FairPlay Canada Answers its Critics and Restates its Case

Last week the FairPlay Canada Coalition, now up to 30 members and covering the full range of the content industry value chain, filed its response to the Canadian Radio-television and Telecommunications Commission (CRTC) pursuant to its earlier application in January “to disable online access to piracy sites” (commonly referred to as “site blocking”). For more information on the application, the Coalition and its objectives, see my earlier blog “Hang Together or Hang Separately” here. The “Reply” is a long document (60 plus pages) with six Appendices, but it is a thorough, reasoned, and well-documented rebuttal of the criticisms made by opponents, many of which were generated by misleading online campaigns mounted by anti-copyright advocacy groups like Open Media.

In an article published in Policy Options, the journal of the respected Institute for Research on Public Policy (IRPP), two researchers analyzed the comments on the proposal received by the CRTC, identifying several clusters of issues around which the criticisms centred. Unfortunately the article does not attempt any analysis of the veracity or accuracy of the criticisms, simply assigning them a numeric value. Thus while many comments focussed on the fact that the “Proposal” would enable “corporations” to restrict freedom of speech and the flow of information on the internet, and open the door to future censorship, this is an entirely inaccurate misrepresentation of what is being proposed. Anyone who actually read the Proposal would know that it gives corporations no such rights (any decision to block a particular site would be made by the CRTC as part of its legal mandate). Moreover, since the Proposal is limited to finding a way to block sites that are “blatantly, overwhelmingly, or structurally engaged in piracy”, to argue that it will undermine freedom of expression on the internet is not only a mischaracterization but is part of a deliberate scare campaign. In fact, most of the inaccurate information about the Proposal emanates from an online petition circulated by Open Media.

The IRPP article unfortunately also seems to buy into the argument that piracy is not really a problem in Canada, citing a statistic that “only” seven percent of Canadian households engage in such activity, and goes on to say that “the general public appears to have a more sophisticated long-term view of the problem” (by equating it with blocking of lawful access). Apart from the fact that the Proposal does no such thing, FairPlay’s reply clearly documents the losses to cultural industries in Canada. Using conservative estimates, Appendix A of the “Reply” documents losses of between 583,000 and 974,000 subscriptions to paid content, leading to losses to the industry of between $455 million to $761 million annually. And the problem is growing as many younger Canadians turn to offshore pirate websites to access the content they consume. In fact, according to the study referenced by the Coalition, “piracy sites now regularly reach up to 15.3% of Canadian households (or more than 2 million households) through illegal set-top-boxes loaded with KODI piracy add-ons or providing access to piracy subscription services. This is up from effectively zero five years ago.”

Finally, with regard to the impression that the FairPlay proposal has generated a groundswell of popular concern and opposition amongst the general public (a line swallowed by the IRPP article that talks about the “strong response”), FairPlay’s reply includes the results of a public opinion survey that it commissioned from the well-known polling firm Nanos. The results are interesting and informative. According to the poll, seventy percent of those surveyed (a representative sample) agree with the statement that the government should take action to remove piracy sites. Almost 80% say that Canada should have the same level of online protection, or more, as countries like the UK, France and Australia. Yet tellingly, only 19% could recall any news related to an initiative to deal with online piracy and only 7% had any recall of an anti-piracy coalition. This is hardly a groundswell against the Proposal. In fact, the Coalition’s reply points out that many of the anti-Proposal submissions were generated by a few advocacy websites and goes on to say that, “In the case of the petitions, there are more than 14,000 identified duplicate entries, and an unknowable number of other false entries”.

Apart from persuasively demonstrating that online piracy is an existing and growing problem in Canada (after all, why would the members of the Coalition spend so much time and effort to address a non-existent issue?), the FairPlay Canada document shows that site-blocking is an effective remedy, used or being put in place in most developed countries. It is a proven cost-effective and proportionate response to the problem of offshore piracy sites hiding in cyberspace, beyond the reach of Canadian law.

A major argument of opponents is that the Proposal is deficient because a blocking proposal would not be reviewed by a Court, notwithstanding that the CRTC has quasi-judicial powers and its decisions are reviewable by the Federal Court. This is addressed in the Coalition’s “Reply” document through Appendix C, a submission prepared by Hayes eLaw LLP, as well as reference to the case of KODI add-on vendor Vincent Wesley. Hayes was asked by the Coalition “to briefly outline the steps that a content owner would have to take to try to get an effective court order requiring Canadian ISPs to block access to a specific infringing website, along with a very rough estimate of the legal fees involved in such a step.” Hayes concluded that under current law to obtain a blocking order would take over two years (750 days) and cost around $260,000! Just to obtain a blocking order against an ISP (assuming the ISP presented no substantive defence) would cost in the order of $50,000.

It is worth noting that in Australia, where blocking is done by Court order, ISPs and content owners have agreed on a nominal cost of AUD50 per domain name per ISP that is to be blocked. To reach this point where blocks are simply and cost-effectively implemented through the courts, Australia’s Copyright Act had to be amended. The Copyright Amendment (Online Infringement) Bill was enacted in 2015 laying the groundwork for the expedited Australian legal process. In theory, Canada could do the same through its current review of the Copyright Act but such an outcome seems unlikely given the copyright landscape in this country, and the longer a solution is delayed, the greater the damage.

The case of Vincent Wesley is another example of why going through the courts is not a viable option to effectively deal with online piracy in Canada under the current legislative framework. Wesley owned “MtlFreeTV.com”, a vendor of “fully loaded” set top boxes marketed offline and online to make copyrighted content available illegally. In 2016, Bell, Rogers and Videotron launched a copyright infringement complaint and an injunction was issued blocking the future sale by Wesley of the boxes in question. He ignored the injunction and was served with a contempt notice. He continued to sell the boxes but finally pleaded guilty to contempt. He was fined but did not pay and was then sentenced to a number of hours of community service, which he failed to perform. All the while he continued selling the pirate boxes and has since been charged with contempt of court a second time. No sentence has been handed down as yet, but Wesley claims to have sold the online entity marketing the pirate boxes to an unknown third party, who continues with the infringing activity. Multiply this scenario across dozens if not hundreds of vendors who openly sell these boxes and market them as a path to “free content”, and you begin to get a sense of the dimension of the legal challenge.

Instituting an Independent Piracy Review process would deal with the illegal box problem by undermining the market for the boxes. They won’t work if the sites that they are configured to access are blocked. A simple and cost-effective solution!

There are many other insights into the problem–and the solution–in FairPlay’s “Reply” document but there isn’t space here to delve into them all. While it would be nice if all truly interested parties actually read the Coalition’s response, I recognize that is unlikely so, as a conclusion, I will walk you through the main lines of argumentation using my own shorthand summary.

1. There is a demonstrated problem of online piracy in Canada that is having a significant impact on Canadian cultural industries;
2. An effective tool (site blocking) exists to deal with this problem, with experience elsewhere indicating success rates of between 70 and 90% in reducing piracy visits;
3. Copyright law alone is insufficient to deal with the problem (high cost, ineffectiveness of enforcement);
4. Public opinion supports government action to deal with this issue;
5. The proposed remedy is narrowly tailored and practical. It sets a high bar for blocking so as not to create any collateral damage;
6. It is easy to implement by ISPs, and is cost-effective;
7. It in no way interferes with Net Neutrality, which deals with lawful content on the internet;
8. It conform with international best practices and is consistent with human rights and freedom of expression principles;
9. An administrative solution is a practical solution, consistent with Canadian practice and experience in other spheres;
10. The CRTC has the jurisdiction and the expertise to deal with this issue and is the right forum to use.

That’s the top-line summary. If this has tempted you to take a deeper dive, go to the CRTC site where FairPlay’s reply, (plus all the other submissions), are available. It’s now over to the Commission to decide whether to exercise its mandate. I hope it does.

© Hugh Stephens, 2018. All Rights Reserved.