution to the surveillance problem. The Liberals are proposing a new parliamentary committee review committee, the federal privacy commissioner has identified opportunities for better reporting and oversight, and Ontario privacy commissioner Ann Cavoukian has called for improved transparency and accountability.
Reforms to the current oversight system are needed but the recent experience demonstrates why they are not sufficient. The current system would certainly benefit from external reviewers, who might be more aggressive in questioning the scope of CSEC programs and the stretching of its mandate. Yet the far bigger problem lies with the law itself:
- The use of
metadata should be openly examined by acknowledging that data
mining capabilities mean that metadata can have the same
privacy implications of the content of messages. Allowing CSEC
to conduct widespread surveillance under the guise that it's
"only metadata" is an incredible violation of basic privacy
expectations of most Canadians. The general ministerial
authorization has led to a system of widespread surveillance.
The scope of metadata must be better defined and judicial
authorizations for specific collections instituted.
- While the current surveillance statutes may have been developed in a world where geography mattered, the communications borders have been largely blurred leaving a North American communications network that has little regard for national boundaries. Canadian law is therefore increasingly unable to provide credible assurances about the limits of domestic collection. As long as CSEC provides the illusion that there is a "global Internet" and a "domestic Internet" that are somehow different, its activities will unquestionably feature a prominent domestic component.
- Data sharing
between agencies and between countries should be subject to
strict limits, yet the Mosley
federal court decision and the European
Parliament's discomfort with Canadian practices
highlight how these limits need to be re-examined. CSEC
officials often claim there are limits, but the Snowden leaks
have renewed doubts about what happens out of the public