Bill C-32 (40th Parliament, 3rd Session) Committee on March 22nd, 2011

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. McTaggart, you talked about the SOCAN decision, which was one of the major decisions ensuring that ISPs were not held liable because they're not in the position to see what's in the content.

With the use of deep packet inspection techniques, with which the various telecoms have been able to track what is going through the pipes, are you concerned you could be liable down the road for another challenge similar to what SOCAN brought the last time?

[Craig McTaggart]

Well, first, on the point of notice and notice, I want to say that TELUS does forward close to 100% of the notices we receive. It's only in cases where we can't match up an address....

You implied that we were maybe not doing what we need to do, but we are doing it. The constraints—

[Charlie Angus, NDP, Timmins—James Bay, ON]

No, I suggested you didn't have any record of whether you sent it once, twice, or a hundred times. I thought that was problematic.

[Craig McTaggart]

Right. Perhaps you'll understand that the constraints of our privacy obligations to our customers are such that if we don't have a business reason to retain data, then we don't.

Sorry, could you refresh my memory of your second question?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Well, with the SOCAN decision, you were—

[Craig McTaggart]

Right. The quick answer is that we don't use DPI.

[Charlie Angus, NDP, Timmins—James Bay, ON]

You don't.

Madame Dinsmore, are you concerned about deep packet inspection being used? They could say you actually do know what's coming down the pipe, so there would be that issue of third-party liability.

[Pam Dinsmore]

We know what protocol is being used, but we don't actually know the content of what's flowing through our pipe. We can't tell whether the bits and bytes are music; we can't tell if it's video. We know if it's peer to peer, in which case we can manage it on the upload, which we do.

We're like the postman who delivers the envelope, but we don't actually open the envelope to see what the content is.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay.

I want to ask a question about this new process in the U.S. with the U.S. Copyright Group. Have you been following these John Doe lawsuits? They launched 20,000 lawsuits in the month of March, I believe, and there's going to be another 30,000. They send a lawsuit notice to an IP addresses where they know a notice and notice has been sent about downloading a film. They're calling on the ISPs in the United States to participate in these mass John Doe lawsuits.

Have any of your legal departments looked into the potential implications in Canada and how you would proceed? How would you see yourselves responding to a mass lawsuit mailout to IP addresses? Do you look at that from a legal perspective, from a privacy perspective, from a customer perspective, and from dealing with the rights holders perspective?

[Suzanne Morin]

We haven't received any requests like that from content owners.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm saying this is what's being done in the United States. You're not looking over the border to say that could be used here and we'd be having to participate in that?

[Suzanne Morin]

Well, typically when you go to court a plaintiff would reach out to a third party. We're an uninterested third party, so typically a plaintiff would reach out to us in advance of that. We haven't received any requests or any motions to go to court on that.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Have you watched what's happening in the United States—

[Suzanne Morin]

We do watch what happens in the United States.

[Charlie Angus, NDP, Timmins—James Bay, ON]

—with the John Doe lawsuits? Would you see that the regime in Canada would allow for those kinds of mass mailings of lawsuit threats to IP addresses?

[Suzanne Morin]

I don't know.

[The Chair, Conservative, Gord Brown]

All right. We're out of time.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

[The Chair, Conservative, Gord Brown]

Thank you very much, Mr. Angus.

We'll move to Mr. Del Mastro for seven minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much.

And thank you to the witnesses today.

I appreciate that all three of you have indicated your support for the passage of Bill C-32 in a timely manner. I think that's important.

I think all of you provide necessary service to businesses and to households across the country. As such, your voice before this committee is very important. I have a number of questions, which I'll get to.

Ms. Dinsmore, one thing in your presentation was network PVRs specifically. I'm interested in that because the bill is written intentionally to be technology neutral. I support network PVRs. I think it's a great idea, to reduce waste and also to provide consumers more choice. It also opens up opportunities for television networks to get more revenues. As I understand it, they can switch out advertisements and so forth—revenues from advertisers.

Why have you specifically highlighted them? Is there something in the bill that you think may not provide for their use?

[Pam Dinsmore]

Thank you for that question. We are very pleased that the minister has expressed the government's intention to introduce network PVR services and cloud computing. We think that's a great innovation and we're all for it. We also think it's very clear that when a customer makes a copy using a PVR or even an NPVR and stores it, that's covered off in the bill. I guess what we're concerned about is that the government's intention be very clear and understood by all.

We are members, again, of the BCBC. They have actually brought forward proposed draft wording changes that would make some recommended changes to the hosting provision. What that would do is this. It would clarify that when a subscriber to a network PVR or a cloud computing service retrieves its stored content, it doesn't trigger any further copyright liability like communication to the public by telecommunication. So we think that if you adopted the changes that have been proposed by the BCBC, this would make it crystal clear that this is not the intent.

[Dean Del Mastro, Conservative, Peterborough, ON]

Just assuming that for network PVRs or cloud computing...would you support, then, the government's rationale for allowing technical protection measures to be used at the discretion of the rights holder?

[Pam Dinsmore]

On technical protection measures, we totally agree with the prohibition against breaking access copy controls. When it comes to the other types of locks, the other copy controls, we're concerned that when somebody has actually acquired copyrighted works, they be able to use that work to format shift, time shift, make backup copies. So with that, our position is that this should be allowed under the bill.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay, very good. Thank you.

We've heard presentations from certainly the recording industry, the film industry, and the entertainment software industry, all of which have very significant footprints here in Canada. They're very important industries with billions of dollars of revenue. Tens of thousands of jobs have been wiped out. We heard the chamber of commerce speak to that as well. The Canadian Council of Chief Executives spoke to it as well. It's very important, obviously, that we move in this regard and move forward with it.

But we've been bogged down on a couple of debates that I think have held up the committee. Specifically, one would be the proposed digital copying levy, or the iPod tax, as we've coined it. Have your organizations taken a position on that? Specifically, I'm interested since most of the devices that you're now selling, smartphones, for example, and many of the other devices that you would market, would most certainly be hit by such a levy. What might your position be on it?

[Craig McTaggart]

Yes, that is something that at TELUS we have a view on. I'm going to speak to three major problems with extending the private copying levy to devices, and I'll characterize them as double charging, the smartphone problem, and the fact that it sounds like giving up on fighting piracy.

First of all, with respect to double charging, as has been mentioned before this committee before, when a consumer downloads a track from an online music service such as the TELUS music shop or iTunes, the tariff approved by the Copyright Board that governs the consumer's use of that track permits the consumer to make further copies on a device. So the consumer has already paid; the rights holders have already been compensated for that kind of use. If you create an additional fee meant to get at the same use, it sounds inequitable to me.

The second concern I have, and you alluded to this, is with respect to smartphones. It's very difficult to define what would be a digital audio recorder, a digital audio device. What concerns us at TELUS is that a lot of the devices that we sell are multi-function devices and could be caught by that definition. If a per-gigabyte fee is added onto those devices, then suddenly the retail price of the devices we sell, which are not primarily for music or media, although they're used for all sorts of things, suddenly goes up. That has negative consequences in a number of ways.

Third, what concerns me about that kind of approach is that it sounds like throwing in the towel. Implicit in my remarks today is that what TELUS likes about this bill is that it goes after the bad guys. It seeks to stop the source of illegitimate content at its source and those who actively enable it, while at the same time enabling functioning markets for legitimate licensed content. We are in the licensed content business. We want that business to flourish.

That's the two-pronged approach that TELUS sees as particularly powerful in this bill. To adopt an approach that gives up and adopts an arbitrary charge that increases the prices of consumer products is not one that we would recommend.