Information & Ethics Committee on Feb. 13th, 2018

[Rob Malcolmson]

When we're acting as an ISP—we're an integrated company, so we have the media business and the ISP business—we're content agnostic. We deliver the content that rides on our network and provide it to consumers with the highest-quality networks and the best user experience possible. That's wearing our ISP hat.

Similar to Vidéotron, we did look at some of what we thought were innovative content offerings. The best example is Bell mobile TV. We offered an extension of our television service on the wireless network to customers. Because the customers were paying for the content on that service, the data usage associated with the consumption of that content was zero-rated. Ultimately, the CRTC determined that in doing that we were treating one class of customers differently from others by zero-rating that content. We disagreed with that decision.

I go through it because it shows a couple of things. First of all, it shows how robust our net neutrality rules are and how vigilant the CRTC is in enforcing them. I think it also shows, when you're thinking about changes to our net neutrality laws, the need to maintain the flexibility that exists in the existing regime. Just as mobile TV was something new at the time, none of us at this table knows what is coming three or four or five years down the road. When innovative applications come up that will benefit the consumers that you worry about, I think service providers should be given an opportunity to try them out. Ultimately, if the regulator feels they're in any way discriminatory, they have the existing tools and they've used the existing tools, both with Vidéotron and with us, to tell us when we've crossed that line.

[The Chair, Conservative, Bob Zimmer]

Thank you, Madam Fortier.

We do have some time, so we have Mr. Masse next. There are about 30 minutes left in terms of time for questions. If you want to get put back on the list, please let me know.

Go ahead, Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you again to our witnesses.

I want to follow up with FairPlay, Mr. Malcolmson. With regard to the broad coalition that came forth with the proposal to CRTC, I guess if you don't get what you want with that, what's the next best option, in your opinion, in terms of being fair from the perspective of the creators?

I have a lot of concern over some of the things that have taken place with regard to piracy, but often it's also been.... A good example is in my area, where a satellite from the United States was accessed. It was from poor practices from the companies in not doing any type of research or whatever, and it turned into a policing problem for the Canadian side versus a weak system on the U.S. side.

What would be your next step in terms of a FairPlay option that would be good for a balance?

[Rob Malcolmson]

Well, we hope we don't get to the next step that you've asked me about. We think that the FairPlay proposal, given the existing range of remedies that are available, is an important addition, because it's practical, it's effective, and it lets us reach beyond our borders to find and block incoming pirate streams. That's why we've proposed it. We think it's effective.

In terms of what the future may hold if we're unsuccessful, I suppose, as we go through the reform of the Copyright Act, there may be more statutory remedies that could help the cause, but at the end of the day, unless you can block these pirate sites at their source, it's going to be a very, very uphill battle to be able to combat this problem.

Just to give you a snapshot of the extent of the problem, I don't know if you're familiar with them, but there are streaming services called Kodi set-top boxes. You can buy one of those from your local electronics retailer. I think they retail for somewhere in the $50 to $100 range. When you buy one of those, you instantly get access, through a bunch of add-ons of pirate applications, to streams of content owned by the people around this table. I think the latest statistics from Sandvine were that 7% of Canadian television households are now using these Kodi boxes.

It is a pervasive problem, and the content has to be stopped at the entry point. As ISPs, we're all well positioned to do so when ordered, after there's been a finding—not by us, but by the CRTC—that a site is a legitimate pirate site. ISPs are able to engage in that blocking.

[Brian Masse, NDP, Windsor West, ON]

I think the challenge is that another system always comes in place. In fact, we don't raise these in our trade missions abroad. They're very rarely part of trade agreements when we discuss these things. Most of the stuff—not all of it, but a great deal—comes from from China. We do have other.... I mean, this is part of a larger debate. I deal in the automotive sector, and we have copyrighted parts.

Copied materials are going into hospitals, counterfeits that say “Canadian Standards Association” on them and so forth. It happens to be predominantly in the entertainment industry that Canadian consumers are choosing to go this direction, but it's in our dollar stores and so forth.

I do want to move to one quick—

[The Chair, Conservative, Bob Zimmer]

Thank you, Mr. Masse. Your time is up, but if you want to come back around....

[Brian Masse, NDP, Windsor West, ON]

I would. I have one quick question for the rest of the panel.

[The Chair, Conservative, Bob Zimmer]

We have Mr. Erskine-Smith, Madam Fortier, and Mr. Masse. That's all I have on my list so far.

Please go ahead, Mr. Erskine-Smith.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

I want to pick up again on Mr. Masse's conversation.

I understand, Ms. Dinsmore, that it's easy to go after sites where people are downloading, but it's more difficult to tackle streaming. It's not entirely clear to me how setting up a new body makes it easier to tackle these streaming sites. Perhaps you can explain why you're currently unable to identify a streaming site where there's illegal content available for streaming and you can't go to court or to the CRTC to have that shut down.

[Pam Dinsmore]

Just to help you understand the notice and notice system that was enshrined in our Copyright Modernization Act five years ago, it is a practice that ISPs were engaged in voluntarily for about 10 years before that. It's a solution that's not as drastic, one might say, as the notice and take down regime in the U.S. under their Digital Millennium Copyright Act.

Basically what happens is that a rights holder will send to the ISP a URL for which we then act as a post office, to match it to tombstone information—i.e., a customer's email address—and we act simply to pass that note on to the end-user, which tells the end-user that the rights holder is aware that the end-user is downloading their content illegally. That's effectively what happens. This is all done automatically. The match is done automatically. We don't even see these notices. They just pass right through our system. That's the notice and notice system. It informs the end-user that the rights holder is aware that the end-user is downloading their content and is infringing their copyright.

That cannot work in a streaming context because the software isn't there to make that detection, so it's ineffective.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Quite separate from going after the end-user, what precludes you from going after the hosting of that site?

[Pam Dinsmore]

First of all, we're not going after the end-user.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Well, you're blocking the website.

[Pam Dinsmore]

In the notice and notice context, the rights holder is informing the end-user that the end-user may or may not know that what they are viewing online is that rights holder's copyrighted content. That's what's going on in the notice and notice regime.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Right.

[Pam Dinsmore]

If you ask whether we extend that to streaming, whereby the rights holder could inform the end-user—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

No, I don't think that's the question. You have a proposal to allow this independent body to take down websites. Where there's illegal activity, you can make an application to court for a court order to take that website down. The question is, why is that insufficient?

[Rob Malcolmson]

Could I take a stab at that?

I think it's important to point out that under the Telecommunications Act there's a specific provision in section 36 whereby Parliament has empowered the CRTC, as the expert telecommunications regulator, to make determination to authorize ISPs to interfere or block traffic.

To your question as to why we aren't going to court or why judicial remedies aren't sufficient, even if there were a perfect tool kit of legal remedies, at the end of the day, anyone seeking to block access to illegal content would also have to go through the CRTC.

One of the considerations in the FairPlay application is that we have an independent regulator. That independent regulator recently, in the Quebec anti-gambling law case, declared that if there is going to be any blocking of Internet content, all roads go through the CRTC, and the CRTC has to authorize it.

When the coalition formed the FairPlay proposal, there was recognition that the CRTC is in the middle of this and has to authorize it, in addition to any judicial remedies that may otherwise exist.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

The CRTC is currently empowered by section 36, as you say, to allow or give permission. It's accepted that the CRTC can give you permission to block sites. Has there been an instance in which you've done the due diligence, you've proven with documentation that a certain site has made illegal material available, you've taken it to the CRTC, and they've taken no action?

[Rob Malcolmson]

That's what this proposal is all about. Rather than going to the CRTC on a one-off basis, we thought a holistic proposal from a broad-based group of stakeholders would give the CRTC the best opportunity to have a look at the implications and consider it a broad basis. That's exactly what it's about; we haven't gone on a one-off basis.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

It's a proposal, then, to set up an independent agency under the auspices of the CRTC. You're not attempting to bring material to the CRTC to say this is infringing and to ask the CRTC to take action in the first instance at all. Instead you're developing this alternative proposal, separate and apart.

[Rob Malcolmson]

As I said, I think the coalition's view is that this type of broad proposal makes the most sense. You create an independent agency that has some expertise.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Okay.

I have one question that is completely unrelated.

We were talking about spectrum. I'm a TekSavvy customer. I've never downloaded the The Hurt Locker. If TekSavvy is a reseller of the Rogers network, why would the same thing not work from a competition and consumer perspective for mobile networks?

[Pam Dinsmore]

Could you clarify the question?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Yes. It's on the idea of reselling. We have more competition in the space for Internet service providers, TekSavvy being mine, because they're able to access network and resell Rogers network. Why would the same thing, from a consumer competition perspective, not work for mobile networks?