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Mr. Minister, please protect the public interest

As the former CEO of Canfor Corp., Canada's largest softwood lumber producer, our new Industry Minister David Emerson developed a well-earned reputation for defending Canadian interests against those of the United States. Despite considerable political pressure, Emerson did not hesitate to file a $250 million arbitration claim against the U.S. over its treatment of Canadian softwood lumber nor to scuttle a trade deal that he feared would result in too many lost Canadian jobs.


Once established as industry minister, Emerson wasted little time in continuing to prioritize Canadian interests. He quickly raised the prospect of tying Canadian energy exports to aggressive U.S. trade policy, commenting, "I think the United States has to make some fairly significant decisions about their relationship with Canada, just as we have to continually assess our relationship with the United States."


Emerson's strong backbone will be tested in the months ahead as he faces unrelenting U.S. pressure on two initiatives that would, if adopted, provide broadcasters with unprecedented control over television signals and severely curtail consumers' expectations with regard to their rights and personal privacy.


While digital copyright reform frequently takes centre stage, the Motion Picture Association of America (MPAA), the leading U.S. motion picture association, has been lobbying for two sets of broadcast controls on a backstage. These include the creation of a new international broadcasters rights treaty and the mandatory implementation of new technological controls into every device that can receive an over-the-air digital signal.


For the past year, U.S. broadcasters and the MPAA have actively lobbied for the creation of the World Intellectual Property Organization's Treaty for the Protection of Broadcasting Organizations. This treaty would grant broadcasters increased powers over who may control, transmit, or record broadcast signals. The U.S. would even like to extend this power to Webcasts, which could be interpreted to cover Internet downloads.


Since copyright law already provides broadcasts with significant protections, Canada has rightly been cautious thus far on the proposed treaty. In fact, the treaty would effectively provide a second layer of protection for broadcasters, leaving some experts questioning whether it is at all necessary.


Of more immediate concern is the imminent introduction of the broadcast flag into the United States and its potential importation into Canada.


The broadcast flag is a piece of software code, embedded by broadcasters in their digital television signals, that dictates permissible uses of the signal. For example, when viewers attempt to copy a program, the flag may dictate that only a single copy may be made, set restrictions on transferring the copy, or even prohibit any copying at all.


The effectiveness of the broadcast flag depends upon devices, such as TVs, videotape recorders, and computers with digital-TV tuner cards, that recognize and respect the flag's instructions. This will be achieved in the U.S. through the implementation of a new rule that as of July 1, 2005, all such devices sold in the country "recognize and give effect to" the broadcast flag.


Although the MPAA and some broadcasters have claimed that broadcast flag protection is needed in order to provide the public with digital television programming, that argument is not supported by the experience to date. Many networks and cable television channels (including Canada's TSN and Rogers Sportsnet) already deliver some high-definition digital content to subscribers, all without broadcast flag protection.


Even more troubling are the serious copyright, privacy, consumer, and marketplace concerns raised by the broadcast flag proposal. By providing broadcasters with increased control over the copying of their broadcasts, the rules may eliminate many rights users take for granted, such as the ability to "time shift" a program by copying a broadcast for future, personal viewing. Moreover, the rules do not account for public domain or political broadcasts. While fair dealing (or fair use in the United States) might allow use of this content under certain circumstances, the broadcast flag will enable broadcasters to restrict all manner of uses, even those to which users are entitled under the law.


Opponents of the broadcast flag have also pointed to worrisome possibilities with regard to personal privacy. Since digital copies would now be limited to a particular device, the broadcast flag could easily be used to facilitate monitoring of individual viewing habits. In fact, one company, MyDTV, has already proposed pop-up style advertisements based on viewer profiles.


The implementation of the broadcast flag has also generated consumer interest concerns. Starting in 2005, the ability to watch over-the-airwaves digital television will be premised on owning a "compliant" device, forcing millions of consumers to incur hundreds of dollars in switching costs.


Finally, the broadcast flag raises serious questions about innovation and the marketplace. Rather than allowing the market to develop on its own, the broadcast flag creates a precedent where government authorities directly regulate the technology that may be made available to ordinary consumers.


Given the controversy associated with the broadcast flag in the U.S., one would think that Canada would be wary about embarking on the same route. Accordingly, it came as a shock to many when an Industry Canada official recently indicated that Canada was likely to follow the U.S. lead by quickly implementing a similar system by July 2005. The official suggested that there was broadcaster support for the measure and that since the U.S. had adopted it, Canadians had little alternative but to follow suit.


While Canadian broadcasters may or may not support the broadcast flag (they have in fact been rather publicly silent on the matter), it is essential Canada craft its own policy by considering the privacy and copyright policies associated with the proposal.


Pre-judging the issue, as some in Minister Emerson's department appear to have done, is a dangerous course of action, that should be replaced immediately by a working group of all stakeholders, including the broader public interest, intent on studying the Canadian options. The suggestion Canada faces a Y2K-like deadline with respect to the broadcast flag appears as overblown as was the Y2K threat itself.


In light of the importance of the issues raised by the broadcast flag, it is heartening that Canada's new Industry Minister is a veteran of supporting Canadian interests in the face of U.S. pressure. When David Emerson salutes the flag on Canada Day 2005, one hopes that it is one with a maple leaf, not a broadcast flag emblazoned with red, white, and blue.

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