Mr. Chair, vice-chairs, committee members, clerk, and committee staff, thank you for the opportunity to appear before you today as part of the statutory review of the Copyright Act.
My name is Frank Schiller. I am here as a Canadian adviser to Border Broadcasters, Inc., the not-for-profit copyright collective that represents 26 over-the-air American television stations, including ABC, CBS, NBC, and Fox affiliates.
Local and distant digital broadcast signals and programming from these TV stations are appropriated and imported into Canada, packaged in channel bundles, and then sold to pay TV subscribers in all markets across Canada. Cross-border television broadcasting reflects our common values, our shared communities of interest, and programming diversity. From modern digital broadcasting infrastructure to local news, weather, sports, and entertainment programming, as well as emergency alerts, local TV brings us together.
Since the dawn of television, local U.S. border stations have had a distinguished legacy of strengthening and deepening the relationship between Canada and the United States. Canada has been importing U.S. television signals and programming for over 40 years. This has been happening without notice, consultation, consent, or compensation for the U.S. station owners in the Canadian listing and licensing process.
I am seeking your committee’s support on two fronts today: first, your support for fair treatment and full compensation for U.S. border stations in Canadian local and distant signal retransmission practices, including under copyright; and second, your support to modernize the cross-border retransmission right provisions under the existing Canada-U.S. trade agreements, including the North American Free Trade Agreement and/or the Canada-U.S. free trade agreement.
Your committee's review of copyright is timely. The related issues go back to the retransmission rights provisions first set out in article 2006 of the Canada-U.S. FTA. At the time, there was no compensation consistent with the 1976 U.S. Copyright Act for American stations subject to cable retransmission in Canada. The intent was to bring equitable and non-discriminatory retransmission remuneration to accommodate U.S. border stations and program owners. Since then, there have been significant technological changes, including the switch from analog to digital television broadcasting, as well as important regulatory developments, including a retransmission consent regime that was adopted by the U.S. Congress in 1992. This was followed in 2008 by the end of the advertising-only business model for local TV broadcasting.
Canadian laws and regulations encourage Canadian TV services to take and appropriate without consultation, consent, or compensation the signals and programming of U.S. border stations. After 30 years of administration, U.S. TV stations are still waiting for equitable and non-discriminatory treatment in Canada. Canada does not require reporting, auditing, or notification provisions when Canadian distributors are licensed to package and sell listed American digital signals and programming to Canadian TV subscribers. As a result, U.S. stations cannot reasonably determine where and when their digital broadcast signals and programming are being sold to Canadian TV subscribers.
Canada accepts inaccurate data for Canadian viewership of retransmitted American TV services. This causes economic injury to U.S. station owners. For example, in 2010, TV viewing measures changed in Canada, with under-representation of U.S. border stations. At the same time, Canada changed its distant signal distribution regulations linking the distribution of distant U.S. signals to all Canadian distant signals. The immediate impact of these changes was a significant under-reporting of Canadian viewership of U.S. TV stations. Consequently, copyright allocations to U.S. border stations were retroactively reduced by over 64%. At the time, this resulted in an unfair liability of $7.4 million against Border Broadcasters, Inc.
Moving forward, remission of the copyright liabilities for border broadcasters is essential for fair trade. It's notable that local U.S. TV border stations receive no copyright remuneration for local retransmissions. This needs to be corrected moving forward.
Canada also permitted the retransmission of sets of digital HD signals from U.S. stations beginning in 2000. However, Canada did not begin to update the definitions of local digital signals and distant digitals for copyright remuneration purposes until 2013. The Canadian copyright system is not providing for equitable and non-discriminatory treatment of U.S. stations.
Modernizing our trade arrangements now will result in win-win outcomes, including for Canadian viewers, and an ongoing cross-border legacy that will continue to strengthen Canada and U.S. relations.
New commercial revenues from consent rights in Canada’s listing and licensing processes, in addition to equitable and non-discriminatory remuneration opportunities, will benefit local Canadian television.
Canada should support the retransmission consent annex to the cross-border services chapter as proposed in NAFTA 2.0 negotiations currently. This will rebalance and correct the unfair existing practices while supporting a vibrant and sustainable domestic market into the future. Television broadcasting is part of the digital envelope. The U.S. experience confirms that local stations are profitable and they reinvest retransmission consent revenues in local digital broadcasting infrastructure as well as expanded local news offerings.
Recent U.S. studies highlight that in most small and medium-sized markets, local TV stations are the primary source for local news online. With the digital transition complete, U.S. stations are getting set for the introduction of the new ATSC 3.0 television broadcast standards. This includes next-generation digital video delivery services to both mobile and fixed receivers, seamlessly combining over-the-air and broadband delivery. Next-generation TV test markets even include autonomous vehicle researchers and manufacturers.
By co-operatively working together now as old and close neighbours, allies, and free trade partners, we can improve copyright and consent remuneration opportunities. This will benefit local viewers, communities, TV services, and broadcasters on both sides of the border. This can all be accomplished within Canada’s existing cultural exemption.
Thank you.