Canadian broadcasters have for years purchased the exclusive rights to air popular U.S. programming in Canada.  This approach led to the simultaneous substitution policies that allow Canadian broadcasters to compel cable and satellite companies to replace the U.S. broadcast of a particular show with the Canadian feed (complete with Canadian commercials).  

As video streaming on the Internet emerged as an increasingly popular method of distribution, Canadian broadcasters began bargaining for both the over-the-air and Internet rights to U.S. programs.  With those rights in hand, broadcasters streamed their own version of the programs exclusively to their Canadian audiences.  This explains why Comedy Central streams programs such as the Daily Show in the U.S., but Canadian users trying to access those streams online are redirected to CTV's Comedy Network site.

The same geography based licences arise with live sports programming and music services. World Cup matches are available on the Internet in countries around the world, yet the national broadcast rights holder (CBC in Canada, ABC/ESPN in the U.S.) limits their streams to a domestic audience.

Music services and book publishers face many of the same licencing hurdles.  Apple iTunes arrived in Canada nearly two years after the U.S. edition not because of copyright laws, but rather because a new round of negotiations was needed with copyright owners to obtain the necessary approvals.  

These delays continue until today, with Pandora - a hugely popular music service - blocked to Canadian users and Spotify's North American launch the victim of successive delays (Spotify owners have indicated they would like to launch the service simultaneously in the U.S. and Canada).

Canadian Apple iPad owners have found the same licencing limitations apply to the electronic book market.  Owners of the popular device can choose from among thousands of public domain books, but the electronic book store supported by the major book publishers in the U.S. has been slow to migrate its way north to Canada.

While frustrated Canadians may be inclined to call on the government to "fix" the problem, the reality is that this is a business issue.  Geo-blocking will only disappear if the business models they support give way to global approaches that make the borderless Internet a reality.

India and China formally raised their complaints earlier this month at the World Trade Organization, where they identified five concerns with the agreement.  

First, they fear ACTA conflicts with international trade law and would create legal uncertainty.

Second, they believe ACTA undermines the balance of rights, obligations, and flexibilities that exist within international law.  This applies to both trade issues and intellectual property matters.  For example, both India and Canada are currently working to implement international intellectual property rules within their domestic laws (both countries have tabled draft copyright bills) and ACTA would create significant new restrictions that could have an immediate domestic impact.

Third, there is concern that ACTA could have a dangerous effect on access to medicines by disrupting shipment of goods such as pharmaceuticals.  Over the past few years, European countries have seized generic medicines traveling between India and Brazil.  Stopping delivery of crucial medicines while in transit creates potential health risks for countries anxious to import them for delivery to waiting patients.  

The prospect of seized generic medicines - ACTA calls for increased seizure powers by customs officials - could impact Canadian pharmaceutical companies as well, given the success of several generic pharmaceutical companies in serving a global marketplace.

Fourth, governments are uncomfortable with the prospect that ACTA could force them to allocate new resources toward intellectual property enforcement ahead of other important policy concerns. While safeguarding intellectual property is important, many developing countries can ill-afford to pull scarce law enforcement personnel away from investigating violent crime in order to track down purveyors of fake handbags or DVDs.

Fifth, there are real concerns that ACTA establishes a dangerous precedent by brushing aside United Nations-based international arenas that offer greater transparency and consensus-driven policies in favour of a closed, non-transparent negotiation process that intentionally excludes developing countries.  

These concerns should resonate strongly with Canadian officials hosting the G20, since just as Canada tries to broaden the scope of international economic discussions to include major developed and developing countries, ACTA represents a step in the opposite direction.

While some may suggest that the developing world opposition provides evidence that ACTA is actually on the right track, the reality is that it is designed to apply to the very countries that are now preparing to openly oppose it.  There is no mechanism to "force" these countries to abide by ACTA standards.   Just as Canada has sought to broaden participation through the G20, the best approach to gaining broader acceptance is to include developing countries in the ACTA talks, not leave them on the outside in the hope of later pressuring them to comply with an agreement from which they were deliberately excluded.

First, the new joint Bell-Telus network now means that Rogers is no longer the only provider capable of running the device. With each of the big three offering the device, an unlocked version makes consumer and business sense.

Second, Canadian wireless carriers have attempted to lock consumers into contracts for far longer than virtually any other developed country, with three-year contracts considered the norm.  Several years ago Canada instituted wireless number portability that allows consumers to keep their numbers when switching providers, yet long-term contracts have proven a major barrier to full portability. Given consumer frustration with long-term lock-in, offering a full priced device without the contractual burden may resonate with consumers willing to pay more upfront for immediate contractual freedom.

Third, there has been a dramatic shift in power in recent years within the wireless marketplace.  Until recently, wireless carriers occupied the power position since handset makers depended on them for distribution of their devices.  Carriers were able to extract favourable terms and demand carrier-specific restrictions on devices that ran on their networks.  The popularity of smartphones from Apple, Research in Motion, and Google have reversed this dynamic, however, with the device makers now positioned to dictate terms to carriers anxious to offer hot devices that often run in short supply.

Fourth, the government sent signals earlier this month that it wants to avoid erecting new barriers that could render unlocking phones more difficult. Bill C-32, the recently tabled copyright bill, expressly excludes unlocking cellphones from its ambit. The last copyright bill would have made it a violation for Canadians to unlock their cellphones and banned the distribution of software programs that could be used to do so.  This bill permits unlocking (subject to contractual restrictions), though obtaining the technical tools for those consumers with locked phones may prove difficult.

Given all of these developments - marketplace demand for unlocked phones, changing power dynamics, and government policy designed to foster consumer mobility - is there anything more to be done?

There is at least one stumbling block left that needs to be addressed. The availability of an unlocked iPhone may foreshadow a broader shift in the marketplace, yet millions of Canadians are still stuck with phones locked to a single carrier.  Once the consumer contract expires, many believe the carrier should be obligated to unlock the phone upon request.  That obligation lies at the heart of the Cell Phone Freedom Act, a private member's bill introduced last week by NDP MP Bruce Hyer. Whether by legislation or market pressure, it appears that true mobility may ultimately be coming to the Canadian mobile market.

The case pitted the Private Career Training Institutions Agency, a regulatory body that oversees career training institutions that operate throughout the province, against Vancouver Career College (Burnaby) Inc., which provides a variety of post-secondary educational services under various business names, including Vancouver Career College, CDI College, and the Vancouver College of Art and Design (VCC).

The agency applied to the court for an order blocking VCC from engaging in misleading advertising.  The claim arose from keyword advertisements on Google and Yahoo in which VCC purchased the keywords of competitors.  

VCC was an aggressive Internet advertiser, having entered bids on more than 7,000 keywords.  The court was presented with considerable evidence that VCC regularly purchased keywords of competitor institutions so that searches using terms of those institutions would generate VCC as the lead sponsored link.

The agency began to receive complaints from competitors over the VCC practice and even fielded a claim from one student who said she had mistakenly registered for a course at VCC after searching for Vancouver Community College, though oddly the registration came after a 90-minute in-person interview and the completion of an admissions test.

At the heart of the case was whether VCC had engaged in deceptive practices. VCC argued that its Internet advertising strategy is essentially a modern-day version of the common marketing practice of a company placing its advertisement in close proximity to a competitor's advertisement.

The court sided with VCC, concluding that its use of competitor names in its keyword advertising strategy was unlikely to deceive potential students.  The judge noted "where a student erroneously chooses to examine a VCC Inc. ‘sponsored link' website instead of the website of the institution they originally wanted, I am satisfied the information readily available on the various VCC Inc. websites is more than adequate to inform the student that they are examining a VCC Inc. institution and not the one they were initially searching for."

Given the importance of keyword advertising to the financial success of companies such as Google and Yahoo, the case is an important win for legitimizing increasingly common Internet advertising practices and serves as a reminder to Internet users that they should pay attention when they click.

Unfortunately, the legal protection for digital locks - unquestionably the biggest and most controversial digital copyright issue - is the one area where there is no compromise.  Despite a national copyright consultation that soundly rejected inflexible protections for digital locks on CDs, DVDs, e-books, and other devices, the government has caved to U.S. pressure and brought back rules that mirror those found in the United States.  These rules limit more than just copying as they can also block Canadian consumers from even using products they have purchased.

Bill C-32, which ironically carries the same number as the last time Canada underwent major copyright reforms in 1997, features three types of provisions: sector-specific reforms, compromise provisions, and the no-compromise digital lock rules.

The sector-specific reforms are designed to address a single constituency or stakeholder concern. These reforms include something for almost everyone: new rights for performers and photographers, a new exception for Canadian broadcasters, new liability for BitTorrent search services, as well as the legalization of common consumer activities such as recording television shows and transferring songs from a CD to an iPod.  In fact, there is even a “YouTube” user-generated content remix exception that grants Canadians the right to create remixed work for non-commercial purposes under certain circumstances.

There are a number of areas where the government has worked toward a genuine compromise.  This includes reform to Canada's fair dealing provision, which establishes when copyrighted works may be used without permission.  

The government rejected both pleas for no changes as well as arguments for a flexible fair dealing that would have opened the door to courts adding exceptions to the current fair dealing categories of research, private study, news reporting, criticism, and review.  Instead, it identified some specific new exceptions that assist creators (parody and satire), educators (education exception, education Internet exception), and consumers (time shifting, format shifting, backup copies).

The Internet provider liability similarly represent a compromise, as the government is sticking with a "notice-and-notice" system that requires providers to forward allegations of infringement to subscribers.  The system is costly for the providers, but has proven successful in discouraging infringement.  

It also compromised on the statutory damages rules that create the risk of multi-million dollar liability for cases of non-commercial infringement.  The new rules reduce non-commercial liability to a range of $100 to $5,000, which is not insignificant but well below the $20,000 per infringement cap currently found in the law.

All these attempts at balance should be welcomed, yet they are undermined by the no-compromise position on digital locks.

The foundational principle of the new bill is that anytime a digital lock is used, it trumps virtually all other rights. This means that both the existing fair dealing rights and Bill C-32's new rights all cease to function effectively so long as the rights holder places a digital lock on their content or device.  Moreover, the digital lock approach is not limited to fair dealing - library provisions include a requirement for digital copies to self-destruct within five days and distance learning teaching provisions require the destruction of course materials 30 days after the course concludes.

The government could have introduced a compromise provision that would have allowed for compliance with international treaties, protection for digital locks and the preservation of the copyright balance. In failing to strike that balance, the government has introduced a flawed, but potentially fixable bill.

First, the bill is certain to include a handful of changes to the current fair dealing provision. The Supreme Court of Canada has ruled that Canada's fair dealing provision - which is similar though not identical to fair use in the U.S. - must be interpreted in a broad and liberal manner. Yet the law currently includes a limited number of categories (research, private study, criticism, news reporting, and review) that renders many everyday activities illegal.  

During the copyright consultation, many Canadians called for the introduction of a flexible fair dealing provision that would legalize many common activities.  This is an issue that touches everyone.  Creators would benefit from a parody and satire exception. Consumers would benefit from exceptions for recording television shows or changing the format of content they have purchased. Educators would benefit from exceptions to cover teaching activities and distance education.

Sources say the government has rejected the flexible fair dealing approach, but that new exceptions will make their way into the bill.  The scope of the exceptions - the last bill contained 12 conditions in order to legally record a television show - will go a long way to determining whether the bill tries to strike a balance between competing copyright interests.

Second, the bill will address the responsibility of Internet intermediaries such as Internet providers and search engines for the activities of their users and subscribers.  The past two copyright bills both struck a reasonable compromise by adopting an approach that gave copyright holders the ability to warn users about alleged infringements, but protected the privacy and free speech rights of the public.  The bill will likely adopt the same system once again, which should garner support from across the spectrum.

Third, the bill will include digital lock provisions, known as anti-circumvention rules.  These rules, which will allow Canada to implement international copyright treaties it signed over ten years ago, was the most-discussed issue during the consultation.  Thousands of Canadians argued that Canada should adopt a flexible implementation that renders it illegal to “pick a digital lock” for the purposes of copyright infringement, but preserves the right to do so for legal purposes.

Sources say the government has rejected the flexible approach in favour of the U.S.-style ban on circumvention (subject to a handful of limited exceptions).  If true, the problem with the approach is that it undermines both the new and existing exceptions.  For millions of Canadians, that means that their user rights will be lost whenever a digital lock is present including for CDs, DVDs, electronic books, and many other devices.  In the process, the balance will tilt strongly away from consumers and their property rights over their own purchases.

The centrepiece is a long overdue security breach disclosure requirement. Over the past seven years, virtually every U.S. state has enacted disclosure rules that compel organizations that suffer a security breach that places personal information at risk to promptly disclose that fact to the affected individuals.  By mandating notification, the laws ensure that individuals are better able to guard against identity theft by closely monitoring their credit card bills, bank accounts, and credit reports for any unusual activity.

From a business perspective, the laws create a strong incentive to protect personal information since the notification process is both expensive and embarrassing.  Moreover, the laws have persuaded some organizations to rethink the amount of personal information they retain, since mounting data collection and retention increases the damaging consequences of a security breach.

The Canadian proposal establishes two requirements.  First, businesses are required to report a "material breach of security safeguards involving personal information under its control" to the Privacy Commissioner.  The business determines whether the breach meets this standard by assessing the sensitivity of the information, the number of individuals affected, and whether there is a systemic security problem.

Second, businesses are required to notify individuals affected by the breach "if it is reasonable in the circumstances to believe that the breach creates a real risk of significant harm to the individual."  The business makes its own determination of whether there is a real risk by considering the sensitivity of the information and the probability that the personal information will be misused.

While the bill is better than the current situation where there is no security breach disclosure requirement, it falls far short of the rules found elsewhere.  The government’s proposal sets a very high threshold for disclosure of a breach and contains no clear penalties for non-disclosure.

By comparison, the California law establishes a threshold of whether an unauthorized person acquired the information, not whether there is real risk of significant harm (other states merely require harm, not significant harm).  Moreover, the California law requires disclosure in the most expedient time possible and without unreasonable delay - far quicker than the Canadian plan.

Some states also establish tough penalties for failure to promptly notify.  For example, Florida's law provides for penalties of up to US$500,000 for failure to notify affected individuals and up to US$50,000 for failure to document non-notifications of security breaches.

Security breach disclosure was widely recognized as a major hole in the Canadian law framework, yet this proposal is a disappointment that falls short of striking the right balance between protecting Canadians, encouraging appropriate safeguards of personal information, and guarding against overwhelming Canadians with too many notices.

In fact, with no penalties for failure to notify security breaches, the provisions may do more harm than good.  If it becomes law, Canadians will expect to receive notifications in the event of a breach, but companies may err on the side of not notifying, safe in the knowledge that there are no established financial penalties for failing to do so.

1.  Moore has been an outspoken critic of the extension of the private copying levy to iPods, deriding it as the iTax.  He is content to leave the levy on blank CDs in place, yet the forthcoming bill is likely to block personal copying of consumer purchased CDs that contain copy-controls onto blank CDs.  Why does Moore believe it is acceptable for Canadians to pay twice - once for the CD and a second time for the levy on a blank CD - and still face the prospect of violating the law?

2.  Thousands of Canadians buy DVDs from outside the country as they seek content not typically available at home.  Yet DVDs purchased in Europe, Asia, or South America do not work on Canadian DVD players.  The forthcoming bill is likely to block attempts to circumvent the region coding on DVDs and thereby stop Canadians from legally viewing DVDs they have purchased. Is this consistent with Moore's pro-consumer position in other areas?

3.  Documentary film makers and visual artists often use small clips from DVDs in their art.  The use of those works without permission is currently permitted through the criticism and review sections of the fair dealing provision in the Copyright Act.  The forthcoming bill is likely to block unlocking a DVD to use such clips, however, since the presence of a digital lock will trump fair dealing.  In fact, even the much-discussed potential introduction of new artists' exceptions for parody and satire would be limited by locks. What is Moore's plan to allow Canadian creators to complete their art?

4.  The Canadian media regularly rely on the news reporting section of the fair dealing provision to use portions of audio or video without permission. The forthcoming bill is likely to render such activities violations of the law anytime a digital lock guards the audio or video.  Does Moore believe this strikes a fair balance between copyright and freedom of the press?

5.  With the emergence of the Amazon Kindle and Apple iPad, Canadian teachers and students are facing increasing pressure to switch to electronic books.  E-books offer great potential, but also frequently come with restrictive digital locks that have been used to remotely delete content from users' devices in their own homes.  Given the importance of the research and private study sections in the fair dealing provision, is Moore satisfied with an approach that would hamper the use of those sections for a critical part of the education process?

6.  The new copyright bill is likely to reintroduce new exceptions that legalize recording television shows (time shifting) or moving purchased content from one format to another (format shifting).  While consumers will undoubtedly welcome these long overdue reforms, they will likely be contingent on the absence of any digital locks.  Does Moore fear the new rights will be regularly blocked by anti-copying technologies?

7.  Is Moore aware that the solution to all of these concerns is a single provision that would allow Canada to implement the World Intellectual Property Organization's Internet treaties, provide legal protection for digital locks, and preserve the copyright balance by simply confirming that circumvention of a digital lock is not prohibited when undertaken for lawful purposes?

Yet despite the seeming preference for market-led solutions, that approach appears to have been largely forgotten in a recent decision involving a small new broadcaster devoted to emerging musical artists in Quebec.  Rather than giving consumers the opportunity to decide whether there is a need for such a station, the CRTC blocked the application for a broadcast licence in a decision that featured a spirited dissent from Quebec-based commissioner Michel Morin.

At issue was Glassbox Television Inc.’s licence application for the launch of AUX TV, a national, French-language specialty programming broadcaster that planned to offer programming devoted to emerging music, including assistance for emerging artists. The same company already offers a version of AUX TV in English.

Given the CRTC's focus on the promotion of Canadian culture, this application would seem like a proverbial slam dunk.  While the Astral Group's MusiquePlus has offered French music programming in the Quebec market for years, it provides little coverage of emerging artists.  In fact, even though emerging music videos are required to constitute 50 percent of MusiquePlus programming, those videos are broadcast from 12:30 a.m. to 9:00 a.m. on weekdays and from 1:00 a.m. to 8:00 a.m. on weekends.

Sensing a competitor in the marketplace, MusiquePlus objected to the AUX TV application, arguing the proposed programming would be directly competitive with its existing service.  Avoiding direct competition has been a cornerstone of CRTC policy for many years, but it has typically been willing to define new offerings flexibly to allow for new entrants (CRTC skeptics will rightly note that true reliance on the market would welcome competitive offerings since that is the very definition of a market-led, consumer-driven system.)

Despite a clear opportunity in the Quebec market and a comparable service in English, the commission rejected the application, offering a terse opinion that AUX TV would compete with MusiquePlus and that it was “not convinced that the safeguards presented in the application are sufficient to eliminate this risk.”

That reasoning brought a stinging response from Morin.  Noting the CRTC's concern with marketplace risk, he argued “the commission's role is not to eliminate competition in order to protect a service. Is ours a market economy or a state-controlled economy? This is no longer the 1970s, when the commission worked to establish a regulatory framework designed to protect a budding industry. We are in the second decade of the 21st century. No, thank you. Bring on competition as far as I am concerned!”

Morin's dissent places the spotlight on a decades-long debate on the appropriate role for the CRTC.  Protecting broadcasters from competitive entrants may have seemed like a good idea when there were a limited number of channels and Canada's specialty market was in its early stages, unready to do battle with well-established U.S. giants.  Today, specialty programming is the most profitable marketplace segment and competition comes from not only from other channels but unregulated Internet streaming as well.  The AUX TV decision marks an unfortunate blast from the past and provides a reminder that market-led solutions are still not guaranteed in Canadian broadcasting.