Media Centre > News Releases > Archive > 1996 > June 12, 1996

Broadcasters raise competitiveness concerns about copyright bill

OTTAWA, June 12, 1996 - The Canadian Association of Broadcasters (CAB) today urged the Standing Committee on Canadian Heritage to ensure the new copyright reform bill equips broadcasters, as a pivotal component of Canada's cultural industry, to compete effectively in the North American market.

"As it stands, the legislation isn't likely to achieve the government's goals of stimulating the economy or fostering a dynamic cultural industry," said CAB President Michael McCabe, as Bill C-32 received second reading in the House of Commons. "It imposes obligations on stations that our U.S. competitors don't bear and denies us many things that they enjoy."

Among other things, the Bill doesn't deliver on a long-promised ephemeral right, or other rights. It imposes neighbouring rights from which American radio stations have been exempted.

While the $1.25 million neighbouring rights exemption and phase in period are major steps in the right direction, CAB believes value of airplay already more than compensates performers and producers for the use of music.

Crafters of the bill used a European model that isn't appropriate for North America, stressed McCabe.

"They took all the European measures the U.S. has not adopted that hurt broadcasters. They denied all the U.S. measures that help broadcasters. Then they introduced the one U.S. measure that, in the absence of U.S. protection, allows copyright owners to go after recalcitrant users. This means that some things broadcasters need to do to carry out their everyday operations will give rise to many costly infringement claims. Most importantly, the bill attempts to charge radio stations twice for the use of music."

Broadcasting is a key cornerstone of Canada's cultural industries. "Hurt it, and everything else suffers, including the music and production sectors."

Despite carrying heavy regulatory and Canadian content obligations, Canadian stations compete effectively against the Americans in the world's most vigorous entertainment market. But it doesn't take much to tip the balance, cautioned McCabe.

Although U.S. border radio stations reach 90% of Canada, they attract only 5% of the audience. "We hold the lion's share with strong local programming and community involvement. Lose that local content and we lose the edge. This bill could do that."

In television, U.S. networks, specialty services and superstations reach 80% of Canadian homes through cable, and soon DTH. FOX alone captures $35 million a year in Canadian advertising revenues.

CAB estimates that if the new copyright bill results in a 1% loss of viewers and listeners, this would translate into a direct $30 million revenue drop, with a consequential $60 million loss in Canadian record sales, programming expenditures and other downstream effects.

"We fear Bill C-32 will have that impact," stressed McCabe. "It needs major changes to truly strengthen our cultural industries and keep Canada competitive. At the least, it should exempt local radio from neighbouring rights and grant broadcasters the rights they need to compete."

Private broadcasters are a critical part of Canada's cultural industry. They contribute more than $3 billion to the GDP and employ 50,000 Canadians. Private television captures 52% of all viewing and 57% of all viewing of Canadian programming.

CAB represents the vast majority of Canada's local serving, advertising-supported radio and television stations.

Susan Tolusso
Director, Communications
(613) 233-4035 ext. 331
(stolusso@cab-acr.ca)

APPENDIX I 
June 12, 1996

Bill C-32 isn't likely to achieve the government's intentions of strengthening Canada's cultural industries, because it either:

- imposes obligations that our U.S. competitors don't bear; or - denies rights that our U.S. competitors do have.

... and then the clincher

The Canadian Association of Broadcasters 
306-350 Sparks, Ottawa, Ontario, K1R 7S8; tel.: (613) 233-4035; fax (613) 233-6961

NEIGHBOURING RIGHTS IN SOUND RECORDINGS: These new rights would entitle performers and record companies to be paid by parties that play their sound recordings in public. Bill C-32 would subject radio to this new payment despite the fact that it already pays for music by providing free airplay, which helps to sell records, and providing Canadian content to showcase Canadian performers.

The United States has a neighbouring rights regime (called "performance rights") which fully exempts radio given the value radio already provides to the music industry. Canadian radio should likewise be fully exempt.

EPHEMERAL RIGHT & TRANSFER OF MEDIUM EXCEPTION: An ephemeral right is a common right, in place in at least 19 other countries, including the U.S. and UK. It allows broadcasters to make copies of works which they have already licensed for broadcast for later broadcast. Without it, a broadcaster could not, for example, show instant replays of live figure skating containing music or make copies of a program for subsequent broadcast in different time zones without exposing itself to liability.

A transfer of medium exception, which exists in many other countries and in the U.S. as part of its "fair use" regime, would allow broadcasters to transfer a program or song from one medium to another for strictly technical purposes -- for example, transferring the music from CDs given to radio stations by record companies onto the station's computer hard drive. Without this exception, broadcasters will be exposed to liability.

NEWS & COMMENTARY PRODUCED BY BROADCASTERS: Bill C-32 permits off-air copying for certain educational purposes. The CAB has said it would not oppose this as long as these "educational exceptions" treat all programming equally -- and do not just apply to news and commentary. The U.S. treats all programming equally.

Bill C-32 ignores this position and permits much broader educational use of news and commentary than other types of programming. Broadcasters continue to believe that any exception must treat all programming equally, recognizing that other programming can also have educational uses.

SIGNAL RIGHT FOR BROADCASTERS: Broadcasters need a right to control the use of their signals (the product of their programming and packaging expertise) by satellite providers, cable, telcos and other retransmitters. Without a broad signal right, a satellite service could, for example, take a Canadian signal off-air and rebroadcast it without authorization as part of a Canadian grey market satellite package -- thus enhancing the marketability of such an illegal service in Canada.

U.S. broadcasters receive a broad "signal right" under their "retransmission consent" regime. Bill C-32 provides only a very narrow signal right which is virtually worthless. It prevents only unauthorized retransmissions of their works by other broadcasters -- something which rarely, if ever, happens. Canadian broadcasters need a broad signal right.

STATUTORY DAMAGES & INJUNCTIVE RELIEF: Despite denying all the U.S. measures that help broadcasters, Bill C-32 introduces tough U.S.-style penalties, such as statutory fines and far-reaching injunctions.

In the U.S., these broad remedies are the one area where copyright law is clearly pro-creator. Bill C-32, however, ignores the fact that the U.S. balances these provisions with reasonable exceptions (e.g. an ephemeral right and fair use provisions which allow transfer of medium) to ensure that users aren't exposed to excessive owner claims. This must be rectified.