Good afternoon, everybody. Welcome to another exciting meeting of the INDU committee while we continue our legislative review of the Copyright Act.
Today we have with us, from Teksavvy Solutions, Andy Kaplan-Myrth, vice-president, regulatory and carrier affairs; from BCE, Robert Malcolmson, senior vice-president, regulatory affairs, and Mark Graham, senior legal counsel; from Rogers Communications, David Watt, senior vice-president, regulatory, and Kristina Milbourn, director of copyright and broadband; and finally, from Shaw Communications, Cynthia Rathwell, vice-president, legislative and policy strategy, along with—he's not on our list—Jay Kerr-Wilson, legal counsel, Fasken.
Thank you, everybody, for coming today. Each group will have up to seven minutes to make their presentation and then we will get into our rounds of questioning.
We're going to get started right away with Teksavvy Solutions.
Mr. Kaplan-Myrth, you have up to seven minutes. Go ahead, please.
Good afternoon, Mr. Chair and committee members.
My name is Andy Kaplan-Myrth. I am VP, regulatory and carrier affairs at TekSavvy. I'd like to thank you for the opportunity to share our perspective and experience with the Copyright Act.
TekSavvy is an independent Canadian Internet and phone services provider based in southwestern Ontario and Gatineau. We've been serving customers for 20 years, and we now provide service to over 300,000 customers in every province. Over the years, we've consistently defended network neutrality and protected our customers' privacy rights, in the context of copyright and in other contexts.
TekSavvy is different from the other witnesses here today in two important ways, for the purposes of this review. First, while we take copyright infringement very seriously, we do not own media content that's broadcasted or distributed. We're appearing here as an Internet service provider and not as a content provider or rights holder.
Second, to provide services to most of our end-users, we build out our networks to a certain extent and then we use wholesale services that we buy from carriers to cover the last mile, to reach homes and businesses. Because of that wholesale services layer, things sometimes work very differently for us compared to for the incumbent ISPs.
I'm going to focus my comments today on two areas: First, notice and notice and our concerns with the way it currently works; and second, our opposition to proposals to block websites to enforce copyright.
I'll turn first to the notice and notice regime. When notice and notice first came into effect, TekSavvy expended significant resources to develop systems to receive and process notices. Maintaining those systems and hiring staff to process notices continues to be a challenge for a small ISP like TekSavvy. I'll get to our concerns, but I want to start by noting that, in principle at least, notice and notice is a reasonable policy approach to copyright infringement that balances the interests of both rights holders and end-users. At the same time, now that it's been in place for nearly four years, we can see that notice and notice needs some adjustments. We would recommend three tweaks to the current notice and notice regime.
First, a standard is needed to allow ISPs to process notices automatically in a way that's consistent with Canadian law. On average, we receive thousands of infringement notices per week. They come from dozens of companies and use scores of different templates, fewer than half of which can be processed automatically. In effect, notice forwarding is an expensive and difficult service that we provide to rights holders at no cost and for which we're expected to provide a 100% service level. That's not sustainable.
Infringement notices are emails that generally have a block of plain text followed by a block of code. Some senders use notices with a block of code that follows a Canadian standard, which contains all of the elements of the Copyright Act that allow us to forward those notices. If they have the code that follows the Canadian standard, those notices can be processed automatically, without the need for a human to actually open them and review the content.
However, many notices use code adapted from American copyright notices that don't include everything we require in the Canadian Copyright Act. Others are in plain text only; they have no code. When that happens, a human needs to actually read the text of the notice to confirm that it has the required content before it can be forwarded. Both of those notices have to be processed manually. That's work-intensive and slow—and realistically, it is not sustainable as volumes increase. If rights holders were required to use a Canadian notice standard, ISPs would be able to automatically process their notices and better handle a high volume of notices.
Second, a fee that ISPs could charge to process notices should be established. Currently there's essentially no cost for rights holders to send infringement notices. As long as they can send notices at no cost, then even if they get settlements from only a small number of end-users, there will be a business model for rights holders to send greater and greater volumes of notices. Rather, ISPs bear the cost for processing those notices and then answering the many customer questions they generate. Even a small fee would help to transfer the cost back to rights holders from ISPs and constrain the volume of notices. We already get thousands of notices per week. I expect larger ISPs get far more.
I'm not necessarily suggesting we need to reduce those numbers, but we need to create some economic pressure to prevent them from ballooning indefinitely. The Copyright Act already contemplates that a fee could be established, and we recommend that a fee be established to protect ISPs and end-users from being flooded with unlimited numbers of notices.
Third, infringement notices should not be able to contain extraneous content. Many infringement notices contain content that is intimidating to end-users or that can violate customer privacy. In some cases, they don't reference Canadian law at all.
Some notices include content that's more familiar from scams and spam: advertising for other services, settlement offers, or personalized links that secretly reveal information about the end-user to the sender. This puts ISPs in a difficult position, since we're required to forward notices to end-users, including whatever extraneous, misleading or harmful content may be included. This does not serve the purposes of the notice and notice regime, and we recommend that the content or form of notices be prescribed so they can contain only the elements they are required to contain.
Finally, turning briefly to site blocking, earlier this year a group of media companies proposed a new site-blocking regime to the CRTC aimed at policing copyright infringement. TekSavvy opposed that proposal at the CRTC, and we would oppose any similar proposal here. Simply put, such site blocking would be a violation of common carriage and network neutrality without being especially effective, all without any real urgent justification. TekSavvy strongly encourages you to oppose any such site-blocking proposals.
Thank you. I will be pleased to answer any questions.
Thank you, Mr. Chairman and honourable committee members.
My name is Robert Malcolmson, senior vice-president of regulatory affairs at BCE. With me today is my colleague Mark Graham, senior counsel, legal and regulatory at BCE. We appreciate your invitation to provide Bell's views on how to maximize the benefits to Canadians and our economy through the review of the Copyright Act.
Bell is Canada's largest communications company, employing 51,000 Canadians and investing $4 billion per year in advanced networks and media content. These investments allow us to provide advanced communications services that form the backbone of Canada's digital economy. We are also a key supporter of Canada's cultural and democratic system, investing approximately $900 million per year in Canadian content and operating the largest networks of both TV and local radio stations in the country.
I think we bring a unique and balanced perspective to the issues you are considering. As a content creator and major economic partner with Canada's creative community, we understand the importance of copyright and effective remedies to combat piracy. As an Internet intermediary, we also understand the need for balanced rules that do not unduly impede legitimate innovation. I look forward to sharing this perspective with you today.
I'll begin with piracy. There is an emerging consensus among creators, copyright owners, legitimate commercial users and intermediaries that large-scale and often commercially motivated piracy operations are a growing problem in Canada. Piracy sites now regularly reach up to 15.3% of Canadian households through widely available and easy-to-use illegal set-top boxes. This is up from effectively zero five years ago.
In addition, last year there were 2.5 billion visits to piracy sites to access stolen TV content. One in every three Canadians obtained music illegally in 2016. Each of these measures has grown significantly over time. According to recent research conducted for ISED and Canadian Heritage, 26% of Canadians self-report as accessing pirated content online. TV piracy in Canada has an estimated economic impact in the range of $500 million to $650 million annually.
In the light of these concerning trends, we believe the most urgent task facing the committee in this review is to modernize the act and related enforcement measures to meet the challenges posed by global Internet piracy without unduly burdening legal businesses. To be clear, this does not mean targeting individual Canadians who are accessing infringing material. Rather, it means addressing the operators of commercial-scale copyright-infringing services. It is these large infringing operations that harm the cultural industries that employ more than 600,000 Canadians, account for approximately 3% of our GDP, and tell the uniquely Canadian stories that contribute to our shared cultural identity.
With this in mind we have four recommendations.
First, we recommend modernizing the existing the criminal provisions in the act. Criminal penalties for organized copyright crime are an effective deterrent that do not impact individual users or interfere with legitimate innovation.
Section 42 of the Copyright Act already contains criminal provisions for content theft undertaken for commercial purposes, but they have grown outdated. They deal with illegal copying, while modern formats of content theft rely on streaming. These provisions should be made technologically neutral so that they apply equally to all forms of commercial-scale content theft.
Second, we recommend increasing public enforcement of copyright. In jurisdictions such as the U.K. and the United States, law enforcement and other public officials are actively involved in enforcement actions against the worst offenders. The committee should recommend that the government create and consider enshrining in the act an administrative enforcement office and that it direct the RCMP to prioritize digital piracy investigations.
Third, we recommend maintaining the existing exemptions from liability related to the provision of networks and services in the digital economy. These exemptions protect service innovation without diluting the value of copyright.
Fourth and finally, we recommend considering a new provision that specifically empowers courts to order intermediaries to contribute to remedying infringements. This would apply to intermediaries such as ISPs, web hosts, domain name registrars, search engines, payments processors, and advertising networks. In practice this would mean that a new section of the Copyright Act would allow a court to issue an order directly to, for example, a web host to take down an egregious piracy site, a search engine to delist it, a payment processor to stop collecting money for it, or a registrar to revoke its domain.
While financial liability for these intermediaries is not appropriate, they can and should be expected to take these reasonable steps to contribute to protecting the value of copyright, which is essential to a modern digital and creative economy.
Thank you for the opportunity to present our views. We look forward to your questions.
Thank you, Mr. Chairman and members of the committee.
My name is David Watt and I am senior vice-president, regulatory, at Rogers Communications. I am here with Kristina Milbourn, director of copyright and broadband at Rogers. We appreciate the opportunity to share our views with you today.
Rogers is a diversified Canadian communications and media company offering wireless, high-speed Internet, cable television, and radio and television broadcasting. We support a copyright act that takes a balanced approach to the interests of rights holders, users and intermediaries, thereby optimizing the growth of digital services and investments in both innovation and content. As a member of both the Canadian Association of Broadcasters and the Business Coalition for Balanced Copyright, we support their comments in this review.
When we appeared before this committee five years ago, we defended the notice and notice regime as a useful deterrent to copyright infringement occurring through the downloading of movies using BitTorrent protocols. Since then, Canadians have fundamentally changed the way they obtain and view stolen content. A November 2017 survey commissioned by ISED and Canadian Heritage found that Canadians are increasingly using streaming to view stolen content online. Sandvine, a Canadian company that conducts network analytics, reported that in 2017 roughly 15% of Canadian households were streaming stolen content using preloaded set-top boxes. These boxes access an IP address that provides the stream. While illegal downloading remains a major problem for rights holders, illegal streaming has become the primary vehicle by which thieves make the stolen content available. We need new tools in the act to combat this new threat to the rights holders and to our Canadian broadcasting system.
We have watched the rise of streaming stolen content with deepening concern. We have taken action using the existing remedies under the act, but these remedies are insufficient. We need new tools in the act to combat this new streaming threat. We recommend two amendments to the act that will make a difference.
First, the act should make it a criminal violation for a commercial operation to profit from the theft and making available of exclusive and copyrighted content on streaming services. In our experience, the existing civil prohibitions are not strong enough to deter this type of content theft.
Second, the act should allow for injunctive relief against all of the intermediaries that form part of the online infrastructure distributing stolen content. An example is a blocking order against an ISP requiring an ISP to disable access to stolen content available on preloaded set-top boxes.
This would be similar to action taken in over 40 countries, including jurisdictions such as the U.K. and Australia. The FairPlay coalition, of which Rogers is a participant, asked for this in its application to the CRTC filed earlier this year. This injunctive relief would serve to support and supplement that application.
In addition to these amendments addressing illegal streaming, we also have recommendations for improving the notice and notice regime. These proposals would protect Canadians against settlement demands and copyright trolling.
First, we fully support the government's position that future copyright notices must exclude settlement demands. We recommend that notice and notice provisions be amended to prohibit rights holders from making settlement demands in notices. We also recommend that the government prescribe, by regulation, the form and content of legitimate notices that an ISP would have to process under the act. A prescribed web form would prevent improper information from being entered into the notice.
Second, this is with reference to the case recently determined by the Supreme Court of Canada regarding reasonable costs of an order to disclose information, or a Norwich order. This order is the subsequent step after a notice and notice form has been sent out for those people who wish to pursue further action. The minister should set a rate per lookup and attach it as a schedule to regulations made under the act. Based on Rogers' costs, a rate of $100 per IP address would be appropriate. This approach would provide transparency to all those involved in Norwich order requests.
These are our brief comments, and we'd be pleased to answer any questions you may have.
Good afternoon Mr. Chairman and committee members.
My name is Cynthia Rathwell, vice-president, legislative and policy strategy at Shaw Communications. With me today is Jay Kerr-Wilson, a partner at Fasken, whose expertise is copyright law. We appreciate the opportunity to present Shaw's view on this review of the Copyright Act.
Shaw is a leading Canadian connectivity company that provides seven million Canadians with services that include cable and satellite television, high-speed Internet, home phone services and, through Freedom Mobile, wireless voice and data services.
Shaw expected to invest over $1.3 billion in fiscal 2018 to build powerful converged networks and bring leading-edge telecommunications and broadcasting distribution services to Canadians. Annually, as a content distributor, we pay tens of millions of dollars in royalties pursuant to Copyright Board-approved tariffs, over $95 million in regulated Canadian programming contributions, and approximately $800 million in programming affiliation payments, $675 million of which is paid to Canadian programming services with predominantly Canadian content.
Accordingly, Shaw understands and wishes to emphasize the importance of a copyright regime that balances the rights and interests of each component of the copyright ecosystem. This balance is central to Canada's interest in maintaining a vibrant digital economy.
Overall, our Copyright Act already strikes an effective balance, subject to a few provisions that would benefit from targeted amendments. Extensive changes are neither necessary nor in the public interest. They would upset Canada's carefully balanced regime, and jeopardize policy objectives of other acts of Parliament that coexist with copyright as part of a broader framework that includes the Broadcasting Act and the Telecommunications Act.
Proposals to increase the scope, and/or duration of existing rights, introduce new entitlements, or to narrow the scope of existing exceptions would increase the cost of digital products and services for Canadians; undermine investment, innovation and network efficiency; and impact Canadians' participation in the digital economy. Stakeholders who argue for new entitlements or limitations appear to seek a simplified response to global market developments that are impacting the production, distribution, consumption and valuation not only of copyrighted works but also of goods and services provided by many, if not most, industries. The responses of most businesses, including Shaw, to market disruptions have been to invest and innovate, diversify, and improve the quality of service and customer experience in order to compete. Fundamental changes in the digital marketplace cannot simply be offset by new legislative entitlements or protections.
Calls for new rights appear, in part, to be based on the suggestion that copyright is a tool for the promotion of cultural content. The Copyright Act is concerned with promoting efficient markets and supporting the creation of works but generally without regard to a creator's nationality or where the work was created. As a result, attempts to use copyright as a cultural policy instrument would undermine the achievement of domestic cultural policy objectives established by other statutes. A clear example of this is the Border Broadcasters, Inc.'s proposal for retransmission consent rights for broadcasters, which, it argues, would support the production of local programming. Shaw is strongly opposed to that proposal.
If adopted, it would disrupt carefully calibrated Canadian copyright and broadcasting policy. It would require Canadians to pay billions of dollars per year in new fees for the same services, a large part of which would flow to the U.S., while creating the potential for loss of access to programming, as well as service disruptions. These impacts would undermine the competitiveness of Canada's broadcasting industry, incenting subscribers to turn away from the Canadian broadcasting system, ultimately at the expense of the Broadcasting Act's objectives.
Canada's Copyright Act provides that services related to the operation of the Internet are exempt from copyright liability solely in connection with providing network services. It also provides that those furnishing digital storage space are exempt from liability in connection with hosted content.
As an Internet service provider, Shaw strongly submits that these exceptions should be maintained. ISPs benefiting from the network services exception are subject to obligations under the notice and notice regime, and protection is denied where a network is found to be enabling infringement. Furthermore, the hosting exception is not available with respect to materials that the host knows infringe copyright. That being the case, Canadian law strikes the correct balance between incenting investment in network services and ensuring that these services support the integrity of copyright.
Some stakeholders have also called for the narrowing or removal of existing exceptions, such as the technological processes exception, that enable end-users and service providers to employ innovative and efficient technologies to facilitate the authorized use of works. Shaw strongly believes that these exceptions represent a balanced approach that maximizes Canada's participation in the digital economy.
While Shaw believes that the Copyright Act overall is well balanced, minor changes should be made to the notice and notice framework to curtail abuses, such as regulations mandating that notices be transmitted to ISPs electronically and in a prescribed form. This has already been discussed in detail today.
As well, Shaw submits that new measures are needed to enable creators to enforce rights against commercial-level online piracy. This will help ensure that rights holders receive fair remuneration and that networks are protected from malicious malware frequently associated with piracy sites. We therefore support an amendment to the Copyright Act's civil remedies to clarify the Federal Court's authority to order ISPs to block access to websites found to be infringing.
In conclusion, Canada's Copyright Act achieves an appropriate and thoughtful balance between creator, user, and intermediary interests, subject to the minor amendments that we've recommended. The extensive changes requested by various stakeholders would disrupt the achievement of policy objectives pursuant to the overall legislative framework governing copyright, broadcasting and telecommunications.
Thanks very much. We look forward to your questions.
There are existing legal remedies to combat piracy through potentially getting a blocking order from a court. We've found through experience that those are ineffective.
Some of the reasons why they're ineffective are, generally speaking, that piracy operators operate anonymously, operate online and operate outside of Canadian jurisdiction. Those factors combined make it very difficult to use traditional remedies to enforce a court order against a defendant that is essentially either unknown or not findable. That's number one.
Number two, under the Telecommunications Act, as you probably know, there's a specific provision—section 36—which states that in order for an Internet service provider, an ISP, to have a role in the dissemination of content that it carries, it needs authorization from the CRTC. In a world where Internet service providers are blocking egregious piracy sites, you need the permission of the CRTC.
From the FairPlay coalition's standpoint, we went to the CRTC with that application under a specific provision of the statute. We're all saying that there are ways to perhaps improve the judicial process under the Copyright Act to effect a similar result so that piracy can be combatted on both fronts.
Well, I don't think we should be focused on blocking other content, because now we're running up against network neutrality in our common carriage roles.
My point is that if we were going to look at illegal content, we would be talking about terrorism content. You know, there are bad things out there.
We carry the bits, and we do that because we're common carriers. We carry the bits without looking at them. Just as you can pick up the phone and speak to another person and say whatever you want on that phone line and that phone company won't cut off your call because of the words that you say, we will carry the bits.
I think the large ISPs are preoccupied with copyright in particular, and website blocking to enforce copyright, because of their interests on their media sides.
Certainly. A vertically integrated company, in our context, is one that owns content, and then as you go up, it is vertically integrated because that content is then distributed through the distribution arm, whether it be the wireless company or the cable company. It's vertically integrated in that sense. It goes up the chain. It's not a horizontal integration of a different service. It is a service that you own, which is then distributed by an entity that you own as well.
I will say, though, that it is essentially a red herring, the vertical integration argument. We are here today as content owners, and we have every right to protect the content we own. The CRTC in Canada has very strict rules, as Andy has mentioned, in terms of common carriage and net neutrality. There is no confusion in the sense that we are able to favour our content on our distribution arm. That's not the case. It is treated equally with the content of people who do not have a distribution arm.
I don't really understand the argument. I can see that the economic argument, you're saying, is possibly that you want to protect your content. You don't want that stolen. You want to have compensation for it. At the same time, when people are able to access the stolen content, they have less incentive to subscribe to your distribution arm. That's absolutely true. In terms of content, we have to protect that, and we have a commercial interest in having people stay connected to our cable arms. But the country also has an interest in having them stay connected to our distribution arms.
Rogers, in the terms of our cable distribution plan, contributes roughly just a little less than $500 million a year to the creation of Canadian content. People have focused on the 5% contribution to the media fund and the copyright payments that we make, but we also pay $500 million a year to Canadian programmers in affiliation fees. These are Discovery, TSN, Sportsnet, MuchMusic, and HGTV. Of that $500 million, on average 44% of every dollar of revenue of those programmers is spent on Canadian programming, so there are significant ramifications.
Thank you for being here.
Mr. Kaplan-Myrth, I appreciate your presentation. Having a consistent mechanism is obviously something that should be done. This doesn't have to wait for this committee process to review something, send it to the minister and get back. It's a regulatory change that can and should take place, and I can't understand why it's so difficult to deal with.
I do want to deal with an issue, though. Piracy has been brought to our attention again. I live in an area that has had, over the years, everything from ONTV, which came from the United States, to smaller direct TV boxes for which program cards used to be used.
Obviously, Canadians are motivated to go to online privacy. Bell, Rogers, and Shaw, why do you think your own customers, who you supply service to, are choosing piracy options even through your own feed streams versus using the other services you offer? There needs to be a connection or a discussion about that, especially with Bell. You have noted 15% in your submission here. You're claiming it's $500 million to $650 million in lost revenue. Why do you think it is that your own customers are not choosing your own services and are instead deciding to go to piracy?
I will start, and others may have comments.
I think some consumers have grown up in the age of the Internet where content is widely available for free online, and if they can access it, they don't give a second thought to whether they are accessing something that someone else owns a copyright on. It's available; they consume it.
Oftentimes critics of ours will say that if we made our Canadian content, for example, available at more reasonable prices, people would then consume it. They lay the problem at our doorstep.
I will give you a practical example. That's not the problem in our experience. There's a show called Letterkenny, which is an originally produced Canadian comedy that is very popular. It's available on our over-the-top platform CraveTV. I think all four seasons of it are available on Crave for a subscription price of $9.99 a month. If you want to consume Letterkenny legally, it costs you less than 30¢ an episode to get it.
We are making Canadian content available online the way people want to consume it and at reasonable prices, yet piracy continues to grow.
—but I'll take a crack at it based on what I know about the area, briefly.
It's really a question, when you look at those legitimate sites, about the licensing fees that have been negotiated and what they ultimately pass on to artists, whom you hear from. It's also a question, when you talk about a site like YouTube, of the enforcement that's on that site to try to prevent illegal content from being on it.
YouTube is usually held up as having fairly robust systems to police that sort of thing, so maybe we would talk about some other site. What you're really seeing, when you look at those legal sites, I think is a change in the balance of what those companies take and what they pass on to the artists.
I just wanted to clarify something Rob was saying. I think there are a lot of things to be explored about the role of over-the-top services per se within the system. I also agree with Andy that, to a large extent, in terms of pure copyright, it's a matter of the contractual relationships they're entering into.
I know that a lot of Canadian producers are very happy with their relationships with Netflix, and that's to the consternation of some of the Canadian media companies that are competing for rights. I want to clarify, just for the record, that Shaw isn't a vertically integrated company when it comes to having media holdings, so I say that quite objectively. We have an affiliated company that's a separate, public company, which is Corus. We are a connectivity company.
Getting back to your question about whether or not there's a role for the intermediaries in supporting the artists or—I don't want to veer too far away here—Canadian content, I think from Shaw's perspective, it's very important to look at the genesis of the current exemptions in the common carrier idea that underlay ISPs. That was established, originally, in the Railway Act. That should continue, because we're trying to build out advanced networks across this country. Saddling ISPs with those sorts of support mechanisms for artists, in the context of either copyright or broadcasting, is something that Shaw wouldn't support.
Thank you to our witnesses for appearing.
It seems to me that this is a very similar problem to the one we have with all of these illegal phone calls purporting to come from CRA. Over the last number of years, tens of thousands of Canadians have been harassed by these calls. Over $10 million has been stolen from Canadians because of this, and there are really two ways to go about shutting this activity down. One is to block the phone numbers; the alternative is to shut down these call centres.
I don't think blocking the phone numbers is a realistic way of going about it, because anybody can get a burner cellphone and get a new phone number pretty quickly to restart the scam. Thus, shutting down these call centres is pretty important. Many of them are outside of the country, in places such as Mumbai, India. I think that's the solution to it.
Similarly, when we're looking at illegal set-top boxes or illegal streaming services, we can try to ban the sale of these illegal set-top boxes, but I don't think that's realistic. There's new technology, new hardware, new software coming along all the time. Open platforms such as Android allow people to produce these programs. I don't think that's the solution. Really, to me, it seems that the solution is to shut down the servers that are hosting this illegal streaming of content.
My first question is, where are most of these servers located, in Canada or outside of Canada?
I'll direct my questions to BCE.
Yes. There are various technical issues here. Without taking too long and going too far into the weeds, I'll say that this is a great example of why people call this sort of regime a slippery slope. If we start down this road of requiring blocking, we're going to run into one problem after another for which this is ineffective.
DNS blocking is a way of basically taking a phone number out of the phone book; it's disassociating the IP address from the domain name. It does not block access to the website. It doesn't stop end-users from using alternative DNS providers, which are provided by major companies, including Google. Many users use them because those DNS providers are sometimes faster than their own ISPs.
If we block using DNS blocking and remove those, then we're going to be back here five years from now talking about why we need to implement deep packet inspection, and five years after that, we're going to be talking about why we need to block VPNs. After that, you can bet that users are going to find other ways to circumvent each of these ways of blocking them.
What we need to do is protect the regime that we've had all along, which is common carriage. We carry the bits. We don't look at them. We don't judge them. We don't decide what to block.
I don't want to rank ourselves vis-à-vis our colleagues. I think we've done very well with the rollout of the skinny basic, and I think our customers have responded. It suits some of their needs. It's available, and it's the basis for all packages on which we build. Whether it goes to content packages or pick and pay from there, our subscribers are happy with it. We think the price is reasonable.
If we're talking about the attractiveness of “free”, I could turn for a second to an experience we had on the satellite side with the local television satellite service program. This was a benefit that we offered up to the CRTC to provide a package of free local signals to Canadians who had lost access to over-the-air transmission because of the digital transition. Their transmitters hadn't been converted to digital. We offered it to a maximum of 33,000 people, and 35,000 or more subscribed.
There was no way to scientifically monitor who was taking it. A lot of the people clearly were taking it from their cottage. A lot of them were taking it from areas where there were local signals available; they just wanted it for free. We continue to get calls that are beginning to express concern about the fact that this program is time-limited. It was for the duration of a licence. About seven years is what it's been offered for.
We're happy to have had that stopgap, but it was illustrative to us that free is very attractive. It's not matter of a failure of our skinny basic offering or our services.
I think you mentioned when you were asking the question that maybe we could do something on the injunction. What we've requested in our remarks today is that injunctive relief directly against intermediaries in the Federal Court would be a significant help on this issue.
There are a few reasons why we thought about the CRTC for the FairPlay application. One is that the CRTC is often seen as more accessible, for smaller litigants in particular, which might include creators and rights holders, who can't as easily pursue something through a lengthy Federal Court process and are familiar with the CRTC. I think it's also more accessible for small ISPs who often appear before the CRTC and have expertise in that area. That's one reason.
The other reason is section 36 of the Telecommunications Act, which says that CRTC approval is required for a service provider to disable access to a piracy site. In the CRTC's view, that applies even if a court has ordered you to disable access.
If the situation is that you go to court and then you have to have a duplicative proceeding at the CRTC anyways, and given that what we're talking about is the management of the country's telecommunications networks and we have a regulator that's tasked with managing the regulation of those networks, it seemed appropriate to be there.
I want to pick up on net neutrality for MP Graham.
I disagree with this, but I think it was very smart of many of you here today to lump your concerns in with the wider category of illegal activity. That may be categorically correct, but I think most people would hope, when an RCMP officer sees someone driving dangerously down the road, that he or she would immediately move to protect the public's interest. We would hope the officer would do this rather than stopping and saying that there is an illegally parked car to the side, and then going under a municipal bylaw while there is obviously a moving concern.
I think you're trying to protect the interests of your company, and that's totally noble. We need you to do that. However, again, you're protecting the rights of your companies versus the wider interests and rights of everyone when we talk about public safety and whatnot.
As far as net neutrality goes, I will tolerate child pornography, terrorism recruitment and those kinds of sites being taken down as a point, because it's practical and it must be done. On the flip side, I disagreed with the government of Quebec when it tried to shake down ISPs outside of its jurisdiction to basically force gaming sites to come under their umbrella, so they could collect more revenue. I think you can't equate the two.
You're asking for a quasi-judicial branch of the CRTC to basically streamline your applications because you believe it's illegal, yet when the RCMP or our security apparatus need to take something down, they have to go through a judicial process of approval, get warrants, etc., to have those things done. Why do you think your needs should be streamlined while those that are more subject to public concern, things like terrorism and child pornography, have to go through a series of checks and balances for which we know there is judicial review?
I'll start with Bell, because you guys had the last word on illegal.
There are two things that could be done to help speed up the process or make it more efficient using the Federal Court as a tool.
One is to clarify the court's powers to order the specific blocking of a URL or to de-index it from a search engine to avoid the jurisdictional fight of whether that's actually within the wide ambit of injunctive relief that the Federal Court can grant. So, make it explicit, specific and clear that it's within the Federal Court's powers, because the Federal Court is sometimes a little leery about granting injunctive relief, and you want to give it comfort that this is actually what Parliament intends.
The second thing, to the point that Bell raised, is that right now you have a regime in which even if the court orders all ISPs to block access to specific content, you then have to go to the CRTC to ask for permission to do what the court has told you to do, and there's no guarantee the CRTC is going to say yes. That could put carriers in a position where they're either in breach of the Telecommunications Act or in contempt of court. That can't be good public policy, no matter what you think of FairPlay or any other initiative. Surely the CRTC has to be told that it has to allow ISPs to satisfy an obligation pursuant to a court order. That just seems to be common sense.
I saw the stuff on piracy that was presented, and it is really important for us to have the discussion here today. One of the reasons I was interested is that we have heard from artists and creators very explicitly that they're concerned about their future. I'm not sure that even resolving that is a silver bullet.
In the area I represent is a place called Sandwich Town. It's the oldest European settlement in Canada west of Montreal. It's where the War of 1812 was fought. It's where the Underground Railroad was. There were rum runners and a whole series of things. Today, though, it's challenged by economic poverty, the closure of schools, and pollution. It has one of the highest rates of poverty.
I tell you all of this because right next to Sandwich Town is the Ambassador Bridge. The Ambassador Bridge has about $1 billion of activity per day. About 35% of Canada's daily trade takes place in my riding. A private American citizen owns the Ambassador Bridge. It's right next to Sandwich Town. In fact, they actually bought up houses. They boarded them up and knocked them down. It's quite lucrative, though. Matty Moroun, who owns it, is in the top 40 billionaires in the United States, and a lot of economic activity takes place right next door.
Now we, on the other side of Sandwich Town, a new border crossing called the Gordie Howe bridge. You might have heard of it. I've spent 20 years of my life trying to get a new public crossing. It's about $4 billion to $6 billion. There is very little activity taking place in Sandwich Town from this. There are supposed to be community benefits, but we don't even know how much. Essentially, right now, it hasn't really done a whole lot for the area. We're still waiting.
In front of Sandwich Town is the Detroit River, and then we have what's called the Windsor Port Authority. The Windsor Port Authority is a multi-million dollar operation that's doing quite well on its own, but it also has this lucrative new border crossing that's going to be coming into place along with other extensive work. If the Ambassador Bridge gets to twin, which the government has provided them a permit to do, we'll receive a major economic benefit from them.
On the other side of Sandwich Town is a railway that goes to a Canadian salt mine and other operations. It's a multi-million dollar operation, but it's smaller than the others. It's not CP. It's not CN, but it's doing okay—the Essex Terminal Railway. In between all of this, what people have gotten from the multiple billions of dollars of activity around them is nothing. They have closed schools, closed businesses, and closed the post office, and they have the highest rates of poverty.
I have to say that this is what concerns me, and I feel the artists that we've heard from are in the same predicament.
Do you have any suggestions whatsoever, in the time remaining, for what you can do, other than just hoping royalties will roll in if you stop piracy, to help improve artists' compensation in Canada? Even if it's not within the jurisdiction of your own company, is there anything you can suggest to this committee?
I fail to see how ending piracy alone.... Is there something new or different? I'm open to suggestions. You may not want to answer—I don't know.
Mr. Chair, we heard about this when we did our travel, and I see that we're still going on about the same thing.
Is there anything that anybody here can offer for those individuals?
I actually used to go to school in Windsor and I lived under the Ambassador Bridge. I took my family there to see where I lived in college and, of course, it was gone. There's not much left there.
In terms of suggestions we would make, as I said at the beginning, cultural industries actually employ 630,000 Canadians and contribute 3% to our GDP. They are playing their role in the employment of Canadians. To the extent that piracy, if you agree with our perspective, is undermining that system, certainly stopping piracy, constraining piracy and limiting it will help the existing ecosystem that employs Canadians and creates jobs. If I'm an artist creating content, if I'm the producer of Letterkenny, I certainly want to know that the government is trying to stop the leakage of my intellectual property outside of Canada and that I'm being fairly remunerated for what I've created.
I think stopping piracy isn't all about trying to help the vertically-integrated companies. That's not it at all. It's about protecting those who create our content and making sure they're paid for it.
I think that's consistent with the comments of Shaw.
I think just speaking at a very high level, there are myriad commercial relationships between artists and the different enterprises for whom they are producing content. At one level, it appears very simple to advocate the introduction of a new right to add to artists' income. We had some discussions about the sound recording right, and soundtracks, and it seemed like a simple fix. It's not really a simple fix. It would unsettle the broadcast industry in Canada and it would have impacts on the broadcasting system to do that in terms of cost. There are also direct relationships between the artist, in that case, and the producers of the recordings they're making.
So at a high level, it seems as though there may be simple fixes in copyright by creating new rights, but when you drill down on it, as David said and as we said, there's a very complex framework at both the public policy level and the commercial level.
From our perspective as a regulated broadcast distributor, we believe we make incredibly important contributions to the broadcasting system. As a telecom provider, we believe we meet public policy objectives. All of this comes together to help Canadian artists. Unfortunately, copyright isn't a terrific mechanism, from a national perspective, in terms of executing domestic cultural policy.
I'm not an expert on international copyright developments, but as I understand it, article 13 has not yet been implemented. There are still some negotiations that have to take place within the European structure. We don't know what the final version will look like. Basically, it puts the onus on platforms that have user-generated content uploaded to them—i.e., YouTube and Facebook. It's not on the ISP level. It's on the platform level. It says you need to have a system in place to try to prevent unauthorized uploads of content. YouTube already has a very robust system of content match.
Now, YouTube's problem, they say, is that right now, if they find unauthorized content, they let the rights holder either take it down or monetize it. They can say, “You can keep the money or we'll take it down.” Their complaint about EU's article 13 is that it looks as though it forces them to take it down, and it takes the monetization away.
Canada doesn't have the same framework. If YouTube is engaged in communication of public copyright-protected content for a commercial purpose, copyright in Canada applies. Royalties have to be paid or, if it's unauthorized, it has to be taken down.
It's not getting at the problem. This isn't going to put money in anyone else's hands. This is just a way of reducing the amount of unauthorized content available on the YouTube platform. YouTube already does that. So it's a bit of a solution in search of a problem, and it doesn't really translate to what we're—
Thank you very much. We've covered a lot today, and I thank you for that testimony on a variety of subjects.
There's a subject we haven't touched on, but we've heard it in different parts of the country when we travelled, and we've heard different testimony on it. It goes to what Robert said about pirating, which is that some people just don't think that what they're doing is wrong. They're not educated. There are a bunch of institutions and different groups that are educating people about the infringement of copyright through piracy.
Is your group, are your companies, able to do or doing educational programming about large companies with access to a lot of people.
Don't spam them. We went through a whole bunch of testimony on that. Seriously, you do have different ways of communicating to the people. The government has a role to play in that, but it's just like anything, whether it's seat belts, drinking and driving, or texting. A a certain amount of education needs to happen with the people.
I'll start with Robert.
It's not that we're necessarily liable for it in any way, since we're required by law to pass it on. The sort of thing I'm talking about there is the personalized links that appear in those notices.
The notice we receive will tell the end-user to “click here to confirm that you have received this notice”, and then it will have a link. It's not just a link to a website; it's a link with variable tags that identify which notice it was. What it means is that when the end-user gets that notice and clicks the link, the sender now has the IP address and other information about the person's computer and browser that they can associate with that notice. They have information about the individual that they didn't have before.
By passing that on, we're making our end-users vulnerable in a way that doesn't feel like it serves the purposes of the notice-and-notice regime. The end-user, in turn, gets that message from TekSavvy or from the ISP, not from the rights holder. We write some information as sort of an envelope around the notice that explains to the user that it is not from us, that we are just passing it on, and that we're required to pass it on, and all that sort of information. But then we have to provide the notice as it's given to us, including advertising for a potential competitor of ours. That puts us in a difficult position, and it's completely extraneous information.