HERI Committee Report

MAINTAINING A SINGLE SYSTEM

Chapter 14
The Internet

As noted in Chapters 3 and 4, ongoing innovations in communications technology have facilitated a convergence of various communications media (radio, music, newspapers, games, film, etc) on the Internet. This phenomenon has not only precipitated profound changes in the way people, particularly today's youth, communicate and access information, but has empowered citizens worldwide to bypass traditional communications sources to access various forms of content. In response, many countries, including Canada, have in recent years been debating the merits and drawbacks of "Internet regulation."

Internet regulation is a concept that covers a vast range of potential legislative landscape. As Professor Elizabeth Judge has pointed out, "'Internet regulation' is an umbrella term"¹ that may apply to and across a wide variety of different legislative areas. "A statute might regulate Internet actors, such as Internet service providers, Internet infrastructure, Internet content, or the application of traditional rights or causes of actions in the Internet context."² Moreover, the issue of jurisdiction — that is, which level of government has the power to legislate with respect to "Internet issues" — may present some challenges with respect to issues of governance and division of powers:

Jurisdiction inhabits many discussions about Internet regulation. The reason why is that many observers think the Internet is "borderless." Concepts of personal and adjudicative jurisdiction rely on geographical location and physical contacts. Accordingly, it is thought, these concepts cannot easily be applied to cyberspace.³

Despite these preliminary concerns, some aspects of Internet regulation have emerged as relatively uncontested sites of federal jurisdiction. The only mode of communication that is specifically mentioned in the division of powers sections of the Constitution Act, 1867 is "Telegraphs", which is given over to exclusive federal jurisdiction. Over time, court decisions have "extended the reference to telegraphs, so that s. 92(10) now includes telephone, radio, broadcast television and cable television within federal jurisdiction."⁴

The federal government thus has jurisdiction over broadcasting in Canada. As noted in Chapter 2, in 1968 Parliament created the Canadian Radio-television and Telecommunications Commission, an independent public authority with a mandate to regulate and supervise all aspects of the Canadian broadcasting and telecommunications systems. The CRTC has had to respond to the rapid development of new broadcast and communications technologies; the Internet and new media are simply the latest in this evolutionary line.

Chapters 3 and 4 provided some background on the genesis of the Internet as a communications medium and the extent of its adoption by citizens throughout Canada and the world. In short, it was explained that the Internet is, technically, a set of rules for communicating over a computer network and is, in many respects, the electronic equivalent of a post office.⁵

Chapter 13 explained challenges to the existing copyright regime posed by those who wish to retransmit over-the-air radio and television signals via the Internet. As was seen, recent amendments to the Copyright Act have created a "carve out" which denies aspiring Internet broadcast distributors the right to claim a compulsory licence to rebroadcast the signals of over-the-air broadcasters.

This chapter discusses in more general terms some regulatory issues associated with the Internet's potential as a platform for the transmission of programs to audiences. To begin, background material on how existing laws and polices apply to the Internet is presented. Thereafter, a summary of what the Committee heard about Internet regulation is provided.

A. How Do Existing Laws and Policies Apply?

For nearly a decade, questions about the intersection of Internet and regulation have been raised. In a 1995 study of how Canada can best meet the challenges of the "information highway", for example, the Information Highway Advisory Council (the "Advisory Council") addressed many themes later raised during CRTC's 1998 hearings as well as this Committee's study.⁶ These common threads include Canadian content issues and the applicability of existing laws and regulations to the Internet, particularly as they relate to the protection of copyright and intellectual property and the presence of illegal and offensive material on the Internet.⁷

Copyright

The 1995 Advisory Council study reviewed how the development of new technologies — especially digitalization and interactivity — would affect fundamental copyright issues. These new technologies make the illegal reproduction and global republication of copyrighted material far easier than it once was. Thus, the study noted that the potential for "piracy, or unauthorised use and reproduction of protected works and the consequent economic repercussions is a cause for concern for creators and producers."⁸

Noting the need to balance the rights of creators to benefit from the use of their works and the need of users to access and use those works, the Advisory Council recommended that the federal government adopt "principles to help stakeholders address issues raised by increased digitalization."⁹ These principles included:

... encouraging industry, creators and user communities to develop and implement an administrative and regulatory framework that is easily understood and implemented by all interested parties and not seen as a barrier to access or use of content on the Information Highway.¹⁰

Upon review of the right to distribute copyrighted material over the Internet, the Advisory Council found that:

... the right to communicate to the public by telecommunications currently contained in the Copyright Act clearly applies to the electronic transmission of works to the public. There is therefore no need to introduce any new rights, such as an electronic distribution right.¹¹

The Advisory Council further concluded, based upon the evidence it received during its hearings, that:

... the issues presenting the greatest challenge to develop a truly Canadian Information Highway with new Canadian products and services were not legal or policy-related in nature, but administrative and technical. In that regard, the industry believes the enforcement of copyright and the clearance of rights constitute a priority.¹²

The Advisory Council found that the existing legislative and policy framework to be "sufficiently flexible to provide the means of effectively enforcing copyright on the Information Highway and, at the same time, provide users with reasonable access to protected works."¹³ Given this, it was its opinion that the most important role government could play was one of education in working with industry to develop a public education campaign to better inform users and creators on the use of copyright on the Internet.¹⁴

Illegal and Offensive Material

With respect to how best to address the issue of illegal and offensive material on the Internet, the Advisory Council noted that "the rule of law applies with equal force to the Information Highway."¹⁵ This means that material that is prohibited by the Criminal Code — child pornography, obscenity or hate propaganda, for instance — is illegal in Canada regardless of its form of transmission or distribution.

A more difficult question concerns material that is offensive but legal. "Potentially offensive content can include sexually explicit material, graphic violence, or other content that may by considered offensive on social, religious, cultural or moral grounds."¹⁶ Here enforcement issues are complicated by responsibilities that differ by jurisdiction:

In Canada different levels of government have different responsibilities regarding control of content. Besides the enforcement of the Criminal Code and the Canadian Charter of Rights and Freedoms, the role of the federal government in matters related to expression is defined by the Telecommunications Act, the Broadcasting Act and the Canadian Human Rights Act. Provincial governments have film and video review boards that enforce local regulations, including the prohibition of certain content and the enforcement of age restrictions. Municipal governments have by-laws concerning the licensing and zoning of 'adult entertainment'.

In a digital environment, problems of enforcement arise regarding jurisdictional boundaries. ... The right and ability to control information flowing into the home also demands serious consideration.¹⁷

Noting that these jurisdictional issues are further complicated by situations in which material that is considered offensive in one jurisdiction may be considered acceptable in another, the Advisory Council recognised the "need for bilateral and multilateral agreements at the international level, dealing with harmful or illegal communications on global networks."¹⁸

With respect to how best to address offensive but legal content, it was the Advisory Council's view that the federal government should initiate public education programs to raise awareness of the fact that the principle of law applies to computer-mediated communications, and should work with industry stakeholders to develop "a model code of ethics and practices reflecting community standards and to provide for community education programmes."¹⁹

Moreover, the federal government should establish a technical committee to:

... identify technical solutions that will ensure that individuals ... have the ability to select easily the content they want. (For example, passwords help ensure restricted access; user validation and certain payment mechanisms uphold age restrictions; adaptive filters on home personal computers screen out inappropriate violent or sexual content.)²⁰

And to:

... identify technical solutions that will ensure all material distributed via the Internet from Canadian sources can be attributed to a verifiable person and site. ... Availability of this information must be subject to ... expanded privacy guidelines.²¹

These public awareness, education, knowledge, technological solutions and industry self-regulation recommendations are repeated in the Information Highway Advisory Council's study of illegal and offensive Internet content published in the year 2000.²²

The CRTC's New Media Decision

In July 1998, the CRTC called for comments on the "rapidly expanding and increasingly available range of communications services collectively referred to as 'new media'."²³ This request resulted in well over 1000 responses from interested parties across a wide range of issues, including submissions from individuals, groups, industries, multimedia companies and traditional broadcasting enterprises. The submissions received, information gathered and consultations engaged in resulted in the CRTC's much anticipated decision in May 1999 to exempt new media from broadcasting regulation; in other words, to not regulate the Internet.

The diversity of responses received by the CRTC reflected the diversity of communication services included under the term "new media." The products and services new media can refer to include, "but are not limited to, video games, CD-ROMs, electronic mail (e-mail), online paging services, faxing, electronic commerce, IP telephony, and services delivered over the World Wide Web and the Internet."²⁴ As a working definition of the term, the Commission stated that:

New media can be described as encompassing, singly or in combination, and whether interactive or not, services and products that make use of video, audio, graphics and alphanumeric text; and involving, along with other, more traditional means of distribution digital delivery over networks interconnected on a local or global scale.²⁵

In calling for comments and conducting its public consultations on the topic of new media, the Commission wanted to address the issue of whether new media transmissions constituted "broadcasting" within the meaning of the Broadcasting Act, and if so whether they should be regulated.

As defined in section 2(1) of the Broadcasting Act, "broadcasting" means:

... any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place.

The term "program", in turn, as defined by the Act, means:

... sounds or visual images, or a combination of sounds and visual images, that are intended to inform, enlighten or entertain, but does not include visual images, whether or not combined with sounds, that consist predominantly of alphanumeric text.

It is this latter aspect of the definition of "program" that removes much new media content from broadcasting, since so much of the content available on the Internet consists predominantly of alphanumeric text rather than sounds or visual images. This means that Internet content that is alphanumeric text falls outside the scope of the Broadcasting Act and cannot be regulated by the CRTC.²⁶

This left the issue of Internet content which predominately consists of video, audio, still images or some combination of them. First, the Commission observed that while information displayed or posted on the Internet can be considered to be publicly displayed, the Internet "is not in and of itself a 'public place' in the sense intended by the Act. Programs are not transmitted to cyberspace, but through it, and are received in a physical place, e.g. in an office or home."²⁷

Next, to determine if programs are transmitted "for reception by the public" within the meaning of section 2(1) of the Broadcasting Act, the Commission considered it "important to distinguish between the ability to obtain Internet content 'on-demand' — the non-simultaneous characteristic of Internet services — and the ability of the end-user to 'customize', or interact with, the content itself to suit his or her own needs and interests."²⁸ Finding nothing in the Act requiring that transmissions be received by the public on a fixed schedule or simultaneously between various viewers, the Commission held that programs transmitted to the public "on demand" are transmitted "for reception by the public."²⁹

However, this public aspect of reception falls away if the content has been customized by the end-user to such an extent that the end-user has an individual, one-on-one experience through the creation of their own uniquely tailored content. It is the Commission's view that this sort of content would not be considered "reception by the public"³⁰ and thus again be beyond the scope of the Broadcasting Act. It is the degree of customization that is of significance. Where end-users' experience with the program would be similar, if not the same, but for the ability to select different camera angles or points of view of a sporting event, for example, the content would constitute a transmission of the program for reception by the public and thus be "broadcasting".

Section 9(4) of the Broadcasting Act requires the Commission to exempt broadcasting undertakings from the licencing requirements of the Act where the Commission is satisfied that compliance with those requirements will not contribute in a material manner to the implementation of the broadcasting policy set out in subsection 3(1). Having reviewed and considered the various submissions the Commission was of the view that the Canadian new media industry is vibrant, highly competitive and successful without regulation, and "to impose licencing on new media would not contribute in any way to its development or to the benefits that it has brought to Canadian users, consumers and businesses."³¹

Thus in May 1999, the CRTC issued an "exemption order without terms or conditions in respect of all undertakings that are providing broadcasting services over the Internet, in whole or in part, in Canada."³² To summarize the Commission's decision to this point, it held that:

Material transmitted over the Internet that is predominantly alphanumeric text is by definition not broadcasting;

Material transmitted over the Internet that is sufficiently customisable is not broadcasting; and

The remaining content that does fall under the Broadcasting Act is to be exempted from regulation.³³

Canadian Content on the Internet

In conducting its new media hearings, the CRTC was particularly interested in receiving comments on the availability and visibility of Canadian new media content on the Internet, and whether any incentives or regulatory measures were necessary "to prompt existing or new industry participants to develop, produce, promote and distribute Canadian new media content and services."³⁴ The Commission received a range of opinion on the issue of regulation, from those suggesting no regulation at all to direct funding and tax incentives as an alternative to regulation to calls for regulation as the only way to produce, promote and guarantee a Canadian presence on the Internet.

The CRTC determined that a strong Canadian presence already exists on the Internet, as evidenced by the "impressive number" of Canadian web sites already in existence, key partnerships between Internet service providers and content developers to generate Canadian content, the expansion of many traditional Canadian businesses to the Internet, and the availability of Internet search tools that make it easier to locate Canadian content.³⁵ Indeed, the Commission expressly addressed the amount of Canadian content on the Internet:

Participants provided statistics indicating that Canadian web sites represent about 5% of all Internet web sites. The availability of a number of Canadian search engines provides relatively easy access to Canadian new media content. French-language content represents about 5% of total Internet content.³⁶

Given this, the Commission stated that:

... there is a significant amount of Canadian new media content and services available on the Internet today and ample business and market incentives for its continued production and distribution. In fact, many parties submitted that regulation would serve to hinder, not help, the production and distribution of Canadian new media content. Therefore, there is no policy rationale for the Commission to impose regulatory measures to stimulate the production and distribution of Canadian content.³⁷

Further finding that there was no convincing evidence to suggest that visibility of Canadian content was a problem on the Internet, the Commission decided that there was no compelling policy rational for regulatory measures to support access to Canadian content on the Internet.³⁸

Offensive and Illegal Content on the Internet

The issue of how best to deal with illegal, offensive and objectionable Internet content also attracted a great deal of commentary and opinion. Some participants noted that offensive and objectionable material can be easily accessed and disseminated via the Internet and that the Commission should regulate this type of content.³⁹ Other participants also felt CRTC or some other industry or agency regulation for illegal content should be in place as an alternative to the criminal justice system's lengthy and arduous process under existing Criminal Code provisions.⁴⁰ For example, one suggestion was to give additional powers to the Canadian Human Rights Commission to address the dissemination of hate propaganda over the Internet.

Other participants felt that the best way to approach offensive and objectionable Internet content would be through industry self-regulation and the development of stronger industry codes of conduct. It was suggested that these could be cooperative efforts between a variety of different partners in both the public and private sectors. It was also observed that content filtering software, designed to control access to or availability of objectionable content, is also a useful screening device.

As for illegal content on the Internet, it was the opinion of the majority of participants that existing Canadian laws of general application, along with self-regulatory initiatives, are a more appropriate means of dealing with this type of content than regulation under the Broadcasting Act. The wilful promotion of hatred, for example, is an offence under the Criminal Code.⁴¹ Moreover, hate propaganda consists predominantly of alphanumeric text, and alphanumeric text is by definition not broadcasting within the meaning of the Broadcasting Act and thus is beyond the regulatory reach of the CRTC.

Child pornography and material that is obscene is illegal regardless of the mode of transmission, and Internet obscenity would be caught by the Criminal Code proscriptions dealing with making, publishing, distributing or circulating this material.⁴² The Commission was of the opinion that the criminal law, together with the establishment of complaint lines, industry ombudsmen, international cooperative arrangements and increased education and awareness, are more appropriate means of addressing this and other illegal Internet content.⁴³

B. What the Committee Heard

The findings of the CRTC in its comprehensive study of submissions on new media broadcasting regulation provide a useful point of reference for this Committee's study of the state of broadcasting in Canada. Many witnesses made direct reference to points made in the CRTC Broadcasting Public Notice 1999-84 regarding the proper approach to new media broadcasting.

Submissions to the Committee regarding regulation of the Internet as it relates to broadcasting focused on three issues: Canadian content, the ability of existing law and policies to apply to the Internet, and self-regulation on the part of Internet stakeholders. These issues, which were mostly arguments either in favour or against Internet regulation to encourage the production of Canadian content, will be examined in turn.

Arguments in Support of Regulation

One of the primary purposes of the Broadcasting Act is to maintain and enhance national identity and cultural sovereignty through encouraging the development of Canadian expression and displaying Canadian talent.⁴⁴ Canadian content on the Internet, then, was of significant interest and concern to many who appeared before or submitted written material to the Committee.

Firm support for Internet regulation was articulated by Mr. Jacques Primeau, President, Association québécoise de l'industrie du disque, du spectacle et de la vidéo. In an eloquent statement to the Committee summarising the views and concerns of several pro-regulation parties, he urged that the CRTC decision to not regulate the Internet be revisited. In particular, he voiced concern about the ability to enhance and promote Canadian content in light of new technological developments in an increasingly global world. He stated:

... one of the most useful things the [C]ommittee could do would be to concentrate on finding ways of regulating Internet broadcasting. ... the decision not to regulate the Internet, which was taken by the CRTC in 1999, must be reviewed at all costs in light of new technological developments. ...

Of course, to regulate the Internet, we will have to come up with measures that are different from those attempted in the past. We will have to be creative to ensure that Internet regulations meet two requirements: firstly, those who distribute Internet services must be on the same footing as those who distribute cable television, satellite or other means. ...

Secondly, we should not simply punish but rather encourage initiatives by Canadian companies to promote Canadian talent on the Internet. I think that we should develop regulations to this effect.⁴⁵

Mr. Jean-Pierre Lefebvre, President, Association des réalisateurs et des réalisatrices du Québec, also expressed a general need for Internet regulation in light of the overall objectives of the Canadian broadcasting policies:

Canadian content is the raison d'être, the ultimate goal of our system. Legislation, policy, regulations, governor in council orders, monitoring activity and CRTC regulations all have the same objective: to ensure that all Canadian citizens have access to homegrown programming which reflects their reality, their values and their view of the world.

We must never lose sight of this objective. Under the current review process it is important that everything be done to conserve and strengthen the measures which support the creation, funding, presentation and promotion of top-quality Canadian programming which meets the many needs of all Canadians.

In this expanding universe, we must be resolutely proactive and determined to find our place. Extraordinary efforts must be made and we must work together to ensure that Canadian content remains available everywhere: on radio, conventional television, the Internet and on pay TV, as well as pay audio services and video on demand. ⁴⁶

Some witnesses were less certain that regulation to ensure Canadian content was the best way forward, but expressed a desire to revisit the CRTC's decision to leave the Internet unregulated. For example, Ms. Megan Williams, the National Director of the Canadian Conference of the Arts, told the Committee:

We think the CRTC was premature in its decision to back away from its study of the Internet. We think it should keep a watching brief on how things are developing there and ensure that there is plenty of Canadian content on the Internet. We're not suggesting that the CRTC can regulate the Internet, but we think we can find ways to ensure that Canadian content is always there in both official languages.⁴⁷

This view was echoed by Mr. Richard Paradis, President, Canadian Association of Film Distributors and Exporters, who suggested seeking public input on the idea of regulating the Internet. He further said that moves toward such regulation were only a matter of time given the global reach, international interconnectivity and financial importance of the Internet. For this reason:

In the same way that the minister asked Canadians to put forward their views on what Canadian content should be, and what the definition of Canadian content should be in this new environment, we're all going to participate in the exercise. I think the government or minister could actually ask questions of the Canadian public. Do you think we should be regulating the Internet? What are your ideas on it? You could get some creativity and probably some good ideas.⁴⁸

With respect to the challenges of regulating such a rapidly changing and global technology as the Internet, witnesses acknowledged the difficulty of such an undertaking but suggested that regulation could be and must be achieved. For example, Mr. Jacques Primeau, President, Association québécoise de l'industrie du disque, du spectacle et de la vidéo, said:

The Canadian government not only can, but must, regulate broadcasting activities on the Internet. At stake is the sound financial health of the companies in the system, the protection and fair treatment of rights holders, such as providing Canadians with the same access to varied, quality and interesting Canadian cultural content.⁴⁹

Mr. Peter Sandmark, National Director, Independent Film and Video Alliance, expressed support for Internet regulation to ensure Canadian content:

The Independent Film and Video Alliance recommends that the standing committee strengthen the obligation for broadcasters to program works by Canadian independent film and video creators and the works of Canadian independent new media artists on the broadcasters' Internet sites.⁵⁰

Issues related to Canadian content were not the only matters raised by witnesses favouring Internet regulation. Other suggestions included strengthening existing regulations or legislation to better protect copyright. For example, Ms. Anne-Marie DesRoches, Public Affairs Director, Union des artistes, had this to say to the Committee about the potential regulation of the Internet with regard to Internet service providers :

In terms of regulation, ... we really must examine the area of co-regulation, regulation through contracts and the possibility of reaching a consensus, instead of always pointing the finger at someone else and not accepting responsibility ourselves. I think we must, as a society, take ourselves in hand and make every stakeholder responsible in terms of regulating the Internet.⁵¹

Another witness viewed the regulation of the Internet — at least insofar as the protection of copyright interests — as simply the necessary next step in the evolution of the technology. Ms. Francine Bertrand Venne, Director General, Société professionnelle des auteurs et des compositeurs du Québec, stated:

I simply wanted to give you a few examples where government, regulation and legislation could serve as models. I'm thinking of cable companies, which for many years claimed they were simply carriers, like those who provide access to the Internet. But in time, given the fact that people were claiming copyrights, it was shown that they were copyright users and the cable companies and specialized stations were made to pay. We should take that situation as an example for the Internet and perhaps build certain bridges.⁵²

Arguments Against Regulation

On the other hand, numerous witnesses appeared before the Committee to suggest that Internet regulation was not necessary. Ms. Susan Peacock, Vice-President, Canadian Motion Pictures Distributors Association, for example, said:

Current broadcasting policy, insofar as it applies to the more conventional or traditional technologies, was based on spectrum scarcity and the high cost of producing and distributing content with mass appeal ... Whatever the basis for, or the evaluation of, broadcast regulations, many of the concerns that gave rise to them are no longer true. Some of these concerns will be alleviated by new technology, including the availability of [unlimited] shelf space ...⁵³

Witnesses also stated that Canadian content could be and is being enhanced and promoted online in the absence of any regulations. Moreover, many witnesses advised the Committee that existing laws were adequate to address illegal and offensive Internet content issues.

A strong statement against Internet regulation came from Mr. Jay Thompson, President, Canadian Association of Internet Providers, who had this to say to the Committee about the interrelationship between Canadian broadcasting policy and the Internet:

Mr. Chairman, the CRTC got it right in May 1999 when it decided not to try to impose broadcasting-style regulations on ISPs or Internet content providers. While some — even a growing amount — of Internet content might arguably fall within the definition of "programming" in the [A]ct, even if it were practically possible to apply Canadian content or other similar broadcasting rules to that content — which it isn't — there is no need to do so to meet the objectives of the Broadcasting Act. There is plenty of Canadian content of all kinds on the Internet. It's easily accessible and can be created and distributed by anyone with access to a computer and the Internet.

Canada's broadcasting policy as set out in subsection 3(1) of the Broadcasting Act remains relevant and appropriate. The regulatory policy in subsection 5(2) already grants the CRTC the flexibility to adapt to scientific and technological change, and subsection 9(4) gives the commission the power to exempt from licensing or regulating where it's not necessary to do so to implement Canada's broadcasting policy. For every challenge the Internet poses to broadcasters and the Canadian broadcasting system there is a corresponding opportunity, which Canada's broadcasting community is increasingly exploiting, to their benefit and to the benefit of Canadian consumers.⁵⁴

Several witnesses specifically addressed the issue of Canadian content on the Internet. Testimony indicated that Canadian content can be enhanced and promoted and will flourish in the absence of regulatory intervention. One witness told the Committee that providing Canadians with Canadian Internet content simply makes good business sense and that regulation is thus unnecessary:

It's really a matter ... of looking at what consumers want ... Suffice it to say that Canadians certainly want Canadian content on their Internet service. We weren't obliged to provide it; we provide it because it makes good business sense.⁵⁵

This view was reiterated by Mr. Jay Thompson, who said that:

As for the content that does exist on the Internet, if you wanted any kind of Canadian content, you could access it. Information about municipalities, about museums, about cultural organizations, cultural activities — it's accessible. I'm being rather long-winded here on that particular piece of the question, but I would suggest that there's sufficient access to Canadian cultural content on the Internet already that we don't need to worry about regulating it to stimulate more or restrict access to other kind of content.⁵⁶

The Committee heard that it is audience demand and market response that keeps Canadian content flourishing on the Internet in the absence of regulations:

I think the clear conclusion is that increased investment in the broadcasting system by non-Canadians will strengthen, rather than harm, cultural industries and the broadcasting system itself. Remember, we weren't required to do this by any licensing condition or regulatory body; we did it because it made good business sense and that's what our Canadian consumers wanted.

So I think the conclusion that Canadian content can flourish in a free market is confirmed by the current state of the Internet more generally. In the absence of Canadian ownership or content regulations, Canadian content is continuing to flourish, and Canadian content creators are continuing to thrive on the Internet.

It was that conclusion that was the driving force behind the CRTC's 1999 decision to exempt new media Internet broadcasting from regulation under the Broadcasting Act. I think the conclusion is equally valid today. In the market-driven online world, our members demonstrate a clear preference for Internet content that is truly Canadian, overwhelmingly choosing Canadian over non-Canadian sources of news, sports, and financial information.

I think it's important as well to recognize that the Internet makes Canadian content accessible to Internet users around the world.⁵⁷

A variation of this view that Internet regulation is unnecessary from a business stance came from Mr. Richard Ward, Executive Director, Community Media Education Society. He stated that:

Adapting to the Internet may be less of a shock for us than our grandparents experienced with the arrival of radio. The inventors of radio and television expected them to be used for education and public information, but today they are businesses first and foremost. The same is true of the Internet. Government doesn't need to regulate the Internet as long as government is willing to regulate business.

Arguably, digital television is the same as Internet access. It's easy for digital television to interact with the Internet. If television is regulated, the Internet need not be. There might be a presumption that programmers flee regulation, but in many cases the opposite is true, particularly when independent producers face established businesses so massive as to remove any likelihood of successful competition.⁵⁸

In response to concerns about the lack of government regulation and the difficulties this could create, one witness spoke to industry self-regulation measures already in place:

We at our association, the Canadian Association of Internet Providers, introduced a code of conduct for our members back in 1996. We're in fact one of the first Internet associations in the world to introduce such a code of conduct. Amongst other things, that code provides that our members will not knowingly host any illegal content. Once we're advised by proper authorities that any content that is on our servers is contrary to Canadian law, we will remove that content.

Now, with respect to content that is not illegal, we're not in the position of regulating our users' tastes. Notwithstanding that some of the material, indeed a lot of the material, on the Internet can be offensive — even highly offensive — to many people, if it's not illegal, it's not illegal.⁵⁹

Following the same path as the recommendations of both the 1995 and 2000 studies by the Information Highway Advisory Council and the 1999 CRTC decision not to regulate the Internet (discussed above), witnesses to the Committee expressed the view that existing Canadian legislation was sufficient to deal with illegal online content. Here, for example, Mr. Jay Thompson stated simply that:

Canadian laws that apply off-line apply equally online. Anything that is illegal in the off-line world will be illegal if it's transmitted or carried out in the online world. We at our organization were very supportive of Bill C-15A and introducing clarification that child pornography on the Internet is a crime. The laws apply to the Internet, and they can be applied in a way that will affect the availability of that kind of content.⁶⁰

Similarly, it was suggested that strengthening and enhancing existing law to deal with online copyright issues, as opposed to passing Internet-specific legislation, would be sufficient to protect rights-holders:

Changes to the Copyright Act might be able to clarify who is liable and under what circumstances, with respect to transmissions on the Internet. Nevertheless, the outstanding issue is how to enforce and protect those rights. In order to do that, we need to turn back to the industry itself and technology. The industry creators, producers and broadcasters recognize they need to have a way to control the distribution of their products. They're introducing new technologies to add what are called digital watermarks on their programs — other means of restricting either access or download capability. But these are all being addressed by the industries themselves, through technology. So I don't see it as a problem. It's a challenge, but I think the programming and broadcasting industry is up to that challenge.⁶¹

This view was reinforced by witnesses appearing before the Committee to discuss the relationship between copyright issues and Internet retransmission — that is, the retransmission of television broadcasts over the Internet. Indeed, as already noted in Chapter 11, most witness concerns raised with respect to Internet retransmission and copyright focussed on the ease with which copyrighted material could be distributed worldwide over the Internet without the appropriate royalties being paid.⁶² This is why some witnesses so forcefully resisted any extension of the compulsory licence to Internet retransmitters.

As noted earlier on, the issue of Internet retransmission is now moot given that Parliament amended the Copyright Act in 2002 to create an "Internet carve-out", specifically excluding Internet broadcasters from eligibility for the necessary compulsory licence to legally broadcast programming material over the Internet. That said, in July 2002 the CRTC launched a review of this particular issue, with a call for comments concerning Internet retransmission, seeking public input on "the appropriateness of amending the Exemption Order for New Media Broadcasting Undertakings ... regarding persons who retransmit by the Internet, the signals of over-the-air television or radio programming."⁶³

In its report to the Governor General in Council in January 2003, the CRTC restated its position that "it does not consider it necessary or appropriate to require the licencing of internet retransmitters."⁶⁴

C. Conclusion

The Committee is of the view that broadcasting in whatever format and however carried falls within the jurisdiction of the Broadcasting Act and under the regulatory purview of the CRTC. Thus, broadcasting by new media services is unquestionably within the purview of both the Broadcasting Act and the CRTC.

The Committee is fully aware that new media services, a format which includes but is not limited to the Internet, are and will continue to be increasingly significant aspects of the digital and technological revolution as it affects broadcasting. The Committee is also aware that the 1999 CRTC decision to not regulate new media activities on the Internet under the Broadcasting Act is in need of further examination in light of ongoing innovations and advances in technology.

It is the CRTC's current practice, however, to review its own exemption orders approximately every five years.⁶⁵ This means that the 1999 new media exemption order will be before the CRTC for a complete review in 2004. Given this, the Committee believes that any recommendations made now with respect to new media broadcasting would be premature in light of the planned and specific review in one year's time.

Endnotes