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Web address: http://www.law.com/ny
VOLUME 228—NO. 4 TUESDAY, JULY 9, 2002
C OMPUTER L AW
BY RICHARD RAYSMAN AND PETER BROWN
Internet Streaming of TV Broadcasts: The Canadian ‘Legal Void’
O
NE OF THE latest big that is then redistributed to the net-
challenges that the works. The compulsory retransmission
Internet has posed for license is not limited to just Canadian
United States copyright programming either; it includes the
owners comes from Canada, where programming of U.S. broadcast networks
two companies, iCraveTV and JumpTV, as well.
have been seeking to retransmit Until very recently, only cable and
Richard Raysman Peter Brown satellite television companies have been
television programming — much of
it American programming — over approved for the compulsory retransmis-
the Internet. distribution networks. sion license. But the text of §31 of the
iCraveTV and JumpTV have created Canadian Copyright Act does not limit
Internet rebroadcast business models The Canadian ‘Legal Void’ the issuance of a compulsory license only
based on a perceived “legal void” in the to cable companies and satellite
Under U.S. law, a company that tried
Canadian Copyright Act. In so doing, providers. This “legal void” results from
to broadcast copyrighted television
they have caught the attention of the fact that technically Internet
programming over the Internet without
United States companies, who are retransmissions of broadcasts would
permission from the copyright holders —
fearful that in the borderless expanse of seem to be permissible provided a
likely by a process known as “streaming”
cyberspace, a void in the laws of one compulsory license was obtained.
— would face daunting legal obstacles.
jurisdiction can quickly become a black
Most notably, the U.S. Copyright Act,
hole for the copyright protections
17 USC §106, grants copyright owners
Jumping Into the Void
intended by another jurisdiction.
certain exclusive rights, including the It was somewhat inevitable that
Copyright holders in the United States
rights to perform and display audiovisual Internet-based services would attempt to
worry that Internet retransmission
works publicly. Arguably then, the jump into this legal void. The first major
within Canadian borders, no matter
iCraveTV and JumpTV models would controversy surrounding Internet televi-
what the intent and efforts of the
not be permissible in the U.S. unless sion retransmissions came in 1999, when
retransmitters, would inevitably make
they had a broadcast license from every iCraveTV rebroadcast approximately 17
the programming available outside
program copyright owner. television channels over its Web site,
Canada and seriously damage their
The current disputes, however, have including the U.S. networks ABC, NBC
carefully constructed licensing and
centered on Canadian copyright law. and CBS. iCraveTV did not have
Richard Raysman and Peter Brown are Specifically, §31 of the Canadian authorization from the programming
partners at Brown Raysman Millstein Felder & Copyright Act exempts rebroadcasts of copyright holders and did not pay com-
Steiner in New York. Alexis B. Hart, a local or distant television and radio pensation to the copyright holders for
summer associate, assisted in the preparation of this signals from the standard copyright the rebroadcasts. It launched its banner-
article. Brown Raysman Millstein Felder & Steiner fee requirements in Canada. Instead, advertising-based service and promised
offers legal services in Canada through its exclusive rebroadcasters may apply for a compulso- to pay royalties whenever the Canadian
affiliation with Mann & Gahtan which provided ry retransmission license and pay a set Copyright Board figured out what the
assistance with this article. fee to the Canadian federal government tariff would be for Internet retransmis-

2. NEW YORK LAW JOURNAL TUESDAY, JULY 9, 2002
sions, since Canada’s statutory licensing suit in U.S. federal court on behalf of 13 will broadcast a local or distant signal
system was designed only to collect a film and television plaintiffs, including that is similar to the cable and satellite
portion of monthly subscriptions (i.e., Twentieth Century Fox, Disney, providers’ broadcasts. Because the
cable and satellite subscriptions). Paramount Pictures, Time Warner, compulsory retransmission license had
iCraveTV believed that the legal void Universal City Studios and Columbia never been applied to Internet retrans-
was just the opportunity it needed Pictures Television claiming that missions, JumpTV has asked Canada’s
to become the first major Internet iCraveTV violated their broadcasting Copyright Board for a single, low-royalty
rebroadcaster. The company claimed copyrights by carrying programming on fee structure that would be conducive to
that broadcasting via the Internet its Web site that was not authorized or its distribution medium.
technically fell under the same model paid for. The National Football League Canadian and U.S. copyright holders,
as cable and satellite providers, just and the National Basketball Association cable and satellite broadcasters argued
that the broadcasting medium was also joined the suit against iCraveTV, against JumpTV’s compulsory retrans-
different; hence it should be able to stating that their ability to negotiate mission license. Collectively, they
take advantage of the exemption separate contracts in each market would contended that JumpTV’s request for
from the copyright requirements and be be injured because their broadcast royalty fees for Internet retransmission of
allowed to receive a compulsory signals would be available worldwide. TV programs was inappropriate because
retransmission license. The NFL mentioned that alternative the Canadian Copyright Act did not
broadcasting methods would be consid- cover such retransmissions.
The Entertainment Industry ered in order to protect its copyright in Additionally, JumpTV suggested that
the face of such a threat, including a the Canadian Copyright Board establish
Strikes Back
pay-per-view model. On Feb. 8, 2000, a an interim tariff exclusively for its
iCraveTV’s attempts to exploit the U.S. district court judge in Pittsburgh venture, and then decide whether or not
Canadian copyright void put other com- issued a preliminary injunction to allow other Webcasters to rebroadcast
panies, namely large U.S. entertainment against iCraveTV banning it from on a case-by-case basis, so as to not open
conglomerates, into an uproar. They retransmitting unauthorized U.S. the floodgates for Internet rebroadcasts.
argued that their intellectual property copyrighted television programs, films JumpTV believed that an interim tariff
rights were being violated and that and sports telecasts.1 was necessary because heightened
legalizing Webcasts in Canada could The court found likely copyright and opposition from copyright holders, cable
have the effect of destroying their entire trademark violations, notwithstanding and satellite broadcasters would kill
business models. Essentially, the revenue iCraveTV’s assertion that their activities Webcasting, as evidenced by the result
model of television and film broadcasters were legal under Canadian law. Shortly in the iCraveTV settlements.
is based on individually negotiated after the injunction, iCraveTV agreed One difference between JumpTV and
exclusive licenses for a particular geo- to an out-of-court settlement in iCraveTV is that JumpTV has not
graphical area. Currently, the Internet which iCraveTV would refrain from attempted to broadcast any U.S. signals
does not heed easily to geographical retransmitting U.S. copyrighted signals without authorization from the
limitations, and the studios and though the Internet or any other online copyright owners prior to requesting a
broadcasters argued that Webcasting or wireless technology whatsoever. compulsory retransmission license.
could effectively eviscerate the exclusive JumpTV also claims that it has the
license model by devaluing the price technology to black out programming in
If at First You Don’t Succeed
for an exclusive license for any one areas where permission to broadcast has
particular area. Broadcasts over the Another Canadian company now not been obtained. In fact, JumpTV
Internet could be viewed in areas where wants to jump headfirst into the “legal claims that its border-control technology
the broadcast license did not permit or void” that iCraveTV sought to exploit. would be no worse than the cross-border
infringe upon another entity’s exclusive In 2001 JumpTV filed for a compulsory leakage of direct-to-home satellite TV
license. iCraveTV was unable to retransmission license to rebroadcast systems, where piracy is known to exist.
guarantee that the TV broadcasts would local or distant signals via the Internet Skeptics, of course, remain: according to
not be viewed in areas where the (i.e., Webcast). Just like iCraveTV, one Canadian broadcasting official,
broadcast license did not permit. JumpTV stated that it qualified for the “there has not been a technology that a
In early 2000, the Motion Picture exemption from the Canadian whole bunch of bright college kids
Association of America (MPAA) filed Copyright Act’s requirements because it couldn’t crack.”2

3. NEW YORK LAW JOURNAL TUESDAY, JULY 9, 2002
continue to oppose any effort on their retransmission action on their part
Canadian Authorities Answer
part to, in effect, use our signals for their dealing with local (Canadian) or distant
Although the Canadian government business, pay us a pittance for it and then (foreign) signals will most likely not be
announced last year that the Copyright open us to potentially significant damage tolerated. However, the ultimate effect
Act would be amended to specifically by making them [the signals] available of the new law depends upon whether
account for Internet retransmission and all over the world on the Internet.”3 the governing regulations will make
other newer technologies, it also delayed CAB called for a “carve-out” in the it easier or harder for Internet
the regulations that would govern the existing Canadian copyright law retransmitters to operate in Canada. It is
specifics for one-year, pending further that would make new media and expected that the licensing fees may
investigation. Despite JumpTV’s claims Internet retransmitters ineligible for the be too onerous for Internet-based
that the effective one-year moratorium compulsory license regime. companies to operate. Although these
on the regulations would be fatal to its amendments do not amount to a
business and to Webcasts in general, the complete carve-out as sought by CAB, it
Legislation in Canada
Canadian government maintained that does put the Internet retransmitter
it needed the one-year time-period in On June 18, 2002, the House of
business on effective notice until the
order to study and provide comprehen- Commons of Canada passed Bill C-48,
regulations are promulgated.
sive regulations governing newer which would effectively amend the
retransmission technologies. The delay Canadian Copyright Act. The Canadian
Conclusion
was largely due to pressures from U.S. Senate is set to consider the bill this fall.
interests, which claimed that the To erase the legal void in the Copyright The proposed amendments to the
amendments as currently drafted Act, Bill C-48 distinguishes between the Canadian Copyright Act make Internet
insufficiently protected U.S. copyright terms “retransmitter” and “new media retransmissions a real possibility in
holders. Additionally, the Canadian retransmitter” and makes it perfectly Canada, depending of course, upon the
regulators made clear that JumpTV clear that Internet-based retransmitters standards established by the regulations.
would have to prove that its signal that want to retransmit distant signals iCraveTV resurfaced this past spring
protection software actually works by must pay royalties first and comply with claiming that it now has the technology
showing that only Canadians would further regulations to be promulgated. to territorialize who watches and is able
have access to the broadcasts. Bill C-48 defines the term “retrans- to black out broadcasts in areas where
In October 2001, JumpTV withdrew mitter” in §31 as “a person who performs permission has not been obtained.
its bid for a compulsory retransmission a function comparable to that of a cable JumpTV too, may decide to test the legal
license. JumpTV’s lawyers stated that retransmission system, but does not waters by launching without a license.
JumpTV was reviewing its business include a new media retransmitter.” A Needless to say, copyright owners in the
model and would likely be moving from “new media retransmitter” is defined to U.S. and broadcasting authorities in
a banner-advertising model to a sub- mean a person whose retransmission is Canada are likely to once again
scription-based service. The company lawful only by virtue of a 1999 ruling consolidate and wage a lobbying war if
made clear that its decision to withdraw that exempted the Internet from these plans go forward.
its bid was not due to government broadcasting regulation, so the bill
pressures or opposing broadcasters. makes clear that Internet retransmitters
•••••••••••••• •••••••••••••••••
(1) Twentieth Century Fox Film Corp., et al., v.
JumpTV also noted that the tariff will be regulated.
iCraveTV, et al., 53 U.S.P.Q.2D (BNA) 1831 (W.D. Pa.
application process was tedious and The House of Commons indicated
Feb. 8, 2000).
extremely costly for new companies. that the new regulation-making power (2) ICrave Plans Comeback This Spring, NATION-
Canadian copyright authorities made established with Bill C-48 will allow new AL POST, March 16, 2002, quoting Ben Ivins, Senior
clear their need to approve any revenue types of distribution systems, including Associate General Counsel, National Association of
the Internet, to be used to retransmit Broadcasters.
model that JumpTV pursued if its
(3) JumpTV.com Pullout Doesn’t End Debate on
purpose was to rebroadcast TV signals broadcast signals if they meet the
Streaming TV Copyright, COMMUNICATIONS
via the Internet. Michael McCabe, conditions set out in the regulations. DAILY, Oct. 15, 2001.
president of the Canadian Association of This bill sends an apparent signal to
Broadcasters (CAB) stated, “We will Internet companies that any unlicensed
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