Mr. Speaker, I am very pleased to rise today in the House to support Bill C-2, an act to amend the Radiocommunication Act.
Bill C-2 would amend the Radiocommunication Act to add import control measures in respect of radio apparatus or devices used for decoding encrypted subscription programming signals. It would make importation of them without an import certificate an offence and would provide for the issuance of the certificates, as well as for ministerial exemptions from the requirement.
Finally, it would provide measures to facilitate compliance with and enforcement of the act, including adding certain inspection powers, increasing penalties, and providing the option for a person who pursues a civil remedy to elect statutory damages.
Let me begin by commending the Minister of Industry for immediately proceeding with this legislation. In June 2003, the Standing Committee on Canadian Heritage tabled its report after a two year study of the Canadian broadcasting system. I had the opportunity to participate in that study, first as a parliamentary secretary to the Minister of Canadian Heritage and then as a member of the committee.
The issue of the black and grey satellite markets was extensively reviewed and the issues in fact discussed in chapter 16 of that report, which is entitled “Our Cultural Sovereignty: The Second Century of Canadian Broadcasting”. I am pleased to say that in fact this study is now being used throughout Canada at Canadian universities as the textbook, the must read text, for the study of broadcasting in Canada.
As noted in the heritage committee's report, satellite distributors in Canada account for 1.7 million of the total 2.8 million--or over 60%--of all digital television subscribers. The CRTC currently licenses two suppliers to provide direct to home, or DTH, satellite television services to Canadians. One is Bell ExpressVu and the other is Star Choice, which is owned by Shaw Communications. What is important for all members of the House to know, and for Canadians to know, is that no other North American company is licensed to provide satellite signals to Canadians.
It is also important to understand how this technology works. Satellite and broadcasting technology allows a television broadcaster to send a signal to a satellite which is located in orbit above the earth. That satellite will send back the same signal, covering a portion of the earth's surface, which is known as a signal's footprint. The technology thus allows a signal to be sent directly to any place that has a device for receiving the signal, hence the term direct to home, or DTH, television.
In order to protect the commercial value of satellite television services, the signals are encrypted or scrambled by the broadcaster. To be received in intelligible form, the signal must be decoded or descrambled. If viewers wish to receive these signals, they must subscribe to the channel or channels providing the signals. Upon purchasing the necessary hardware and paying a fee, the broadcaster will supply viewers with some form of authorization unique to the subscriber's decoder, allowing them to receive the signals.
However, as we have heard today and as we all know, our satellite programming services and signals are being stolen--and I cannot help but emphasize the word stolen--by various means designed to circumvent the proper operation of the authorization system.
Again, let me remind the House of what is actually taking place here. Satellite programming signals are encrypted. Authorized subscribers are provided with a control access module or a smart card and decoder by the DTH distributor, but it is possible for hackers to develop technology to decode the encryption. Periodically, therefore, the distributors change the encryption of their signals as a means of eliminating users who have gained unauthorized access to their programming and thus are stealing it. The hackers respond again by building technology to break this new code.
So what we have here is a cat and mouse game, where the companies are always trying to stay one step ahead of the signal pirates and the pirates are equally resourceful in finding ways of breaking the signal.
Signal theft is illegal and the RCMP has stepped up its enforcement of the law. The bill before us supports its efforts by providing penalties that will act as a deterrent once a violator has been prosecuted. This is the remedy for criminal action.
There is another way to deter signal piracy and that is through civil action on the part of the DTH distributors. The bill before us will help encourage legitimate satellite companies to pursue civil action thereby helping reduce the cost of police enforcement of the law.
Let me first explain that under the current civil law regime, victims of satellite piracy, that is, the legitimate satellite companies, are required to show what their losses are. However, pirating is an underground activity. It is very difficult to provide accurate evidence of the real damage.
Under this bill the victims of piracy will be able to opt for statutory damages that will help compensate them for the theft of their intellectual property. Again I have to remind everyone we are talking about theft. We are talking about stealing.
Where pirates are engaged in signal theft for commercial gain, the courts will be able to impose a statutory fine of a maximum of $100,000. Yes, this is a substantial fine but it is designed to be more than simply a cost of doing business for the signal pirates.
For individuals convicted of signal theft, the amount of damages remains the same, capped at $1,000. This is still a significant amount for an individual. It should remain as a deterrent when the satellite companies pursue civil action against individuals.
I do want to emphasize that the focus of the bill before us is not on the individuals who violate the act so much as those who in fact establish businesses that violate the act for commercial gain. We want to deter their trafficking in illegal satellite equipment.
Nor is the focus of Bill C-2 on the hackers who develop the pirate technology. Hackers are individuals who normally are not business people. They are usually motivated by the challenge of hacking encrypted systems, not by profits. They are not likely to be deterred by the threat of financial loss. Once again we can make sure that the businesses that buy their products and use their products for commercial gain are penalized. That is in fact what the bill does, both through the criminal fines and through the statutory fines in the event of a successful civil action.
Businesses that provide television programs need to recover the investment they make in their businesses. When they suffer losses due to piracy, their business viability is threatened. The result is lost jobs and investment in the broadcasting industry and most important, investment in Canadian programming. The satellite and cable companies want fair competition. They cannot compete with free TV and neither should they.
Bill C-2 will not only act as a deterrent to those who would compete unfairly through illegal means, it also gives the victims of piracy a chance to recover some of the revenues they have lost through illegal activities. It will help create an open and fair marketplace for television broadcasting in Canada. That is good for the industry and in the long run for Canadian viewers.
In conclusion, I hope hon. members will join me in supporting this bill.