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E-Business(Updated on Thursdays)


The gap between won't and can't


Thursday, August 19, 1999

What is the difference between won't and can't?

Quite a large one, when you are referring to whether Canada's communications regulator is unable to regulate the Internet -- or has simply opted against doing so, for now.

Amid considerable fanfare in May, the Canadian Radio-television and Telecommunications Commission said it would not regulate the Internet. Most observers applauded the "hands-off" approach. Finally, it seemed, regulators had heeded public sentiment, which was overwhelmingly against CRTC Internet regulation. Lost in the headlines, however, was the fact that the CRTC did not say that it could not regulate the Internet, but rather, that it would not regulate it.

The CRTC's final report began by assessing whether it is entitled to regulate the Internet under the current Broadcasting Act. It reasoned that its regulatory power depends upon the type of service.

Text and graphic transmissions, consisting of alphanumeric text, did not fall under the definition of "broadcasting" found in the Broadcasting Act and were outside the CRTC's jurisdiction. Other transmissions, such as streaming audio and video Webcasts, were broadcasting, the CRTC argued, and fell under its mandate.

Despite its right to regulate, the CRTC found that transmissions such as Webcasts were sufficiently insignificant that no regulation was required (a position I found somewhat ironic as I watched the CRTC press conference live in streaming video on my PC).

More importantly, the CRTC's findings provide the first definitive clue as to whether the Internet is a federal or a provincial matter. The answer is that it is both.

Internet activity that consists solely of alphanumeric text, (for example a small business with an on-line catalogue) is not broadcasting and is considered a provincial matter. A Web site that adds Webcasting (such as streaming audio) to the mix could face classification as a broadcaster, and thus fall under federal jurisdiction.

The significance of the federal-provincial battle for Internet jurisdiction was highlighted in a recent decision of the Canadian Industrial Relations Board. Members of CITY-TV's CityInteractive, the company's Internet services division, petitioned the board to join the Communications, Energy and Paperworkers Union, which represents CITY-TV's broadcast workers.

CITY-TV argued those workers in its CityInteractive unit were functionally separate from workers in its broadcasting division and fell outside of the union. It also argued that the matter was outside of the board's constitutional jurisdiction, which is limited to employees in federally regulated businesses. In CITY-TV's view, the creation of Web content and promotion was strictly a provincial matter.

The board ruled against CITY-TV, finding that not only was the Internet division not capable of being separated from from CITY-TV's broadcasting activities, but that it was engaged in broadcasting and fell under federal jurisdiction.

The board took note of the CRTC new media decision, maintaining that its decision comported with the CRTC analysis that Internet broadcasting could constitute broadcasting under the Broadcasting Act.

And the board emphasized that Webcasting need not be the main on-line activity for federal jurisdiction to apply. In the board's view, all that is necessary is that the Webcasting be interprovincial as well as regular and continuous in nature. For many Web sites featuring streaming multimedia, this standard will be easily met.

The most significant implication of the classification of Webcasting as broadcasting is what it may mean for the application of Bill C-54, Canada's proposed privacy and electronic commerce law. The bill, which stalled in the House of Commons last spring but is likely to be revived next month, establishes a series of privacy protections, including a requirement to obtain consent prior to the collection and use of private data.

Due primarily to jurisdictional concerns, the law applies only to federally regulated businesses during its first three years in force. Assuming that activities such as Webcasting constitute broadcasting, however, businesses and organizations that Webcast could find themselves subject to the law immediately.

In addition to Bill C-54, the application of federal jurisdiction to some Internet activities could impact many other laws and legal bodies.

As the nascent field of Internet law continues to develop, the difference between "could" and "would" looms large indeed.
Michael Geist is a law professor at the University of Ottawa School of Law specializing in Internet and electronic commerce law. He can be reached at

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