As the US, Canada and Mexico wrestle with the difficult task of “updating” NAFTA (judging by press reports of negotiating demands from the Trump Administration, the US wants to turn a Free Trade Agreement into a Managed Trade Agreement, with management in the hands of the US, but that is another story), among the issues to be looked at is the protection of intellectual property. When NAFTA was negotiated in the 1990s the internet was in its infancy. Things like e-commerce and digital piracy had yet to appear. It is a different world today, and arguably one area where all three countries could benefit is to update the provisions of the agreement that deal with the digital world. Online digital piracy has become a big issue globally, undermining the entertainment industries (music, film, television) in all three countries and eroding the value of content paid for and distributed by broadcasters and online content providers.
The Canadian Parliament is conducting hearings on NAFTA and recently heard from two of Canada’s major ISPs, Bell Canada and Rogers. Among a range of issues raised by Bell (Canada’s largest backbone telecom provider, but also a major player in the content business, owning Canada’s largest private TV network (CTV) and a number of specialty and pay-TV channels) was the issue of copyright enforcement. Bell recommended the creation of criminal provisions for any infringement of copyright, including facilitating and enabling piracy where it’s undertaken for a commercial purpose. The Bell spokesperson also suggested that the best way to deal with the constantly changing technological challenges involved in combatting online piracy would be to institute site blocking;
“Our view on how we solve the piracy problem is not coming up with new technological measures. It’s blocking access to piracy. How do you do that? We would like to see measures put in place whereby all Internet service providers are required to block consumer access to pirated websites. In our view, that’s the only way to stop it. You would mandate all ISPs across the country to essentially block access to a blacklist of egregious piracy sites. That would be job number one.”
When asked how the ISPs would identify which sites to block, the reply was;
“In our view an independent agency would be charged with that task. You certainly wouldn’t want the ISPs acting as censors as to what content is pirated content. But, surely, an independent third-party agency could be formed and could create a blacklist of pirate sites, and then the ISPs would be required to block them. That’s, at a high level, how we would see it unfolding, perhaps overseen by a regulator like the CRTC.” (The Canadian Radio-television and Telecommunications Commission, the agency that regulates broadcasting and telecommunications in Canada).
The revelation that Bell, one of Canada’s largest content producers and distributors, was concerned about online piracy and was proposing reasonable measures to deal with it caused the predictable over-reaction from copyright skeptics, such as Michael Geist and led to alarmist headlines on CBC News such as “Radical and Over-reaching: Bell Wants Canadians Blocked from Piracy Websites”. One had to read the posted article to learn that the “radical and over-reaching” quote was from EFF-clone, Vancouver-based OpenMedia. The CBC article also gave prominent coverage to Prof. Geist’s comments criticizing Bell’s proposed process (i.e. using the CRTC to oversee an independent agency). The position on site-blocking of Bell’s major ISP competitor, Rogers, was not fully articulated but the comments of its representative suggest that it is not necessarily opposed.
“We’re looking at a variety of options to deal with this streaming phenomenon that Rob (Bell spokesperson) is addressing, which has arisen very quickly since our own Copyright Act came into place.”
Where Rogers differed from Bell was with respect to the means to achieve better enforcement. Whereas Bell was suggesting that site blocking could be one feature of a better IP enforcement regime negotiated through NAFTA, Rogers preferred to deal with this through the upcoming 5-year review of Canada’s Copyright Act. What is significant, however, is that we have one, possibly two, major ISPs in Canada re-thinking their position on site blocking. Michael Geist claims that Bell “broke with the telecomm sector on copyright” and that “Bell’s emergence as one of Canada’s most aggressive copyright lobbyists and litigators has major implications for future copyright reform in Canada”.
He might have a point that getting a major ISP to support better copyright protection in Canada will have implications—positive implications for the copyright industries.
ISPs and online intermediaries like Google traditionally have been foot-draggers when it comes to copyright protection. Their view was that anything that drove more traffic on the internet was good, even if much of it was directed at illegal or infringing activity. It was a case of see, hear and speak no evil. ISPs and internet intermediaries had no responsibility for what their users did on the internet, so the argument went. All they did was provide the means to connect, or to search for content. The rationale was, “Don’t blame the telephone company if some people make harassing phone calls”. Site blocking was not something that ISPs were interested in. After all, it might annoy some of their customers, and would require effort to implement. But that is now changing, at least with respect to ISPs and site blocking. Increasingly, site blocking (more accurately described as disabling access to copyright infringing sites) is recognized as a highly effective means to combat proliferating online piracy, as I have written in earlier blogs.
More than 40 countries now have or are obligated to put in place legislation to implement site blocking, including all the members of the EU. Two of the most active jurisdictions are the UK and Australia. In Australia, dozens of sites and hundreds of domain names have been blocked pursuant to five injunctions issued by the Federal Court following passage of new legislation in 2015. Initially the ISPs in Australia were reluctant converts but they have now ceased to oppose the injunctions. There are good reasons to explain this. First, the process is quick and transparent and a reasonable cost-sharing approach has been found (the plaintiffs pay AUD50 per block to the ISPs). Second, like Bell, many ISPs are themselves gaining a greater foothold in the content industry. A good example is Telstra, Australia’s largest ISP and telecomm provider, which holds a large stake in Foxtel, Australia’s premium broadcast content provider. Third, studies have shown that almost 25% of internet traffic is generated by copyright infringing traffic. While users pay for this use, it crowds out other more productive uses of precious bandwidth and pushes telecommunications backbone providers to invest in and expand their networks more quickly than necessary. Finally, ISPs surely realize that building a business model on the back of infringing content is a losing proposition in the long run. Websites providing infringing material on a commercial basis usually locate in jurisdictions where the normal rule of law does not apply, pay no taxes and are frequently associated with other criminal activities. Cooperation from ISPs in blocking them is the “right thing to do” in terms of building a healthy economy and healthy society.
Site blocking actually helps consumers–their customers–by preventing them from accessing sites that propagate large amounts of malware and host high risk advertising. A study conducted by the Digital Citizens Alliance found that one out of three content theft sites exposed users to malware (such as Random Access Trojans, or “RATs”, ) and that internet users who visited such sites were 28 times more likely to get malware from these sites than from mainstream websites or licensed content providers. Other studies have shown that pirate sites are largely supported by “high risk” advertising, namely advertising products that fall outside the legitimate economy. One recent study, for example, found that 94% of the advertisements found on the most popular piracy sites in Thailand were “high risk,” defined as advertisements promoting goods and services falling outside of the legitimate economy, and which in many cases were illegal.
There is no question that site blocking is one of the few effective remedies to deter the criminal elements that run content theft sites, bad actors who are almost always located beyond the reach of national law. As I pointed out in an earlier blog, studies in the UK showed that blocking pirate sites broadly (53 pirate websites) led to a 90% reduction in visits to the blocked sites, resulting in a 22% decrease in piracy for all users affected. Moreover the deterrent element is long-lasting. The imposition of an immediate barrier diverts traffic from pirate sites and encourages users to find legitimate content. One of the beneficial by-products documented by the British study was a concomitant 10% increase in videos viewed on legal ad-supported streaming sites like the BBC and Channel 5 during the period of blockage. These results have been broadly replicated in other site-blocking countries as varied as Portugal, Korea and Australia.
In the UK and Australia, and some European countries, the site blocking occurs pursuant to a court order. If it works in the UK and Australia, both jurisdictions with similar jurisprudence to Canada, why wouldn’t it work in the Canadian context? Of course, Bell’s representative speaking before the Parliamentary committee did not suggest that blocking be implemented by the courts, but rather by “an independent third party agency”. This is also a successful model followed in some jurisdictions (Korea, Thailand and Italy are examples) where the blocking is implemented by a regulatory agency after application from content owners and review by the agency. Given legal considerations in Canada such as the “Charter” (Charter of Rights and Freedoms), it would probably be more effective to have blocking reviewed and sanctioned by the courts. Perhaps Bell did not suggest this because of the perceived delays and costs, and the fact that it is necessary to go back to court to get new sites blocked as the pirates shift to new URLs and domain names, but the Australian experience shows that a court-based process can work effectively. And once it is established, it starts to change behaviour.
One advantage of working through the courts would be to rebut the criticism that blocking sites amounts to, what the Globe and Mail hyperbolically called, “a frontal attack on online freedom”. The Globe’s editorial, “Don’t Block Access” was the classic over-statement and oversimplification. What, asked the Globe, would happen if an address is listed in error? What if overzealous content providers block legitimate content? The Globe claims that net neutrality “discourages governments and industry from blocking or favouring sites; states that ignore it tend to be authoritarian”.
This is nonsense. As long as blocking is conducted lawfully and selectively for legitimate purposes, it has nothing to do with net neutrality. Blocking sites that peddle child pornography or terrorism, as is rightly done in all democratic societies, does not undermine net neutrality. There will always be people who try to equate limited, legally sanctioned, targeted site blocking with an attack on internet freedoms, as if the internet was not subject to the rule of law like any other area of the economy. The best way to rebut such nonsense, in this writer’s view, is to make the process of blocking sites that contravene the law subject to the courts, as is done in the UK and Australia. Once the first few injunctions have been issued, the process will proceed smoothly and the editorial writers at the Globe and critics like Michael Geist can be reassured that the process is being done with appropriate judicial oversight and will not lead to rampant internet censorship.
This may be the time for site blocking to come to Canada—and the rest of North America. Whether this is achieved through a review of domestic legislation or through bilateral trade negotiations, and whether instituted through a judicial or an administrative process, the real issue is how to combat online piracy most effectively, while protecting legitimate uses of the internet. Site blocking has proven it can do the job elsewhere. Why not give it a try?
© Hugh Stephens, 2017. All Rights Reserved.