Evidence of meeting #128 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was copyright.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Andy Kaplan-Myrth  Vice-President, Regulatory and Carrier Affairs, TekSavvy Solutions Inc.
Robert Malcolmson  Senior Vice-President, Regulatory Affairs, BCE Inc.
David Watt  Senior Vice-President, Regulatory, Rogers Communications Inc.
Cynthia Rathwell  Vice-President, Legislative and Policy Strategy, Shaw Communications Inc.
David de Burgh Graham  Laurentides—Labelle, Lib.
Mark Graham  Senior Legal Counsel, BCE Inc.
Dan Albas  Central Okanagan—Similkameen—Nicola, CPC
Kristina Milbourn  Director, Copyright and Broadband, Rogers Communications Inc.
Michael Chong  Wellington—Halton Hills, CPC
Jay Kerr-Wilson  Legal Counsel, Fasken Martineau, Shaw Communications Inc.

3:30 p.m.

Liberal

The Chair Liberal Dan Ruimy

Good afternoon, everybody. Welcome to another exciting meeting of the INDU committee while we continue our legislative review of the Copyright Act.

Today we have with us, from Teksavvy Solutions, Andy Kaplan-Myrth, vice-president, regulatory and carrier affairs; from BCE, Robert Malcolmson, senior vice-president, regulatory affairs, and Mark Graham, senior legal counsel; from Rogers Communications, David Watt, senior vice-president, regulatory, and Kristina Milbourn, director of copyright and broadband; and finally, from Shaw Communications, Cynthia Rathwell, vice-president, legislative and policy strategy, along with—he's not on our list—Jay Kerr-Wilson, legal counsel, Fasken.

Welcome.

Thank you, everybody, for coming today. Each group will have up to seven minutes to make their presentation and then we will get into our rounds of questioning.

We're going to get started right away with Teksavvy Solutions.

Mr. Kaplan-Myrth, you have up to seven minutes. Go ahead, please.

3:30 p.m.

Andy Kaplan-Myrth Vice-President, Regulatory and Carrier Affairs, TekSavvy Solutions Inc.

Good afternoon, Mr. Chair and committee members.

My name is Andy Kaplan-Myrth. I am VP, regulatory and carrier affairs at TekSavvy. I'd like to thank you for the opportunity to share our perspective and experience with the Copyright Act.

TekSavvy is an independent Canadian Internet and phone services provider based in southwestern Ontario and Gatineau. We've been serving customers for 20 years, and we now provide service to over 300,000 customers in every province. Over the years, we've consistently defended network neutrality and protected our customers' privacy rights, in the context of copyright and in other contexts.

TekSavvy is different from the other witnesses here today in two important ways, for the purposes of this review. First, while we take copyright infringement very seriously, we do not own media content that's broadcasted or distributed. We're appearing here as an Internet service provider and not as a content provider or rights holder.

Second, to provide services to most of our end-users, we build out our networks to a certain extent and then we use wholesale services that we buy from carriers to cover the last mile, to reach homes and businesses. Because of that wholesale services layer, things sometimes work very differently for us compared to for the incumbent ISPs.

I'm going to focus my comments today on two areas: First, notice and notice and our concerns with the way it currently works; and second, our opposition to proposals to block websites to enforce copyright.

I'll turn first to the notice and notice regime. When notice and notice first came into effect, TekSavvy expended significant resources to develop systems to receive and process notices. Maintaining those systems and hiring staff to process notices continues to be a challenge for a small ISP like TekSavvy. I'll get to our concerns, but I want to start by noting that, in principle at least, notice and notice is a reasonable policy approach to copyright infringement that balances the interests of both rights holders and end-users. At the same time, now that it's been in place for nearly four years, we can see that notice and notice needs some adjustments. We would recommend three tweaks to the current notice and notice regime.

First, a standard is needed to allow ISPs to process notices automatically in a way that's consistent with Canadian law. On average, we receive thousands of infringement notices per week. They come from dozens of companies and use scores of different templates, fewer than half of which can be processed automatically. In effect, notice forwarding is an expensive and difficult service that we provide to rights holders at no cost and for which we're expected to provide a 100% service level. That's not sustainable.

Infringement notices are emails that generally have a block of plain text followed by a block of code. Some senders use notices with a block of code that follows a Canadian standard, which contains all of the elements of the Copyright Act that allow us to forward those notices. If they have the code that follows the Canadian standard, those notices can be processed automatically, without the need for a human to actually open them and review the content.

However, many notices use code adapted from American copyright notices that don't include everything we require in the Canadian Copyright Act. Others are in plain text only; they have no code. When that happens, a human needs to actually read the text of the notice to confirm that it has the required content before it can be forwarded. Both of those notices have to be processed manually. That's work-intensive and slow—and realistically, it is not sustainable as volumes increase. If rights holders were required to use a Canadian notice standard, ISPs would be able to automatically process their notices and better handle a high volume of notices.

Second, a fee that ISPs could charge to process notices should be established. Currently there's essentially no cost for rights holders to send infringement notices. As long as they can send notices at no cost, then even if they get settlements from only a small number of end-users, there will be a business model for rights holders to send greater and greater volumes of notices. Rather, ISPs bear the cost for processing those notices and then answering the many customer questions they generate. Even a small fee would help to transfer the cost back to rights holders from ISPs and constrain the volume of notices. We already get thousands of notices per week. I expect larger ISPs get far more.

I'm not necessarily suggesting we need to reduce those numbers, but we need to create some economic pressure to prevent them from ballooning indefinitely. The Copyright Act already contemplates that a fee could be established, and we recommend that a fee be established to protect ISPs and end-users from being flooded with unlimited numbers of notices.

Third, infringement notices should not be able to contain extraneous content. Many infringement notices contain content that is intimidating to end-users or that can violate customer privacy. In some cases, they don't reference Canadian law at all.

Some notices include content that's more familiar from scams and spam: advertising for other services, settlement offers, or personalized links that secretly reveal information about the end-user to the sender. This puts ISPs in a difficult position, since we're required to forward notices to end-users, including whatever extraneous, misleading or harmful content may be included. This does not serve the purposes of the notice and notice regime, and we recommend that the content or form of notices be prescribed so they can contain only the elements they are required to contain.

Finally, turning briefly to site blocking, earlier this year a group of media companies proposed a new site-blocking regime to the CRTC aimed at policing copyright infringement. TekSavvy opposed that proposal at the CRTC, and we would oppose any similar proposal here. Simply put, such site blocking would be a violation of common carriage and network neutrality without being especially effective, all without any real urgent justification. TekSavvy strongly encourages you to oppose any such site-blocking proposals.

Thank you. I will be pleased to answer any questions.

3:35 p.m.

Liberal

The Chair Liberal Dan Ruimy

Excellent. Thank you very much.

We're going to move to BCE.

Mr. Malcolmson, you have up to seven minutes.

3:35 p.m.

Robert Malcolmson Senior Vice-President, Regulatory Affairs, BCE Inc.

Thank you, Mr. Chairman and honourable committee members.

My name is Robert Malcolmson, senior vice-president of regulatory affairs at BCE. With me today is my colleague Mark Graham, senior counsel, legal and regulatory at BCE. We appreciate your invitation to provide Bell's views on how to maximize the benefits to Canadians and our economy through the review of the Copyright Act.

Bell is Canada's largest communications company, employing 51,000 Canadians and investing $4 billion per year in advanced networks and media content. These investments allow us to provide advanced communications services that form the backbone of Canada's digital economy. We are also a key supporter of Canada's cultural and democratic system, investing approximately $900 million per year in Canadian content and operating the largest networks of both TV and local radio stations in the country.

I think we bring a unique and balanced perspective to the issues you are considering. As a content creator and major economic partner with Canada's creative community, we understand the importance of copyright and effective remedies to combat piracy. As an Internet intermediary, we also understand the need for balanced rules that do not unduly impede legitimate innovation. I look forward to sharing this perspective with you today.

I'll begin with piracy. There is an emerging consensus among creators, copyright owners, legitimate commercial users and intermediaries that large-scale and often commercially motivated piracy operations are a growing problem in Canada. Piracy sites now regularly reach up to 15.3% of Canadian households through widely available and easy-to-use illegal set-top boxes. This is up from effectively zero five years ago.

In addition, last year there were 2.5 billion visits to piracy sites to access stolen TV content. One in every three Canadians obtained music illegally in 2016. Each of these measures has grown significantly over time. According to recent research conducted for ISED and Canadian Heritage, 26% of Canadians self-report as accessing pirated content online. TV piracy in Canada has an estimated economic impact in the range of $500 million to $650 million annually.

In the light of these concerning trends, we believe the most urgent task facing the committee in this review is to modernize the act and related enforcement measures to meet the challenges posed by global Internet piracy without unduly burdening legal businesses. To be clear, this does not mean targeting individual Canadians who are accessing infringing material. Rather, it means addressing the operators of commercial-scale copyright-infringing services. It is these large infringing operations that harm the cultural industries that employ more than 600,000 Canadians, account for approximately 3% of our GDP, and tell the uniquely Canadian stories that contribute to our shared cultural identity.

With this in mind we have four recommendations.

First, we recommend modernizing the existing the criminal provisions in the act. Criminal penalties for organized copyright crime are an effective deterrent that do not impact individual users or interfere with legitimate innovation.

Section 42 of the Copyright Act already contains criminal provisions for content theft undertaken for commercial purposes, but they have grown outdated. They deal with illegal copying, while modern formats of content theft rely on streaming. These provisions should be made technologically neutral so that they apply equally to all forms of commercial-scale content theft.

Second, we recommend increasing public enforcement of copyright. In jurisdictions such as the U.K. and the United States, law enforcement and other public officials are actively involved in enforcement actions against the worst offenders. The committee should recommend that the government create and consider enshrining in the act an administrative enforcement office and that it direct the RCMP to prioritize digital piracy investigations.

Third, we recommend maintaining the existing exemptions from liability related to the provision of networks and services in the digital economy. These exemptions protect service innovation without diluting the value of copyright.

Fourth and finally, we recommend considering a new provision that specifically empowers courts to order intermediaries to contribute to remedying infringements. This would apply to intermediaries such as ISPs, web hosts, domain name registrars, search engines, payments processors, and advertising networks. In practice this would mean that a new section of the Copyright Act would allow a court to issue an order directly to, for example, a web host to take down an egregious piracy site, a search engine to delist it, a payment processor to stop collecting money for it, or a registrar to revoke its domain.

While financial liability for these intermediaries is not appropriate, they can and should be expected to take these reasonable steps to contribute to protecting the value of copyright, which is essential to a modern digital and creative economy.

Thank you for the opportunity to present our views. We look forward to your questions.

3:40 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you very much.

We're going to move to Rogers Communications.

Mr. Watt, you have up to seven minutes.

September 26th, 2018 / 3:40 p.m.

David Watt Senior Vice-President, Regulatory, Rogers Communications Inc.

Thank you, Mr. Chairman and members of the committee.

My name is David Watt and I am senior vice-president, regulatory, at Rogers Communications. I am here with Kristina Milbourn, director of copyright and broadband at Rogers. We appreciate the opportunity to share our views with you today.

Rogers is a diversified Canadian communications and media company offering wireless, high-speed Internet, cable television, and radio and television broadcasting. We support a copyright act that takes a balanced approach to the interests of rights holders, users and intermediaries, thereby optimizing the growth of digital services and investments in both innovation and content. As a member of both the Canadian Association of Broadcasters and the Business Coalition for Balanced Copyright, we support their comments in this review.

When we appeared before this committee five years ago, we defended the notice and notice regime as a useful deterrent to copyright infringement occurring through the downloading of movies using BitTorrent protocols. Since then, Canadians have fundamentally changed the way they obtain and view stolen content. A November 2017 survey commissioned by ISED and Canadian Heritage found that Canadians are increasingly using streaming to view stolen content online. Sandvine, a Canadian company that conducts network analytics, reported that in 2017 roughly 15% of Canadian households were streaming stolen content using preloaded set-top boxes. These boxes access an IP address that provides the stream. While illegal downloading remains a major problem for rights holders, illegal streaming has become the primary vehicle by which thieves make the stolen content available. We need new tools in the act to combat this new threat to the rights holders and to our Canadian broadcasting system.

We have watched the rise of streaming stolen content with deepening concern. We have taken action using the existing remedies under the act, but these remedies are insufficient. We need new tools in the act to combat this new streaming threat. We recommend two amendments to the act that will make a difference.

First, the act should make it a criminal violation for a commercial operation to profit from the theft and making available of exclusive and copyrighted content on streaming services. In our experience, the existing civil prohibitions are not strong enough to deter this type of content theft.

Second, the act should allow for injunctive relief against all of the intermediaries that form part of the online infrastructure distributing stolen content. An example is a blocking order against an ISP requiring an ISP to disable access to stolen content available on preloaded set-top boxes.

This would be similar to action taken in over 40 countries, including jurisdictions such as the U.K. and Australia. The FairPlay coalition, of which Rogers is a participant, asked for this in its application to the CRTC filed earlier this year. This injunctive relief would serve to support and supplement that application.

In addition to these amendments addressing illegal streaming, we also have recommendations for improving the notice and notice regime. These proposals would protect Canadians against settlement demands and copyright trolling.

First, we fully support the government's position that future copyright notices must exclude settlement demands. We recommend that notice and notice provisions be amended to prohibit rights holders from making settlement demands in notices. We also recommend that the government prescribe, by regulation, the form and content of legitimate notices that an ISP would have to process under the act. A prescribed web form would prevent improper information from being entered into the notice.

Second, this is with reference to the case recently determined by the Supreme Court of Canada regarding reasonable costs of an order to disclose information, or a Norwich order. This order is the subsequent step after a notice and notice form has been sent out for those people who wish to pursue further action. The minister should set a rate per lookup and attach it as a schedule to regulations made under the act. Based on Rogers' costs, a rate of $100 per IP address would be appropriate. This approach would provide transparency to all those involved in Norwich order requests.

These are our brief comments, and we'd be pleased to answer any questions you may have.

3:45 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you very much.

Finally, we're going to go to Shaw Communications.

Ms. Rathwell.

3:45 p.m.

Cynthia Rathwell Vice-President, Legislative and Policy Strategy, Shaw Communications Inc.

Thank you.

Good afternoon Mr. Chairman and committee members.

My name is Cynthia Rathwell, vice-president, legislative and policy strategy at Shaw Communications. With me today is Jay Kerr-Wilson, a partner at Fasken, whose expertise is copyright law. We appreciate the opportunity to present Shaw's view on this review of the Copyright Act.

Shaw is a leading Canadian connectivity company that provides seven million Canadians with services that include cable and satellite television, high-speed Internet, home phone services and, through Freedom Mobile, wireless voice and data services.

Shaw expected to invest over $1.3 billion in fiscal 2018 to build powerful converged networks and bring leading-edge telecommunications and broadcasting distribution services to Canadians. Annually, as a content distributor, we pay tens of millions of dollars in royalties pursuant to Copyright Board-approved tariffs, over $95 million in regulated Canadian programming contributions, and approximately $800 million in programming affiliation payments, $675 million of which is paid to Canadian programming services with predominantly Canadian content.

Accordingly, Shaw understands and wishes to emphasize the importance of a copyright regime that balances the rights and interests of each component of the copyright ecosystem. This balance is central to Canada's interest in maintaining a vibrant digital economy.

Overall, our Copyright Act already strikes an effective balance, subject to a few provisions that would benefit from targeted amendments. Extensive changes are neither necessary nor in the public interest. They would upset Canada's carefully balanced regime, and jeopardize policy objectives of other acts of Parliament that coexist with copyright as part of a broader framework that includes the Broadcasting Act and the Telecommunications Act.

Proposals to increase the scope, and/or duration of existing rights, introduce new entitlements, or to narrow the scope of existing exceptions would increase the cost of digital products and services for Canadians; undermine investment, innovation and network efficiency; and impact Canadians' participation in the digital economy. Stakeholders who argue for new entitlements or limitations appear to seek a simplified response to global market developments that are impacting the production, distribution, consumption and valuation not only of copyrighted works but also of goods and services provided by many, if not most, industries. The responses of most businesses, including Shaw, to market disruptions have been to invest and innovate, diversify, and improve the quality of service and customer experience in order to compete. Fundamental changes in the digital marketplace cannot simply be offset by new legislative entitlements or protections.

Calls for new rights appear, in part, to be based on the suggestion that copyright is a tool for the promotion of cultural content. The Copyright Act is concerned with promoting efficient markets and supporting the creation of works but generally without regard to a creator's nationality or where the work was created. As a result, attempts to use copyright as a cultural policy instrument would undermine the achievement of domestic cultural policy objectives established by other statutes. A clear example of this is the Border Broadcasters, Inc.'s proposal for retransmission consent rights for broadcasters, which, it argues, would support the production of local programming. Shaw is strongly opposed to that proposal.

If adopted, it would disrupt carefully calibrated Canadian copyright and broadcasting policy. It would require Canadians to pay billions of dollars per year in new fees for the same services, a large part of which would flow to the U.S., while creating the potential for loss of access to programming, as well as service disruptions. These impacts would undermine the competitiveness of Canada's broadcasting industry, incenting subscribers to turn away from the Canadian broadcasting system, ultimately at the expense of the Broadcasting Act's objectives.

Canada's Copyright Act provides that services related to the operation of the Internet are exempt from copyright liability solely in connection with providing network services. It also provides that those furnishing digital storage space are exempt from liability in connection with hosted content.

As an Internet service provider, Shaw strongly submits that these exceptions should be maintained. ISPs benefiting from the network services exception are subject to obligations under the notice and notice regime, and protection is denied where a network is found to be enabling infringement. Furthermore, the hosting exception is not available with respect to materials that the host knows infringe copyright. That being the case, Canadian law strikes the correct balance between incenting investment in network services and ensuring that these services support the integrity of copyright.

Some stakeholders have also called for the narrowing or removal of existing exceptions, such as the technological processes exception, that enable end-users and service providers to employ innovative and efficient technologies to facilitate the authorized use of works. Shaw strongly believes that these exceptions represent a balanced approach that maximizes Canada's participation in the digital economy.

While Shaw believes that the Copyright Act overall is well balanced, minor changes should be made to the notice and notice framework to curtail abuses, such as regulations mandating that notices be transmitted to ISPs electronically and in a prescribed form. This has already been discussed in detail today.

As well, Shaw submits that new measures are needed to enable creators to enforce rights against commercial-level online piracy. This will help ensure that rights holders receive fair remuneration and that networks are protected from malicious malware frequently associated with piracy sites. We therefore support an amendment to the Copyright Act's civil remedies to clarify the Federal Court's authority to order ISPs to block access to websites found to be infringing.

In conclusion, Canada's Copyright Act achieves an appropriate and thoughtful balance between creator, user, and intermediary interests, subject to the minor amendments that we've recommended. The extensive changes requested by various stakeholders would disrupt the achievement of policy objectives pursuant to the overall legislative framework governing copyright, broadcasting and telecommunications.

Thanks very much. We look forward to your questions.

3:50 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you very much.

We're going to move right into our line of questioning.

We will be starting with you, Mr. Graham. You have seven minutes.

3:50 p.m.

David de Burgh Graham Laurentides—Labelle, Lib.

I'll take them all. Thank you.

First off, Mr. Kaplan-Myrth, I'd like to ask if you could send us some of these notices you have received in the different formats so we can just get a taste of what kind of stuff comes in to you. It's a simple request. You can send those to the clerk in the future.

3:50 p.m.

Vice-President, Regulatory and Carrier Affairs, TekSavvy Solutions Inc.

Andy Kaplan-Myrth

I'd be happy to send some version of them.

3:50 p.m.

Laurentides—Labelle, Lib.

3:50 p.m.

Vice-President, Regulatory and Carrier Affairs, TekSavvy Solutions Inc.

Andy Kaplan-Myrth

Of course, they contain the personal information of end-users. We would sort of clean out the content, if that would be okay with you, and show you the variety of different notices that we get.

3:50 p.m.

Laurentides—Labelle, Lib.

David de Burgh Graham

I'd appreciate that.

For Bell and for Rogers, I'm just going to confirm for the record that you are members of FairPlay Canada. You support FairPlay Canada?

3:50 p.m.

Senior Vice-President, Regulatory Affairs, BCE Inc.

Robert Malcolmson

Yes, for Bell.

3:50 p.m.

Senior Vice-President, Regulatory, Rogers Communications Inc.

David Watt

Yes, for Rogers.

3:50 p.m.

Laurentides—Labelle, Lib.

David de Burgh Graham

Could either of you explain to me why the website is registered in Panama and hosted in the U.S.?

3:50 p.m.

Senior Vice-President, Regulatory Affairs, BCE Inc.

Robert Malcolmson

The FairPlay website...?

3:50 p.m.

Laurentides—Labelle, Lib.

David de Burgh Graham

Yes. It just seems like an odd thing for a Canadian lobbying group to be registered in Panama and hosted in the U.S. I just want to put that on the record.

In FairPlay's submissions to the CRTC, they stated that existing law can be used to order a site blocking. If that's the case, why is there a request for law reform?

3:50 p.m.

Senior Vice-President, Regulatory Affairs, BCE Inc.

Robert Malcolmson

There are existing legal remedies to combat piracy through potentially getting a blocking order from a court. We've found through experience that those are ineffective.

Some of the reasons why they're ineffective are, generally speaking, that piracy operators operate anonymously, operate online and operate outside of Canadian jurisdiction. Those factors combined make it very difficult to use traditional remedies to enforce a court order against a defendant that is essentially either unknown or not findable. That's number one.

Number two, under the Telecommunications Act, as you probably know, there's a specific provision—section 36—which states that in order for an Internet service provider, an ISP, to have a role in the dissemination of content that it carries, it needs authorization from the CRTC. In a world where Internet service providers are blocking egregious piracy sites, you need the permission of the CRTC.

From the FairPlay coalition's standpoint, we went to the CRTC with that application under a specific provision of the statute. We're all saying that there are ways to perhaps improve the judicial process under the Copyright Act to effect a similar result so that piracy can be combatted on both fronts.

3:55 p.m.

Laurentides—Labelle, Lib.

David de Burgh Graham

Have Bell or Rogers attempted to get any of these orders to block sites?

3:55 p.m.

Senior Vice-President, Regulatory Affairs, BCE Inc.

Robert Malcolmson

We have certainly been to court trying to get injunctions against those who sell the set-top boxes that disseminate this content. My colleague may want to speak to how long and torturous that process is.

Even when you can actually find a defendant in Canada and get proof that the person is engaging in illegal conduct, it has taken us, I think, two years to shut down one particular defendant in Montreal. Imagine how difficult it is to tackle an offshore defendant.

3:55 p.m.

Laurentides—Labelle, Lib.

David de Burgh Graham

Mr. Watt, do you have something to say?

3:55 p.m.

Senior Vice-President, Regulatory, Rogers Communications Inc.

David Watt

I was going to say that exactly that situation has received a fair amount of press coverage. There have been various appeals and legal wranglings. It is shut down currently. However, we're still looking probably out a year before we actually go to trial in that particular case.

The current situation is simply too slow and too cumbersome. You have to effectively go and prove the case, and you have to then ask for a remedy to the particular problem, which is the second step.

We are proposing, with the injunctive relief, to have that up front. You still have to make a prima facie case, and a strong one, that there is an issue with the content that's being distributed by this commercial entity. That is really the only way that this type of theft is going to be combatted in a timely fashion. It is a very significant issue today, and a growing issue, and it's going to have serious ramifications for content creators around the world and content creators within Canada.

3:55 p.m.

Mark Graham Senior Legal Counsel, BCE Inc.

I might add, just to put a couple of facts and figures around it, that I think these kinds of site blocking remedies are available through common law in other countries as well, like the U.K. However, they have still passed law reform to make injunctions directly available against the service providers.

I think the reason is that it's just not a practical solution for a rights holder to sue a website, successfully prosecute the entire case, try to enforce, fail to enforce, and then apply for a separate injunction only at that stage to get the site-blocking order. When you think about how easy it is for someone to then open a new website, that creates an imbalance in the legal remedies available.

I think the FairPlay coalition filed a legal opinion indicating that the timeline and cost were something in excess of two years and $300,000 for one order under the current system. What we're proposing is something that is a little more streamlined.