Columns

A Digital Economy Blueprint For the New Industry Minister

Jim Prentice, Canada's new Industry Minister, has been on the job for less than a week, yet his appointment has already sent a buzz through the business community. With a member of Prime Minister Stephen Harper's inner circle now at the helm, promoting Canada's global economic competitiveness promises to become a core priority on the government's fall agenda. While some political commentators maintain that the issue rarely translates into voter support, my weekly Law Bytes column (Ottawa Citizen version, homepage version) argues that the good news for Prentice is that reforms focusing on digital issues represent both good policy and smart politics. By prioritizing three issues – communication, copyright, and consumer confidence – he has the opportunity to establish a forward-looking framework that can serve as a model for other countries and provide a payoff at the ballot box.

On the communication front, analysts are divided on whether recent deregulation will result in reduced prices for consumers; however, there is near-universal agreement that deregulation alone is not enough.

August 21, 2007 — 2 comments — Columns

Ipod Levy May Yet Face The Music

My weekly Law Bytes column (Toronto Star version, Ottawa Citizen version, homepage version) focuses on last month's Copyright Board decision that re-opens the door to placing a levy of up to $75 on iPods as part of the private copying levy. I note that the case may create a sense of déjà vu, since it marks the second time that the Canadian Private Copying Collective, the collective that has pocketed more than $150 million from the levy since 2000, has sought to include iPods within the levy system. It first introduced an iPod levy in 2003, only to have the Federal Court of Appeal strike it down as the court declared that "it is for Parliament to decide whether digital audio recorders such as MP3 players are to be brought within the class of items that can be levied. . .as [the law] now reads, there is no authority for certifying a levy on such devices or the memory embedded therein."

Notwithstanding the Court's unambiguous language, the CPCC reintroduced the iPod levy earlier this year, arguing that the MP3 player comments were "obiter"(a legal reference to a passing remark that does not form a necessary part of the court's decision). Canadian retailers and storage media companies unsurprisingly challenged that interpretation, leading to last month's ruling that sided with the CPCC. The Copyright Board did not mince words, suggesting that the levy could also be applied to cellphones and personal computers, and warning that excluding the iPod from the levy system would "instantly makes the conduct of millions of Canadians illegal, and even possibly criminal."

The decision will presumably be appealed, virtually guaranteeing years of litigation that promises to divert millions of dollars earmarked for artists to lawyers instead. While the legal challenges are important, the political repercussions carry greater significance since they may lead to dramatic changes to both the levy and the Copyright Board.

August 6, 2007 — 4 comments — Columns

Dell Case Sets Standard for Online Contracts

My weekly Law Bytes column (Toronto Star version, The Tyee version, homepage version) examines the recent Supreme Court of Canada decision involving Dell Computer, online contracting, and mandatory arbitration clauses. Late on a Friday afternoon in April 2003, Dell Computer's Canadian website featured a pair of erroneous prices for the Axim, the company's handheld computer. Rather than listing the two versions of the device correctly at $379 and $549, the site indicated that the price was $89 and $118. Dell blocked access to the pages the following day, however, the mistakes remained accessible throughout the weekend via a direct hyperlink.

Dell typically sold about three Axims each weekend, yet on this particular April weekend, 354 Quebec-based consumers placed 509 orders. Olivier Dumoulin was among those consumers and when Dell refused to honour the mistaken price, he joined forces with a Quebec-based consumer group to launch a class action lawsuit against the company. Dell tried to block the suit, arguing that its consumer contract provided that all disputes were to be resolved by arbitration.

The Dell case wound its way through the Canadian court system, concluding with a Supreme Court of Canada decision last month. Quebec trial and appellate courts both sided with Dumoulin, ruling that the arbitration clause was not enforceable and that the consumer class action could proceed. The Supreme Court overturned those decisions, concluding that the arbitration clause was enforceable and that the use of a hyperlink was sufficient. Dell unsurprisingly welcomed the decision, maintaining that the ability to use arbitration "will lead to the fair and efficient resolution of cases for consumers and business alike." Consumer groups were furious, stating that the decision marked "a dark day for online shoppers in Canada.”

Yet a closer examination of the decision and the current state of e-commerce in Canada suggests that neither side is right.

July 30, 2007 — 7 comments — Columns

Uncompetitive Canadian Pricing Threatens Mobile Internet

My weekly Law Bytes column (Ottawa Citizen version, Toronto Star version, homepage version) focuses on the mobile Internet in Canada, arguing that we are falling behind even developing countries as a consequence of overpriced mobile data services in our cozy, uncompetitive market. Until recently, the conventional wisdom held that there were two barriers – technology and cost – to the emergence of widespread mobile Internet use. From a technological perspective, most cellphones and wireless devices could manage email and text messaging, but were ill-suited for the full Internet experience including browsing and Internet video. That technology barrier has largely been eliminated, fuelled by popularity of devices such as the Apple iPhone.

The cost barrier still looms large, however. Canadian carriers have treated mobile Internet use as a business product, establishing pricing plans that force most consumers to frugally conserve their time online. Indeed, the mobile Internet in Canada is reminiscent of Internet access in the mid-1990s, when dial-up access dominated the market and consumers paid by the minute for their time online.
For example, Rogers – Canada's sole GSM provider and therefore the only telecom company currently equipped to offer the iPhone – offers a starter data plan that provides 1.5 megabytes of data per month for $15 (each additional MB is $21). Since that is not even enough data to download a single high-resolution photograph, most consumers presumably opt for more. The company's biggest data plan provides 500 MB, yet costs $210 per month – far beyond the reach of most consumers.

This pricing, which is comparable to plans found with Bell and Telus, is not close to competitive internationally.

July 23, 2007 — 16 comments — Columns