Content producers and rights holders may have cause for celebration as a loophole in the Copyright Act that has given way to the likes of iCraveTV and JumpTV may soon be closed.

Bill C-48, an act to amend section 31 of the Copyright Act, had its third reading in the House of Commons on June 18 and was passed unanimously, although is still to be approved by the Senate. Section 31 pertains to the compulsory licence that allows retransmission of copyrighted works without permission from copyright holders through royalties set by the Copyright Board.

The amendment sets the stage for establishing rules and conditions under which Internet retransmitters can operate. The exact nature of those regulations will likely be determined by the CRTC, which was recently asked by the Heritage Ministry to reconsider its 1999 position on regulating new media.

When the CRTC initially claimed it would take a hands-off approach to the Internet unless it posed a danger to broadcasters, the possibility of retransmission by new media broadcast undertakings was not considered. However, with companies like iCraveTV and JumpTV emerging over the past two years, retransmission has become an issue. The CRTC will hold a public process and has been asked to issue a report to the government no later that Jan. 17, 2003.

For broadcasters, the new legislation ‘denies Internet retransmitters the opportunity to attempt to hide behind the compulsory licence provision in section 31 and retransmit broadcast signals over the Internet,’ says Canadian Association of Broadcasters president Glenn O’Farrell. ‘It means that if you want to become a distributor, by way of the Internet, it would require you to go to the CRTC and seek their approval, rather than circumvent the CRTC and the contribution that other distributors make.’

According to Bruce Stockfish, director-general of copyright policy, Department of Canadian Heritage, in addition to licensing broadcast distribution undertakings, the CRTC could also issue orders with specific conditions. Based on the kinds of conditions issued to cable and satellite, Stockfish speculates that the CRTC could enforce mandatory carriage orders, an obligation to contribute to Canadian programming and/or an obligation not to alter signals, with banner advertising, for example.

‘Over the past few months we’ve been trying to come up with the appropriate regulations that would set out conditions for Internet retransmitters to operate,’ says Stockfish. ‘The essential condition is some kind of limitation that would require Internet retransmitters to keep their signals in Canada.’ The concerns rights holders and broadcaster have is that due to the global nature of the Internet, they will not have the ability to sell their rights to distinctive geographic markets.

Whether the technology exists to restrict Internet transmissions to Canada remains unclear. However, Stockfish says Internet companies ‘must have the technology to keep their signals within Canada. If they do not, no compulsory licence, no ability to retransmit without the permission of the rights holders.’

Jay Thompson, president of the Canadian Association of Internet Providers, is concerned that mandatory licences for Internet retransmitters may open up a Pandora’s box in terms of regulating the Internet. ‘Our position all along has been that regulation is unnecessary because the objectives of the Broadcasting Act are being met by Internet companies without regulation,’ he says.

Thompson says that as far as he knows, JumpTV has addressed the geographical issues and has agreed to pay the compulsory licence fees and should thus be treated no differently than a cable company.

‘[The passage of C-48] is exciting for us because it means we are going to be able to engage in what we’ve wanted to do. The downside is that we’d have to get a licence from the CRTC, but that’s okay because all the other competitors have to do that, too,’ says Farrel Miller, CEO of JumpTV. ‘We’re trying to give Canadians the option of watching TV through their PC if they choose to. At the end of the day, that’s what this is about.’

Miller confirms that his company does have the technology to restrict its transmissions to Canada, but is unsure whether the CRTC will make that a prerequisite of getting a licence. ‘The satellite DTH guys who operate in Canada don’t have any technology to limit their transmission to within Canada. Why should there be different rules for different people,’ asks Miller.