"TURN IT DOWN!" - The CRTC publishes final regulations requiring Canadian broadcasters and distributors to control the loudness of TV commercials by September 1, 2012.

In response to a steady increase in the number of complaints from Canadians over loud ads, the regulator of broadcast television in Canada, the Canadian Radio-television and Telecommunications Commission (“CRTC”), on September 13, 2011, announced that broadcasters must control the loudness of TV commercials by September 1, 2012. A CRTC news release included the following statement from then Chairman Konrad von Finckenstein:

Broadcasters have allowed ear-splitting ads to disturb viewers and have left us little choice but to set out clear rules that will put an end to excessively loud ads. The technology exists, let’s use it.''

Just a few short months later in December, 2011, the CRTC published draft regulations for comment requiring Canadian broadcasters to ensure that both programs and ads are transmitted at the same volume. This means viewers will no longer have to reach for the remote when programming switches to commercial messaging. The regulations require Canadian broadcasters and distributers, who are also responsible for maintaining the volume of programs, to adhere to the technical requirements set forth in ATCS Recommended Practice A/85: Techniques for Establishing and Maintaining Audio Loudness for Digital Television, which provides standards for measuring and controlling television signals in order to manage audio fluctuations between programming and commercials. The Recommended Practice is published by the Advanced Television Systems Committee, the internationally recognized body that sets technical standards for digital television.

The final regulations were published by the CRTC on May 8, 2012, and come into force on September 1, 2012. In a May 8 CRTC press release Leonard Katz, Acting Chairman of the CRTC, confirmed that these regulations “bring us a step closer to our goal of eliminating loud TV ads” and “provide relief to viewers.”

Amendments implementing the above requirements were made to the Television Broadcasting Regulations, 1987, the Specialty Services Regulations, 1990, and the Broadcasting Distribution Regulations.  

The amendments will not necessarily affect the ability or desire of viewers to fast forward through commercials altogether. However, as of September 1, 2012, the date when broadcasters will need to ensure commercials are received at an even volume in relation to their programming counterparts, Canadians may find they no longer need to reach for the remote in between breaks in programming to control unmanageable fluctuations in television loudness.

 

What's The Deal?

From Canada and the US to China and France, industry wide activity has been stretching globally.

  • AMC Entertainment, one of the largest theatre chains in North America, is in talks to sell the company to Wanda Group, owner of one of the largest theatre chains in China (Click here for more details). If this deal happens, we will see exhibitors in two of the largest film countries join forces. China has been very active in capitalizing on the lucrative American film scene, while also trying to expand exposure and distribution of Chinese films. It has been rumoured that AMC may be more attractive to Wanda without its Canadian theatre assets. The obvious player in such a transaction would be Cineplex, while Empire always remains a possible contender.
  • In other Chinese film news, Bona, a Chinese distributor, is increasing 3D production as it attempts to benefit from strong box office totals and the strong growth in the 3D film market. This news comes shortly after RealD 3D announces that it has surpassed the 20,000 3D movie screen mark worldwide, and still counting.
  • ABC just renewed for additional seasons of a few of its hit television shows, including “Grey’s Anatomy”, “Once Upon a Time” and “Modern Family”. Renewals for other shows are still in the works.

And, with Festival de Cannes 2012 less than a week away, come back soon for an update on the busy buyers and sellers!

Jim Russell Rocks the Cover of Lexpert

Jim Russell, a partner in the  Entertainment Law Group in the Heenan Blaikie Toronto office (and all-around awesome guy), is featured in the cover story of the April 2012 edition of Lexpert magazine. In the piece titled "Advising for the Digital Revolution", Jim discusses how the growth of digital media has changed the practice of law and considers the challenges facing content owners.

(Photo by Don Dixon, Cover image © Thomson Reuters Canada Limited)

As JIm notes in the article, “From the perspective of content producers, the challenge is to find the dividing line between granting away rights that broadcasters want and holding back the rights that allow producers to benefit from secondary and tertiary revenue sources that new distribution models and technologies might afford.”   Also making an appearance in the article (but not on the cover) is partner (and also all-around awesome guy) Simon Chester.

The full article can be accessed at the Lexpert website.

OBA EM&C Luminary Lunch: Richard Stursberg and The Tower of Babble

The Ontario Bar Association's Entertainment, Media and Communications Law Section is hosting its 2012 Luminary Lunch on Wednesday, May 2.  The featured speaker will be Richard Stursberg, who will be discussing his new book The Tower of Babble: Sins, Secrets and Successes Inside the CBC.  The ticket price includes lunch and a copy of the book.  Further details and registration information for the event is available here.

The CRTC stands down on OTT programming services

In a brief half-page letter issued on April 16, 2012, the CRTC has concluded that it will not conduct a second fact-finding exercise on the impact of over-the-top (OTT) programming services (e.g. Netflix) on the Canadian broadcasting system. This is a change of course for the CRTC: in its 2011 report on fact-finding exercise on the OTT services, the CRTC had decided to conduct a second fact-finding exercise in May 2012.  However, as the CRTC explains in its latest determination, it has now conducted further “stakeholder consultations” and trend analysis of OTT programming services and their impact on the Canadian broadcasting system. Based on this data, the CRTC has altered its views, finding that OTT programming services “have not had an impact [on the broadcasting system] sufficient to warrant another fact-finding exercise at this time”. Of course, the Commission will continue to “closely monitor over-the-top services in the context of the evolving Canadian communications OTT services”. Standby!

Turn up the Heat: Ontario wades in on wireless "bill shock" legislation

 Last week's post outlined recent CRTC action to potentially oversee the establishment of a national consumer code for wireless services. The CRTC's proposal was supported by several wireless carriers, who are intent on avoiding a "patchwork quilt" of provincial strictures in this area. Now, the Ontario Government has turned up the heat, introducing legislation on April 12, 2012 to oversee aspects of wireless service provide contracts with consumers. Among the objectives of the Wireless Services Agreements Act, 2012 is to "make it easier to understand the costs and terms of wireless services agreements" through greater disclosure and clarity in contracts for wireless services. The legislation would allow consumers to cancel agreements at any time; require the express consent of the consumer to renew, extend or amend a contract; and introduce all-inclusive price advertising for service plans. The Bill also provides for a cap on the cost of canceling a contract and a maximum fee for walking away from fixed-term contracts.  The Government's press release can be found here. Media coverage here 

What's The Deal?

After a short break to make some deals of our own – What’s The Deal is back!

  • miptv wrapped up last week in Cannes, so here is a quick recap of some noteworthy television deals:
    • Charlie Sheen’s new show “Anger Management” adds Sweden, Norway and Denmark to its growing list of audiences as Lionsgate sold the rights to Modern Times Group. Lionsgate has already sold the U.S., Canada, Latin America and Germany rights.
    • UK’s BSkyB acquired 3D rights to a few A&E Network titles, including “Titanic: 100 Years in 3D”
    • Local Toronto animation studio 9 Story Entertainment sold several of its children’s programming titles, including “Camp Lake Bottom”, “Daniel Tiger’s Neighbourhood” and “Numb Chuks” to Luk International for Spain and Portugal.
    • AB Groupe in France has picked up “Lilyhammer”, starring Steven Van Zandt as a New York mobster who moves to a small town in Norway through the witness protection program. The show has already aired on Netflix in North America with great success.

 

 

  • Aframe, a cloud video production/software as a service platform (the Salesforce/ Dropbox of video production) from the UK, is setting up shop in North America very soon thanks to a $7 million venture capital investment from Octopus Investments, Eden Ventures and Northstar Ventures. They will operate on both the east and west coast with current clients including BBC and MTV.

The CRTC seeks public input on whether it should enforce a national consumer code for wireless services

The CRTC launched a new proceeding on April 4, 2012 to consider whether it should intervene in the retail wireless (i.e. mobile phone) market by overseeing the establishment of a national consumer code for wireless services. 

The proceeding is in response to applications filed in 2011 by consumer groups seeking CRTC prohibition of certain billing practices by the wireless carriers. Even the wireless carriers are seeking CRTC action: in March of 2012, Rogers applied to the CRTC to request that the Commission establish an internal working group process to develop and implement a national wireless services consumer code. The application by Rogers should be seen as pre-emptive in nature: the national wireless carriers have been displeased with developments in recent years in which several provinces have either passed or introduced amendments to their consumer protection acts that directly or indirectly have an impact on wireless services. Quebec’s Bill 60 is now in force, Manitoba recently passed Bill 35 and Ontario has introduced Bill 5. The provincial bills address “hot button” issues such as cancellation fees, consumer agreements, carrier changes and other aspects of the wireless service. 

Rogers has proactively urged the CRTC to “occupy the field” by implementing a national code, to avoid what Rogers has described as “a patchwork quilt of different rules and regulations…[that] will not only complicate wireless agreements but will also …result in higher operating costs which will ultimately be passed onto the customer”. According to Rogers, a federal code would govern all wireless service arrangements in each and every province, eliminating the need for individual provincial rules and producing a “win-win” for both consumer and carriers: consumers will be protected by a single, easy to understand set of regulations allowing them to fully understand their rights and privileges, while wireless carriers can modify their procedures to ensure compliance with a single regulatory regime.

Rogers has received support for its uniform national approach to consumer standards from the Canadian Wireless Telecommunications Association (CWTA). This approach has also been supported by Telus although on a more conditional basis: in Telus’ view, Rogers’ proposals for a national code does not cover a sufficiently broad range of “transparency-oriented issues”. Hence, Telus urged the CRTC first conduct a more open process through a public consultation with participation by consumers, governments, carriers and other stakeholders. 

So it appears the regulatory winds are blowing toward some form of CRTC-oversight of a national wireless services code. One might think that the next step is straightforward: the CRTC should move ahead and get public input on a national wireless service code. Well, dear reader, it's not that simple, as evidenced by the rather inscrutable title of the CRTC’s Notice of Consultation: “Proceeding to consider whether the conditions in the Canadian wireless market have changed sufficiently to warrant Commission intervention with respect to retail wireless services”. The CRTC is asking this threshold question because it currently views its own jurisdiction over wireless carriers as somewhat constrained by its previous determinations to “forbear” from regulating retail mobile services. In the mid-1990s, the Commission determined that it would forbear from further regulation of the Canadian wireless industry and would allow market forces to guide the industry’s growth. The rationale for those determinations was the Commission’s finding at the time that there were sufficient levels of competition in the Canadian wireless industry. Accordingly, pursuant to a series of policy rulings in the late 1990s (here and here), the CRTC “refrained from exercising” its statutory powers to regulate retail wireless services, pursuant to its “forbearance” power under section 34 of the Telecommunications Act. Moreover, the 2006 Federal Government’s Policy Direction requires, among other things, that “the Commission rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives set out in the Act and that where the Commission has to regulate, it does so “in a manner that interferes with market forces to the minimum extent necessary to meet these policy objectives”. 

Given this history of “light regulation” (or lack thereof) of the retail wireless service sector, the CRTC expressed its view in this proceeding that: “before it can consider what form of intervention, if any, may be appropriate with respect to [a code for] retail wireless services, it must first determine whether there is evidence that Commission intervention in this matter is necessary and appropriate in light of the Commission’s forbearance from regulation of the wireless industry and the Policy Direction”. In other words, the CRTC is first seeking evidence from the public on whether the conditions that it identified more than fifteen years ago as the rationale for forbearance have now changed “sufficiently” to warrant Commission intervention in the development of a national retail wireless services consumer code. 

Those who wish to participate in the CRTC proceeding must submit comments on or before May 3, 2012. 

Sounds Like a Revolution - Trade-marking Sounds in Canada

On March 28, 2012, the Canadian Intellectual Property Office (CIPO) announced that it is now accepting applications for "sound marks".  As Lorraine Fleck points out in a guest post at the IPKat blog, the genesis of this change in Canadian trade-mark policy stems from an application by Metro-Goldwyn-Mayer (otherwise known as MGM) for a trade-mark for its "roaring lion" sound, which film fans will recognize from the opening credits of MGM films (the application can be seen here - give MGM props for perseverance: they first filed the application in 1992).

CIPO's announcement stipulates that applications for sound marks must include the following elements:

  1. state that the application is for the registration of a sound mark;
  2. contain a drawing that graphically represents the sound;
  3. contain a description of the sound; and
  4. contain an electronic recording of the sound.

The graphic representation of the sound will almost inevitably be a "spectrogram" and the "electronic recording of the sound" must be "in MP3 or WAVE format, limited to 5 megabytes in size, and recorded on a CD or DVD".

The change brings Canada into line with trade-marks practice in other jurisdictions such as the United States, Australia and the EU.  What sorts of sounds have been registered as marks in the US?  Helpfully, the US Patent and Trademark Office hosts a "Kids' Pages" directory which contains links to multiple registered sound marks.  Among them:

The change has a number of interesting implications for Canadian entertainment lawyers.  As Jeanette Lee points out, once registrations for sound marks start being issued, another element will be added to errors and omissions (E&O) clearance reviews: people who incorporate pre-existing works into their own works will need to be cognizant that a sound they are incorporating might be protected as a registered trade-mark.

There will certainly be an expansion in the number of "things" which can be trade-marked, which may make lawyers and trade-mark agents salivate at the thought of additional filings, though proposed sound marks will still need to meet the usual thresholds for trade-mark registration of not being functional and/or clearly descriptive or deceptively misdescriptive.  When it comes to "entertainment products", however, policy issues are raised where there is an overlap between a copyrighted work and a proposed sound mark.  (As an example, in the US, the composition "Sweet Georgia Brown" is a registered mark of the Harlem Globetrotters in connection with "entertainment services in the nature of basketball exhibitions".)  Canadian courts have expressed some reservations about using trade-marks to extend intellectual property protection over copyrighted works (see Drolet v. Stiftung Gralsbotschaft, 2009 FC 17), since the time-limited quasi-monopoly provided by copyright could be skirted by the possibly-perpetual protection afforded by trade-mark registration.  As Ivy Tsui speculated at IPilogue (The “Unconventionality” of Sound Marks), could the "Hockey Night in Canada" theme song be trade-marked, thereby trumping a transfer of copyright?

The immediate effect of the CIPO announcement is to expand the possibility of IP protection for sound-based assets - what will play out in the long-term will be the question of quite where the boundaries should exist between trade-mark and copyright protection for those same assets.

"No Animals Were Harmed": Using Live Animals in Canadian Film and TV Productions

The HBO television series Luck was recently cancelled after three horses died during production.  News reports indicate that the animal deaths were simply bad luck: the producers had engaged the American Humane Association (the organization which authorizes the use of the reknowned "No Animals Were Harmed" certification mark), which oversees the use of animals in US movie productions, and had evidently been following the AHA's guidelines.  A short history and evolution of the AHA's guidelines can be found here, and the AHA also provides access to the full Guidelines for the Safe Use of Animals in Filmed Media.  As Annie Berlin, writing at the Biederman Blog, notes, the Screen Actors' Guild (SAG) requires that any motion picture which engages SAG actors also must engage the AHA.

In Canada, the legal implications and requirements surrounding the use of animals in filmed projects is multi-layered.  At the federal level, we can start with the basic criminal law prohibition of cruelty to animals, found in Sections 444-447 of the Criminal Code.  The Health of Animals Act, and its Regulations (in particular Part XII, which speaks to the transportation of animals), provides additional elements of the basic legal framework.  After that, the issue of animal treatment tends to be addressed by a welter of provincial- and municipal-level laws and voluntary guidelines.  (I should note that any Canadian production which engages SAG talent would be obliged, by virtue of the having to sign SAG's Global Rule One paperwork, to observe the SAG-imposed requirement that the AHA be engaged and their guidelines observed.)  For those wishing to film wildlife on federal land, there may also be Parks Canada guidelines which apply, such as the Mountain National Parks Film and Photography Guidelines.

Provinces in Canada generally have their own legislation addressing prevention of cruelty to animals, usually with attendant regulations setting out the details of animal treatment.  In Ontario, for example, the Ontario Society for the Prevention of Cruelty to Animals Act and its Regulations govern the matter.   Also in Ontario, the Ministry of Labour has issued Guideline No. 40: Animal Handling | Safety Guidelines for the Film and Television Industry in Ontario, which sets out detailed instructions for using animals on set, including number of trainers required to be present, the use of sedation, responsibility and chain of command for the animals, the availability of nets and other safety equipment, etc.  The Guidelines note that the AHA Guidelines are not in force in Canada but, in the absence of equivalent Canadian guidelines, are "generally accepted and observed by" the Ontario Society for the Prevention of Cruelty to Animals.  While the OSPCA does not appear to have any specific guidelines regarding the use of animals in filmed entertainment, the Canadian Federation of Humane Societies has issued a position statement which states that the CFHA "opposes the use of animals in all forms of entertainment or displays which may cause them to suffer", though the statement does not specifically address filmed entertainment, and seems generally aimed more at events such as circuses and rodeos.

In British Columbia, after an on-set incident in 2007 in which a number of dogs died due to an infection, the British Columbia Film Commission has issued its Animals in Film Guidelines,which are a particularly useful source of information since they provide additional legal background on the various federal, provincial and municipal laws and regulations which govern producers working with animals in BC.

Moving down to the municipal level, using the City of Toronto as an example, while the City has Chapter 349 of its Municipal Code, which deals with the treatment of animals within city limits, 349-3(F) exempts from its application "areas of the City in which professionally produced films are being made by film professionals and film production companies, and only temporarily during filming".  Thus, at least in the City of Toronto, producers must look to provincial and federal law, and the contractual obligations they have agreed to by signing guild or union agreements, in order to guide their conduct.  The municipal code in each relevant municipality where filming with animals is occurring should be checked to discern whether there are any applicable provisions (or whether an exemption is available).

Finally, the ACTRA Independent Production Agreement stipulates that performers must be informed in advance of the presence of any animals on set (Article A2006) and that "No Performer shall be required to work with dangerous animals without a qualified handler or trainer being present on the set" (Article A2608(h)).

Canadian producers who wish to make use of animals in their film and TV projects thus have a variety of different legal obligations with which they must contend, ranging from contractual to regulatory to criminal.  Because the precise legal obligations are determined so much by the locale in which they are taking place, sufficient lead-time should be allowed for in order to enable producer's counsel to properly review and assess which legal requirements must be observed.

Saskatchewan Ends Film & TV Tax Credit

The Saskatchewan government has announced that it is eliminating the Saskatchewan Film Employment Tax Credit Program.  From the CBC news report:

Finance Minister Ken Krawetz announced Wednesday that the province can't afford the film employment tax credit and so the program will be wound down.

The subsidy provides a tax credit of up to 55 per cent of the labour costs in film and video productions.

Sitcoms like Corner Gas and TV movies like Prairie Giant: The Tommy Douglas Story, were among the Saskatchewan productions made with the help of the program.

Tax credit incentive programs remain in flux in a variety of jurisdictions: as Saskatchewan winds down its program, many US states are re-assessing the advisability of their existing programs (Despite Budget Crunch, the Great Film Production Incentives Race Continues) and the UK has just announced the creation of a new targeted television tax credit.

UK To Introduce Tax Credits for TV, Video Games and Animation

 

This week, the UK government announced that it plans to offer tax credits to high end television productions, video games and animation.

After a successful campaign by industry stakeholders, the government has acknowledged that it needs to do something to keep the UK competitive with other jurisdictions, particularly in the area of television production which has not been eligible for any incentives - unlike film.  The film tax credit is generally acknowledged as being a success, and the hope is that this can be replicated in the areas of TV, video gaming and animation.  

In the television sector, there was concern expressed by industry players that the lack of an incentive in the UK would mean the loss of productions to neighboring countries that did offer something.

The UK government  is planning to enter into industry consultations to determine how these proposed incentives will work, and it could be 10-12 months before legislation appears.

This announcement is also good news for international partners who wish to co-produce television productions with the UK, particularly Canadians who have a long history co-producing with their British colleagues.  However, since the elimination of the sale-leaseback structures for television in 2002, the level of  Canada-UK television productions has dropped, with the UK slack being taken up by other countries such as Ireland.  

This announcement does provide a glimmer of hope that the future of Canada-UK co-productions may be different than the recent past, and that would be a good thing.

 

 

 

Rush and Rush: Using Music in Political Activities (Redux)

News reports that Rush (the band) have demanded that Rush (the Limbaugh) desist from using the band's music in his radio broadcasts have re-raised an issue we have considered here at the Signal on few different occasions.  The story appears to have been broken by US blogger Bob Cesca (EXCLUSIVE: Rush Pulls Music from Limbaugh Show) and Cesca also provides a copy of the "cease and desist" letter sent by Rush's management company to The Rush Limbaugh Show.  According to Cesca, The Rush Limbaugh Show had used various Rush songs as "bumpers out of ... commercial breaks" and a Rush song had been playing while Limbaugh had made various controversial statements about a woman named Sandra Fluke.

The relevant portions of the letter read as follows:

... Rush Limbaugh, Premiere Radio Networks and The Rush Limbaugh Show have been using Rush’s recorded music as part of what is essentially a political broadcast.

The use of Rush’s music in this way is an infringement of Rush’s copyrights and trademarks. The public performance of Rush’s music is not licensed for political purposes and any such use is in breach of public performance licenses and constitutes copyright infringement. There are civil and criminal remedies for copyright infringement, including statutory damages and fines.
(see sections 501-513 of Title 17 of the United States Code http://www.copyright.gov/title17/92chap5.html)

In addition, the use of Rush’s music in this manner implies an endorsement of the views expressed and products advertised on the show, and is in breach of not only copyright and trademark rights, but also, of section 51 of the New York Civil Rights Law (excerpt attached).

Long-time readers of this blog will recall that Rush has appeared here before in somewhat similar circumstances: nearly two years ago Rush demanded that US politician Rand Paul stop using their music at public appearances and stop quoting lyrics in speeches (see: Signal coverage from June 2010; Ben Sheffner's discussion of the matter; and the May 2010 cease and desist letter).

So - can Rush (the band) prevent Rush (the Limbaugh) (or any other radio show) from using its music on a radio broadcast?  (I'm going to focus on the copyright issues here, since those are of broader application, rather than the New York State-specific right of publicity claims or the trade-mark claims.)

As discussed in our earlier post (Canadian Copyright and Campaigns - Moral Rights Edition) the band might have an easier time of things trying to stop a Canadian political radio show from using their music: in Canada they (i.e., the composers of the songs in question) could try to assert their moral rights in the songs, found in Sections 14.1 and 28.2 of the Copyright Act (Canada).  Such a claim would involve arguing that Limbaugh's use of their compositions constitutes "use in association with a product, service, cause or institution" which "prejudices" their honour or reputation".  They might face some hurdles in demonstrating the first part of that formulation: it's not immediately clear that what Limbaugh does on his radio show constitutes a "cause", though one could make a relatively cogent argument that it falls within the borders of "product" or "service".  However, Limbaugh's show is produced and broadcast in the US, where moral rights do not apply to musical compositions.

Is there some other basis on which Rush could be asserting their infringement of copyright claim?  The letter from Rush's lawyer states "public performance of Rush’s music is not licensed for political purposes and any such use is in breach of public performance licenses".  Radio stations in the US obtain public performance licenses for compositions from ASCAP, BMI and SESAC.  To the best of my knowledge, none of their standard licenses (ASCAP;BMI; SESAC) include any carve-out for "political" uses.  Nor does the standard SOCAN license (on the basis that Rush is Canadian, I'm guessing that their public performance rights are granted to SOCAN, which in turn has an affiliation agreement with each of the US performing rights organizations (PROs), and Rush will have chosen to affiliate with one of them - based on Ben Sheffner's blog, at least some of their compositions are licensed via SESAC).  It's possible, though it would be to my knowledge a unique situation, that Rush has somehow carved out "political" uses from its grant of rights to SOCAN (and therefore the US PRO). 

We should also be sure to draw a distinction between the terms of a "music publishing" agreement (which composers enter into with a music publisher such as EMI Music Publishing or Warner/Chappell) and an agreement with a PRO.  While music publishing agreements regularly contain a carve-out requiring the composer's express permission for certain types of licenses, such as licenses for political activities, certain types of merchandise (e.g., firearms, alcohol, hygiene products, etc.), as mentioned above, it is almost unheard of for a grant of rights to a PRO to contain any similar sort of restriction.  Radio stations generally don't obtain licenses from music publishers, they obtain licenses from PROs. 

Based on the foregoing, the best copyright-based argument that Rush could make to prevent the use of its songs by Rush Limbaugh must originate somewhere other than in a violation of the PRO performing licenses.

Here's a possible way for a band like Rush to frame their argument: while a public performance license might confer the right on a radio station to publicly perform compositions, they can't function to confer a right on a producer to "synch" or otherwise use a composition in connection with a production created by someone who does not have a public performance license.  While a radio station's in-house production team might be able to "shelter" under the public performance license obtained by the station, an independently-produced show, such as Limbaugh's, argubaly needs a separate set of licenses (from the owners of the publishing rights in the composition and possibly the rights in the sound recording) in order to clear the rights in the show they produce which they then "deliver" to the radio station for broadcast.  It's possible that The Rush Limbaugh Show might have its own ASCAP, BMI and SESAC licenses which it has obtained.  There's also the possibility that Limbaugh relies on a "fair use" argument if the excerpts of music which he uses are sufficiently short.  But for music which is prominently featured in the broadcast, in the absence of TRLS having its own licenses in place, there may be a plausible claim of copyright infringement to be made.  Such an argument would be much stronger in a case where a radio production company produces a recorded show which it then provides to broadcasters for transmission - it might be a little tougher to make that argument where a show is broadcast live (as the Limbaugh show appears to be).

The foregoing argument is, of course, speculative - no court that I'm aware of, whether in Canada or the US, has considered a similar argument.  The consensus among US attorneys appears to be that an artist cannot legally prevent a radio show from using music if that show (or the station on which it is broadcast) has obtained the necessary PRO license (see, from Rolling Stone magazine, Can Rush, Peter Gabriel Legally Order Limbaugh to Cease Using Their Songs?).  That doesn't mean, however, that an artist has no ability to prevent the usage: public declarations of disapproval can serve as moral suasion, inciting (or "shaming") the makers of a radio show to drop the songs in question.  Depending on how the music is used in a particular show (e.g., if it is used as a theme song for a show, or is constantly played on the show to the extent that it becomes "identified" with the show in some manner) there might be some kind of trade-mark or right of publicity claim which could be advanced (which would be somewhat similar to the Canadian "moral rights" claim).  And claims backed by assertions of legal rights might persuade the recipient to stop the usage simply because they don't have the time, energy or money to contest the legal claim.

Canadian Government Announces New Telecom Ownership Rules and Spectrum Policy

How do you put concepts such as telecommunications policy, spectrum caps and foreign investment restrictions in the same sentence with “supporting Canadian families”? The federal Government has cracked that nut with the March 14, 2012 announcement by the Minister of Industry to shake up the rules in the telecom sector with a view to “providing Canadian families with more choices at low prices for wireless services”. The announcement is significant in that it has addressed some long-standing issues that stakeholders in the telecommunications industry have had before this Government and previous governments.

Among the Government’s stated objectives in announcing the new rules are to ensure sustained competition and robust investment and innovation in the wireless telecommunications sector.

The key measures announced by the Minister are:

1.   Changes to the telecom foreign ownership rules

The government will amend the Telecommunications Act to exempt telecommunications companies with less than 10 percent of total telecommunications Canadian market revenue from foreign investment restrictions in the Act. According to the Government, this change will “promote competition by improving access to capital…and encourage long-term investment in Canada's telecommunications industry.”

But the devil is in the details:

  • This measure is aimed directly at benefiting new entrant wireless players such as Wind Mobile whose market share is significantly under the newly announced 10 per cent threshold. On the other hand this 10 per cent solution is a significant policy loss for the incumbent telcos who have argued vehemently for competitive equity with respect to changes in the foreign ownership rules.
  • Companies that grow their market shares in excess of 10 percent of total Canadian telecommunications market revenues other than by way of merger or acquisitions will continue to be exempt from the restrictions.
  • Based on the wording of the Government’s announcement, the changes in the ownership rules would extend to all “telecommunications companies” not just wireless companies notwithstanding that the overall announcement is oriented to the wireless sector.
  • Restrictions on foreign ownership under the Broadcasting Act would remain for all companies with broadcasting distribution activities. So any company with less than a 10% market share who enters the broadcasting business (either as a content provider or a broadcasting distributor, will have to ensure that these businesses continue to comply with the more restrictive ownership rules which preclude non-Canadian control and limit the amount of voting interest by non-Canadians in a domestic broadcaster.
  • The provisions of the Investment Canada Act will continue to apply as is the case with any direct foreign investment.

2.   Spectrum caps not “set aside”

The government will apply caps in the upcoming spectrum auctions that will enable four or more service providers in each region to obtain spectrum in both the 700 MHz and the 2500 MHz bands. Here are the key details on the spectrum caps:

  • The 700 MHz band is “prime real estate” spectrum that has been re-harvested from analog broadcasters: services using this part of the spectrum have the ability to penetrate buildings and travel longer distances.
  • A limit will be imposed on the incumbent wireless providers for the 700 MHz spectrum.
  • While the Government has stated that its adopted approach of caps will be equivalent to a “set-aside” of spectrum (which it implemented in the 2008 Advanced Wireless Spectrum auction), the spectrum cap approach is clearly not the preferred approach of the new players, such as Wind Mobile and Mobilicity who have lobbied the Government to set aside spectrum that only they could bid on. Many are now speculating that the caps will push companies in the sector to merge, effectively introducing more market uncertainty in this sector.
  • Unlike a set-aside, the measures will not require Industry Canada to identify specific blocks of spectrum, allowing companies to bid according to their business plans.
  • The 700 MHz auction will be held in the first half of 2013, followed by the 2500 MHz auction within a year.
  • The Government has stated its expectation that companies will begin rolling out network coverage—and delivering benefits to Canadians—in a timely fashion after acquiring this new spectrum.

3.   Spectrum licence obligations

The government will require companies having access to two or more blocks of paired spectrum in the 700 MHz band to cover 90 percent of the population of their current high-speed population coverage within five years and 97 percent within seven years of licensing. In addition, general rollout requirements will be applied to both the 700 and the 2500 MHz bands, as in previous auctions (requiring between 20- and 50-percent population coverage, depending on the region, within 10 years).

4.   Roaming policies

Industry Canada will improve and extend current roaming policies. In the 2008 Advanced Wireless Spectrum auction, the Government required all carriers to offer roaming, including some provisions that were only available to new entrant service providers. These requirements were put in place for five years and are set to expire in 2013. In the March 14th announcement, the Minister has extended roaming provisions indefinitely and expanding them to all carriers. It will also shorten the timelines for initiation of arbitration and the arbitration process between companies negotiating roaming agreements.

5.   Antenna tower sharing

In the 2008 auction, Industry Canada mandated antenna tower and site sharing. This policy was introduced to reduce the proliferation of antenna towers and to facilitate the entry of new competition into the wireless market. The Government will continue these measures and will take steps to improve the current policies by requiring carriers to make available basic information on all towers to improve transparency and expedite the sharing process. It will also require shortening the timelines for initiation of arbitration and the arbitration process. 

Stakeholder input will be sought on the proposed changes to roaming and tower sharing policies.

The new framework for mobile broadband services for the 700 MHZ band can be found here. The Proposed Revisions to the Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing can be found here

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Co-Production Updates

Two items of note relating to the issue of international treaty co-productions which I believe indicate their re-emergence as a way of producing (especially in the current financial climate).

First, Telefilm Canada recently announced some changes to its Canada Feature Film Fund ("CFFF") guidelines - and one in particular should be welcomed by the producers in this country who participate in international treaty co-productions which access the CFFF.

Prior to these announced changes, a project which received CFFF funding did so by way of a recoupable equity investment.  In exchange for making this recoupable equity investment, CFFF required that a portion of the copyright in the subject production be transferred to it.  In the context of an all-Canadian production, this was generally not a problem as the participants (distributors, bonders and financiers) had a very good sense of who and what CFFF (and Telefilm) was and their role in the industry.

However, in the case of international co-productions, the fact that the Canadian co-producer was transferring part of its copyright to a third party - and especially a Government body - did not always sit well with the other co-producers, and in some cases foreign lenders.  I have personally spent many hours on a number of files over the years explaining to these concerned parties the role of CFFF and Telefim, the rationale behind the taking of a copyright interest, and why such a thing should not cause the concerns it was causing.  In many of these cases, the issue was resolved with a combination of reassurance and a leap of faith.  However, in some cases, the issue went beyond faith and matters evolved (or devolved) into time consuming discussions on the importance of copyright in different jurisdictions - all of which was very intellectually stimulating to the lawyers, but did not go over too well with the clients. 

The "fix" announced by Telefilm is something which seems to make complete sense and should be welcomed by most producers.  The CFFF investment can now be taken by producers as either : (i) a recoupable equity investment as was previously the case with an accompanying transfer of copyright; or (ii) a recoupable advance which eliminates the transfer of copyright.   The recoupment in either option is the same and remains unchanged i.e. a revenue corridor or open territories assigned to Telefilm.

One factor producers must evaluate in determining which option suits them is the potential impact on their tax credits- but beyond this issue, I believe that this change is a very helpful move by Telefilm. 

On a related note, I recently participated in a panel in Berlin during the most recent edition of the Berlinale film festival.  The event was hosted by our friends at Unverzagt Von Have, a leading German media law firm and was extremely well attended with people from Europe, North America and Asia.  The panel focused on international co-productions and related developments in the UK, Canada, India and Poland.  Most of the participants prepared materials which can be found here.

The materials I prepared relating to Canada were: (i) an updated paper on co-producing with Canadians; and (ii) a short overview on the benefits of co-producing with Canada.

 By Ken Dhaliwal

 

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