Bill C-52 (Historical)

An Act to amend the Radiocommunication Act

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, I am pleased to answer all these questions.

This afternoon, the House will proceed to the report stage of Bill C-19, the first nations fiscal legislation. If this is completed in time, we will call Bill S-13, the census bill.

Tomorrow morning the business will be Bill C-51, the amendments to the Canada Elections Act. In the afternoon, pursuant to the offer made by the hon. member and others, we will proceed with Bill C-57, for our aboriginal community of Westbank, and hopefully will do all stages.

There have been discussions among House leaders. I understand that we could also, pursuant to the outcome of further negotiations, deal with Bill C-56.

We would then return to Bill C-52, the radiocommunication bill.

On our return from the remembrance week break, we will return to the unfinished business from this week. We will also commence report stage of such anticipated legislation as Bill C-38, the marijuana bill.

May I in conclusion thank all House leaders for the excellent cooperation they have given me throughout the last several years. Of course I will get to say that when we come back in November. I thank the right hon. Prime Minister as well.

Radiocommunication Act

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Mr. Speaker, I rise today to speak against Bill C-52, an act to amend the Radiocommunication Act. According to the Liberals, we need this bill to fight the “financial and cultural damage that illegal satellite dishes and the piracy of intellectual property have caused in our country”.

It is interesting that just today the Minister of Canadian Heritage tabled the response of her department to the report that was put forward by the heritage committee, of which I am vice-chair, on the state of broadcasting in Canada.

What is interesting is that in spite of this urgency, the minister in her response was totally silent on this issue. Let me repeat this very serious thing that they are talking about, that they have to fight the financial and cultural damage that illegal satellite dishes and the piracy of intellectual property have caused in the country.

This line of reasoning happens to come directly from a June 2003 presentation to the Liberal caucus by the Coalition Against Satellite Signal Theft. The coalition made a presentation to the Liberal caucus, but it should not be too surprising that the minister was paying particular attention because the coalition members did, after all, donate 25% of her spending limit in the 2000 election, or over $15,000 to the election campaign of the Minister of Canadian Heritage. One would have to say that it obviously got her attention.

On page 18 of the coalition's presentation, it calls for increasing fines for individuals watching unauthorized television from $5,000 to $25,000 and a year in prison. It also calls for a restriction of imports of dish network and direct television systems and the seizure of such systems at the border.

Bill C-52 implements every recommendation of the coalition. It is interesting to note that Bill C-52 was first read on October 22 this year, roughly a month before the CRTC's November 14 deadline for public submissions on how to best support Canadian television drama. Presumably those submissions could have informed the debate on Bill C-52, as we struggled with issues about grey market and black market and the most important issue of all, how to encourage more Canadians to watch more Canadian programming, stories about Canadians by Canadians and for Canadians. However, the government is more interested in doing what it is being directed to do by the people who were the major donors to the minister's last election.

Our objective is to encourage Canadian programming. Bill C-52 is a big step backward and may in fact be counterproductive. Further, I do not believe that Bill C-52 is even necessary to solve the problems identified by the Coalition Against Satellite Theft to the Liberal caucus.

In Canada at present there are two authorized satellite service companies; Bell ExpressVu and Star Choice. The first of these, Bell ExpressVu, has a serious problem with people stealing its signals. For example, on October 21, 2002, Quebecor president, Pierre-Karl Péladeau, told the CRTC of a fall 2000 Léger marketing survey showing that fully 20% of Bell ExpressVu's 1.2 million subscribers were not paying for the service. He said:

ExpressVu's system is so simple, it possesses an irresistible attraction to hackers and signal pirates.

He went on to say:

ExpressVu should be forced to improve its system to deter hackers and pirates.

The Canadian Association of Broadcasters agreed saying that ExpressVu should regularly report to the CRTC on the number of receivers it had sold and the number of active and inactive accounts.

We know that Bell ExpressVu has a much bigger problem with hackers and pirates than Star Choice, primarily because Star Choice uses Motorola's proprietary video distribution system DigiCipher II just as Canada's digital cable services do. I am unaware of a coalition to stop digital cable theft or major signal problems for Star Choice. Therefore, presumably a fairly significant part of the problem with people stealing Bell ExpressVu signals is within the company's own ability to fix it.

Bell ExpressVu and the Coalition Against Satellite Signal Theft are not just concerned about the people who steal their signals. They are also concerned about people who steal the signals of American satellite service companies like Dish Network and DirecTV.

Therefore, the Liberal government wants to crack on the people who are stealing the signals of Dish Network and DirecTV. Essentially the coalition says that if Canadians are able to get free TV channels by stealing from Dish Network and DirecTV, there is little incentive for people to subscribe to ExpressVu, or Star Choice or digital cable. Of course I agree. However before we agree to spend taxpayer money to solve the problem, we need to ask what the coalition members have done.

For example, this is really instructive. People who watch Dish Network or DirecTV need to know what is on. Many people subscribe to a magazine called Satellite Direct . It is a TV guide published “exclusively for owners of DirecTV system”. It is what one reads if one wants to find out what is on tomorrow night on HBO Showtime or ESPN. Here is the interesting thing. The magazine is published by Vogel Communications which is the same Edmonton based company that publishes Vu Magazine , the official guide for Bell ExpressVu satellite system. If one is looking for people stealing DirecTV or Dish Network signals, we might think that one of the first places to start would be the subscription list of a Canadian magazine that tells black market television watchers what is on next week. However, instead of going after Vogel, Bell ExpressVu contracts with it to publish ExpressVu's own TV guide.

I am going to repeat that because it is so astounding that Bell ExpressVu contracts with Vogel for ExpressVu's TV guide and the same publisher publishes a magazine called Satellite Direct which is the way that the black market viewers can see what is on their black market channels. Therefore, we have a situation where Bell ExpressVu is calling on the taxpayer to solve a problem that is well within the corporation's own grasp, but it does not end there.

The Liberals at the coalition's urging are now planning to block the import of Dish Network and DirecTV systems and seize them at the border. Before we consider such a drastic step, we should ask what steps this government and the coalition will take to ensure that no Canadian dishes are sold in the U.S., which of course is zero.

Not only does Bill C-52 call for tax dollars to be spent fixing problems within the coalition's reach, it also discriminates against many minority groups.

What about the grey market? This is where Canadians use a fictitious U.S. address to subscribe to satellite channels that are not distributed by ExpressVu or Star Choice. Often these are minority cultural and religious programming for which there is not a large domestic market and subscribers are paying far more money for each channel received than either Bell ExpressVu or Star Choice would charge for a similar domestic channel.

In our view the deployment of any existing or new police resources to patrol neighbourhood for satellites rather than criminals is inappropriate and wasteful.

I watched a program last night that talked about the terrible scourge of child pornography and child pornography rings and the fact that the investigators were incapable, simply because of an overload of work, to get to this terrible scourge in our society. Yet the government is actually be thinking of deploying police resources to patrol neighbourhoods to find out what people are watching on their home television. That is disgraceful.

The Liberal government and the Coalition Against Satellite Signal Theft speak in terms of promoting Canadian culture and the potential unravelling of the Canadian broadcasting system. These are serious allegations so we need to look at both of them.

First, let us look at promoting culture. Bell ExpressVu's website prominently features the logos of ABC, Citytv, CBS, Fox, NBC and A&E, but only one of these is Canadian. The mailouts that Bell ExpressVu sends to subscribers highlights U.S. movies like Bringing Down the House, Chicago and Daredevil. The movie network is owned by Astral Media, whose chairman of the board, Andre Bureau, gave $5,000 to the 2000 election campaign of the Minister of Canadian Heritage. The network bills itself as a “Canadian premier pay-tv channel” and has written promotional materials that state that the movie network offers the “Best of HBO and Showtime”.

With all due respect to the government, the Coalition Against Satellite Theft, Bell ExpressVu and Astral Media, I do not consider The Sopranos, Six Feet Under or Curb your Enthusiasm to be very reflective of Canadian culture.

The fact is that the average English speaking Canadian can easily spend an entire evening watching TV without seeing a single minute of Canadian programming.

Quite simply, the past practices of giving Canadian satellite companies and broadcasters special TV channels exclusive rights to broadcast foreign, mostly U.S., programs in Canada in exchange for a promise to produce quality Canadian drama is not working. The two things are not related.

If we were to say to the U.S. that we would let its satellite companies distribute U.S. content in Canada if it distributes Canadian programming in the U.S. and around the world, we would face two problems. There would be huge opposition from Canadian companies that make big profits from distributing U.S. programming in Canada, and we would find out that we are really short on good quality content. That is why the CRTC is looking at supporting Canadian television drama.

In the study that our committee did, it was clearly demonstrated that the volume of Canadian drama has actually increased but that viewership has decreased. It is an issue of quality, not quantity.

Now let us consider the potential unravelling of the Canadian Broadcasting System. When we buy a Star Choice or ExpressVu system we can time-shift. In theory we could watch the same program five times in a single evening. In practice it means we can watch Law and Order at 10 p.m. eastern time on Wednesday night on any one of seven CTV stations. At the same time, viewers in Lloydminister, Prince Albert, Saskatoon, Kitchener and Ottawa cannot find their local CTV station, even though Bell owns CTV.

Local news is a big part of Canadian content and it is being ignored by Canada's satellite companies. In the U.S., the satellite home viewer improvement act of 1999 prevents satellite companies from transmitting a national network signal into a home if that transmission would compete with a local affiliate.

No one needs seven stations carrying Law and Order but all Canadians have a real interest in local news from their community. Local news is part of what defines local communities and keeps them together.

Bill C-52 would focus taxpayer dollars on problems that Bell ExpressVu can solve by itself. It hurts ethnic and religious groups and does not offer an additional minute of Canadian quality drama. Finally, it ignores the erosion of local news.

We in the Canadian Alliance believe that the legal reception of Canadian satellite signal in the U.S. would open up a market 10 times the size of the Canadian market and expose Canadian content if we were to enter into a reciprocal agreement with the U.S. that the legal reception of American satellite signal could be received in Canada legally.

What we would give for the ability of Canadians and Canadian content to have 10 times the exposure is the issue here. What we should be doing is entering into an understanding that there is no conceivable way that this law or any other law will enable the government, the regulators, to stop Canadians from accessing the programs that they want.

We propose that the government negotiate with the U.S. to allow signal reception on both sides of the border. We are aware there are program ownership issues and copyright issues but we are also aware that there is technology that would permit control of reception of signal. We want Canadians to have choice. We want the market to decide. Technology continues to evolve that will not permit the control of signal. Canadians want choice.

The bill is an ill-thought bill. The bill completely ignores technological reality. The bill is unenforceable unless we are prepared to deploy many hundreds of millions of dollars to a police force to go up and down our streets to find out what people are watching in their own homes.

The argument that the government will propose, of course, is that it will stop the equipment from coming in across the border. What happened with cigarettes? When the government increased the taxes and said that it would be creating more of a barrier to cigarettes, although they are very small they come in very large cartons, those cartons continued to come into Canada.

If we are in the business of creating law in Canada, we must create law that is actually enforceable. We must create law that has the support of Canadians, otherwise we simply encourage anarchy.

I say again that what will happen is that technology will overtake the ability to regulate the theft of satellite signal.

The bill, as I stated, is an ill-thought bill. The bill is one that is simply reflective of going after the end user. The bill is simply reflective of where the government wants to go in some kind of a world that really in fact does not exist.

We want there to be a proper control and proper regulation within the marketplace and Bill C-52 does not cut it.

[Serge Marcil, Liberal, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I am very pleased to address the House and begin debate at second reading of Bill C-52.

As we all know, this bill deals with the growing problem of piracy of direct-to-home satellite broadcast signals. Obviously, its purpose is to strengthen the measures employed to fight unauthorized decoding of direct-to-home satellite signals in Canada.

This kind of piracy is a theft of intellectual property and a growing problem in Canada. Illegal dealers make huge profits from the sale of unauthorized products capable of decoding encrypted signals sent by satellite television broadcasters.

These pirated systems function through the use of illegally altered smart cards, that enable unauthorized users to outsmart the conventional signal decoding technology used in satellite television receivers.

The viewers buy these pirated decoders from illegal dealers and then have access at no cost to satellite television.

Such actions are illegal and unethical, and pose numerous risks to the consumer.

They are illegal because they are in direct contravention of section 9 of the Radiocommunication Act, which was passed by Parliament in order to guarantee that Canadian companies can operate in a fair and equitable market without hesitating to take risks with respect to technological and programming innovations.

The broadcasting sector generates several billions of dollars in revenue and employs thousands of Canadians. I have some figures I would like to share with the House. Licensed Canadian broadcasters are described by the generic term of broadcasting distribution undertaking. These undertakings provide Canadians with broadcasting services in various formats, depending on the technology used.

Last year, private broadcasters earned $3.6 billion in revenue, employed more than 12,000 people and invested $1 billion in Canadian programming.

Cable distribution undertakings earned $1.7 billion, employed more than 9,600 people and provided services to 7 million subscribers.

The newcomer to this industry is direct-to-home or direct broadcasting by satellite, a service that has been provided in the United States for over a decade. It was not introduced in Canada until 1997 when Bell ExpressVu and Star Choice began providing their services after receiving CRTC approval.

These companies serve 2.1 million subscribers combined. Although they are not turning a profit yet, they have generated a combined revenue of $940 million. Last year, they invested $46 million in the production of Canadian programs.

To sum up, satellite broadcasters have quickly become fierce competitors for cable service providers. They cornered 20% of the entire Canadian market in 2002, while providing Canadians with a better choice of Canadian programming.

The vitality of the DBS industry is based on innovation. This industry uses new satellite technology such as Nimiq, the powerful DBS satellite developed by Telesat Canada. With this technology, satellite broadcasters are able to provide digital services to previously underserved urban and rural areas.

This is undeniably a good thing for Canada, and businesses in this industry must be able to rely on a fair and equitable market to get a good return on their investment in this type of technology.

However, the profitability of satellite broadcasters and of all broadcasting distributors, for that matter, is threatened when consumers try to have access to programming without paying for it.

When they illegally buy material that allow them to get around the technology and to get the signals free, they undermine the capacity of these businesses to get a good return on their investment.

We want to encourage innovation. We want to promote vitality and creativity in the broadcasting industry in Canada. We must implement market control rules that protect intellectual property. We must make legislation that encourages those who take risks to continue down the road to innovation. We must stop the proliferation of illegal equipment dealers.

The industry estimates that the number of unauthorized users of direct satellite broadcasting services ranges from 500,000 and 700,000 in Canada. Studies reveal that these activities lead to annual losses of $400 million on subscription revenues for this industry in Canada.

The provisions of the Radiocommunication Act clearly define the activities of illegal equipment dealers as being illegal. In fact, a decision by the Supreme Court in April 2002 says that unauthorized decoding of any encrypted subscription programming signal, no matter where it comes from, is considered illegal. But it would appear that the current provisions of the Radiocommunication Act are not enough of a deterrent.

The use of decoders is not only illegal, it is also ethically wrong. It is theft. This trade is in the hands of unscrupulous business people who, by making their services known on the black market, have shamelessly incited people to break the law.

Using illegal decoders to watch television is also a financial risk for consumers, who believe they are getting something for nothing or in exchange for a onetime payment to unscrupulous business people. In the end, however, consumers could be left empty handed.

To protect their interests and discourage satellite signal theft, direct-to-home broadcasters frequently scramble their broadcast signals. Consumers purchasing illegal decoders are at the mercy of unscrupulous corporations, which must continually provide their clients with the most recent encryption keys, allowing the uninterrupted decoding of broadcast signals.

Consequently, Canadians using illegal decoding equipment could face substantial financial losses. Their service may be terminated without notice or possible recourse, because consumer protection laws do not apply to purchases of illegal goods.

Corporations selling illegal decoding equipment are exploiting consumers who may be unaware that the technology they are buying could quickly become useless. The bill before the House today includes measures to protect consumers. However, our target is the unauthorized resellers, who earn millions of dollars from their illegal activities. This kind of crime is on the rise, and it is our intention to put a stop to such activities.

In closing, I want to add that this bill also includes measures on public safety. The use of pirated receiver cards has been found to create signal interference with licensed radiocommunication systems of emergency and police services. We must put an end to the illegal exploitation of radiocommunication signals, as this endangers the legitimate use of wireless first responder services.

Those are the problems we face. How will the bill help us to resolve these problems? It will do so by presenting three measures aimed at discouraging the unauthorized decoding of satellite signals.

First, the bill improves import controls in order to prevent unauthorized radiocommunication material from entering Canada, including illegal satellite broadcasting material. The Canada Customs and Revenue Agency has indicated that the current Radiocommunication Act is difficult to enforce.

Right now, import controls for illegal satellite broadcasting material are ineffective. We want to improve the ability of the Canada Customs and Revenue Agency to seize illegal satellite broadcasting material as soon as it gets to the border.

Second, the bill increases the penalties set out in the Radiocommunication Act so that they will be more of a deterrent for anyone tempted to steal satellite broadcasting signals or to commit certain other crimes.

Satellite piracy is an extremely lucrative business. Dealers advertise their illegal products and services in our newspapers and on the Internet.

There are penalties under sections 9 and 10 of the existing act, but they are not harsh enough to have a deterrent effect on dealers. In fact, paying the fines that are set out in the act can be considered as the price to pay to engage in these lucrative illegal activities.

Therefore, this bill proposes penalties that will send a strong message to industry stakeholders and to the courts to convince them that Parliament sees satellite piracy as a serious offence.

Third, this bill reinforces the existing right to take civil action. The Canadian broadcasting industry tried to curb the growth of pirated satellite services. However, the civil recourses that are available are both expensive and ineffective. In many cases, it is difficult and costly to prove a causal link between the illegal act and the extent of the losses incurred by the industry. With this bill, it will be possible to elect to receive statutory damages instead of having to prove the extent of the damages caused.

Satellite signal piracy causes financial losses to an important cultural industry in Canada, an industry that supports Canadian programming and that employs thousands of Canadians. The government is committed to improving the stability, integrity and general conditions of broadcasting in Canada. We wish to improve the stability of the industry in order to encourage investment and competition.

Current penalties are not tough enough to discourage satellite signal piracy. We shall make the penalties stronger, make it possible to seek statutory damages, and increase our capacity to stop illegal equipment imports.

The purpose behind these measures is not to limit the choices that are available. What we want is to prevent the slow death of broadcasting in Canada. The end result will be better programming and wider choices for Canadians, and fewer opportunities for those who are tempted to make money through illegal activities.

I invite all members of the House of Commons to join me in supporting this bill.

[Denis Coderre, Liberal, for the Minister of Industry]

moved that Bill C-52, an act to amend the Radiocommunication Act, be read a second time and referred to a committee.

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will return to consideration of Bill C-32, the Criminal Code amendments, followed by Bill C-54. If we get through this, we will proceed to consideration of Bills C-19 and C-6, two bills on first nations. If we have time, we will also look at Bill C-51.

If that is a bit too ambitious, the first item for consideration tomorrow will be Bill C-6, the specific claims legislation. After oral question period, we will come back to Bill C-54, which we debated this morning, concerning fiscal arrangements. If there is time, this will be followed by Bill C-46, the market fraud bill, and Bills C-19, on first nations, and S-13, concerning the Statistics Act.

Next week, we will continue to consider bills that have not been completed, beginning on Monday with Bill C-46, on financial institutions. We will add to that list Bill C-23, the sexual offenders legislation.

By mid-week, we hope to be in a position to consider Bill C-52, the radio communications bill, and Bill C-20, the child protection legislation, as mentioned by the Minister of Justice during oral question period.

Broadcasting

[Beth Phinney, Liberal, Hamilton Mountain, ON]

Mr. Speaker, I congratulate the Ministers of Industry and Canadian Heritage for bringing Bill C-52 to the House.

Many of us have been in discussion with the Canadian Association of Broadcasters and are well aware of the financial and cultural damage that illegal satellite dishes and the piracy of intellectual property have caused in our country.

Would the Minister of State and Leader of the Government in the House of Commons assure the House that the legislation will pass expeditiously. Further delay would mean that there would be hundreds of millions of dollars lost in revenue to the provincial and federal governments?

Radiocommunication Act

[Allan Rock, Liberal, Minister of Industry]

moved for leave to introduce Bill C-52, an act to amend the Radiocommunication Act.

(Motions deemed adopted, bill read the first time and printed)