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VMedia vs. Bell Media: What will it take to change the channel on Internet law and policy?

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There is no rest for the wicked -- and there is even less rest for the allegedly wicked who find themselves on the wrong end of a lawsuit from the largest telecommunications company in Canada.

Throw in the Internet, a fading broadcasting model, two federal statutes, and a counter lawsuit, and watch the midnight oil market boom -- all thanks to a small start-up Internet and cable provider, VMedia, in its current battle against TV behemoth Bell Media Inc.

In many ways, this case is just the latest episode of the Internet versus the (IRL) world. By trying to adapt over-the-air TV to the Internet and the present-day reality of viewers, VMedia sparked debate in broadcasting, telecommunications and copyright, each of which is already a broad and complex area on its own. For this reason, the television stand-off also provides a perfect case study, highlighting key elements of what it takes to change the law when it comes to reconciling old ways and new technology like the Internet and everything it makes possible.

The Case: A Channel by Any Other Platform?

VMedia is a small, independent Internet service provider (ISP) and cable TV provider that operates across Canada, and is known for its Internet TV (IPTV) service, which lets users watch television over their Internet, or stream Internet video through their television. VMedia is able to do this partly by holding a license as a BDU (broadcasting distribution undertaking). Put simply, a BDU is a company responsible for delivering the television programming you watch, which the company buys rights to from independent creators, broadcasters, film companies, or other copyright holders who own the programming itself --whether a specific show, a movie, or an entire channel.

Recently, VMedia launched a basic TV package to compete with the mandated basic cable packages ordered by the CRTC, which major BDUs like Bell made as difficult as possible for consumers to actually benefit from. The twist: VMedia's package only requires you have its ROKU Player and any Internet connection whatsoever -- no VMedia cable, and no VMedia Internet needed. You pay $17.85/month, download their app, and can now stream live TV through your Internet, from 30 major TV channels in Canada and the U.S. Most of these channels are available over-the-air (OTA), meaning anyone with a television and antenna can obtain them for free.

Two of those OTA channels were CTV and CTV Two, owned by Bell. After sending VMedia a warning letter, Bell took legal action to force VMedia to remove those channels from its basic TV package, on grounds of copyright infringement. According to Bell, VMedia cannot rely on its BDU license after untethering its basic TV offering from its own cable and Internet services, because this makes the package more like an over-the-top (OTT) service, like Netflix, which is a separate category with different rules. Since the Broadcasting Act and Copyright Act allow only BDUs to air those standard channels without first obtaining consent, Bell argues, VMedia should have obtained consent from Bell and/or arranged to pay for the channels in its separate OTT-like service.

VMedia launched its own lawsuit in response, asking the courts to declare that its program is legal. While VMedia has withdrawn the two channels for now, both cases are still ongoing.

So You Want to Use Law to Save the Internet

When it comes to the Internet, technological advances, and helping entrenched industries such as news, music, or television adapt and thrive, the law often finds itself playing catch-up. Part of being an open Internet advocate involves making sure that while trying to keep up, the law doesn’t run in the wrong direction, go too far too fast and overcompensate, or both. VMedia's predicament exemplifies three essential components of Internet-driven law reform, playing out before us in real time. Summed up in three words, they are: 1) Reality; 2) Policy; and 3) Agency.  

1. Reality: What are people’s everyday realities? How do Internet users act in daily life? Are we encouraging or discouraging people from just being human?

At OpenMedia and with many other advocacy groups in this space, the overriding focus of campaign and advocacy goals is the everyday lived experience of Internet users across the board. It’s important that laws account for how people actually act in daily life, and that decision-makers are aware of the ground-level impact of their decisions.

With television, the everyday experience is increasingly moving online. OpenMedia found as much in its crowdsourced report, "The Future of TV Is the Internet." VMedia knows this, too, as I had the opportunity to hear firsthand from George Burger, the company's founder and advisor:

A lot of people who are taking this up, are first off, ROKU box owners, they tend to be cord-cutters. They tend to be people whose video content consumption has greatly gravitated towards online platforms. That's the battlefield. So we have to be able to fight on that battlefield, or we'll just give it up. We can't just complain about Netflix all the time....That ship has sailed, and we're just watching from port waiting for it to come back. It’s not going to come back.

Part of what VMedia is fighting for is the ability to meet people where they are at -- and that's online, not gathered around rabbit ears antennae. If you're getting a sense of déjà vu right now, it may be from how the traditional broadcasting industry (in this case, Bell) seems to be repeating the mistakes of the traditional music industry a decade ago, with music copyright. As Burger said:  

It really is very reminiscent of if the music industry said the only way you could listen to music is on CDs, and you need to do it on a CD player. That’s really Dark Age thinking. If the technology is there, which satisfies all the substantive interests of all the parties, then that technology should be embraced.

Perhaps no one has said it better than author and copyright activist Cory Doctorow, in his book Information Doesn’t Want to Be Free:

Laws that are beside the point can say all kinds of silly things, and the silly things will be beside the point, too. The reality is that as soon as the capacity to copy music (and, later, video) for personal reasons reached the average person, the world’s courts and legislators…recognized that there was a difference.

While VMedia is not an individual average person, the common touchstone here is whether, in adapting laws and regulations to the Internet age, it makes sense to force individual, average people to act in ways other than they normally would or already are in the course of living their lives. Sometimes it does; however, the catalytic nature of the Internet means this question requires particular consideration when it comes to deciding what’s right.

2. Policy: What is the end goal? Does it involve justice or unfairness? Will it achieve a greater good?

If reality is how things are, then policy is how things should be. Policy arguments consist of guiding principles that help the law to evolve and move forward despite itself, especially precedent-based common law. This is the realm where you can answer, "Well, that’s just how it is," with "But is that how it should be?" and "This is how it could be," and that opens up room for change.

Both Bell and VMedia argue in their respective applications to the court that the law is on their side. However, given the constant state of murkiness, flux, and upheaval that characterizes Internet-driven industry disruption, the intersection between law and Internet issues is where policy often has a chance to shine.

The law aims to answer questions like: Is VMedia a "retransmitter" under the Copyright Act? What are the limits of a BDU license under the Broadcasting Act? Does VMedia's basic TV package fall under the Digital Media Exemption Order?

Policy aims to answer questions like: Should subscribers be able to access otherwise free over-the-air live TV through the Internet? Should creators and producers of television content be paid for every retransmission of their work in all cases? (For the record, VMedia pays royalties on its new service.) Is it important that people across Canada have the most affordable and convenient access possible to a significant aspect of culture and the public domain? How far is the law willing to go to protect the old broadcasting industry model, if Canadian broadcasting content can be separated from it? For all of the above, why or why not? And the all-important question for advocates such as the OpenMedia team and myself: Will this break the Internet?

On the policy side, VMedia's Burger is particularly concerned about preserving conventional Canadian broadcasting and bringing as much of it as possible into the future with the rest of us:

If we care about sustaining cultural policy, then we also have to sustain broadcasting in some shape or form. Or that’s it, it will be done....Canadian content will disappear. It will disappear. So we have to do whatever we can to keep people engaged.

This is something the courts might be encouraged to consider in determining the statutory questions above, to resolve this case in a more contextualized manner.  

To wrap this section, it's critical in Internet-related legal reform to examine what people, entities, or institutions should be doing, as much as or more than noting what they are already doing. It may be that policy goals already align with everyday behaviour; or they may not, with policy goals having to supersede "normal" behaviour for reasons of justice, social progress, or the greater good.

The key takeaway is that where Internet-related issues are concerned, at this point in time, you cannot apply law without also paying attention to the related policy concerns, and vice versa. Policy without law is utopia -- wishes without a concrete way to make them real; while law without policy is dystopia -- unthinking enforcement of rules without context or exception, even when they don’t make sense or do more harm than good. To avoid either, you need both.

3. Agency: Who is in a position to shape how the law changes?

The final element this case highlights is the power of different actors to shape the law. For example, some law reform can come from parties trying to exploit, test, push the boundaries of, or outright break (depending on your point of view) the current law. This catalyzes a response from courts or regulators to implement change or clarify the law going forward. If the decision-making process is a public proceeding, then that’s where everyday Internet users like OpenMedia's community come in, as well as digital activists, legal advocates, civil society groups, and non-profit organizations. Currently, for instance, OpenMedia is involved in a major net neutrality proceeding at the CRTC, that will set the rules around zero-rating and Internet data plans for Canada for at least the next several years.

The reason paying attention to the actors involved matters is to ensure that extraneous factors such as disproportionate political power or financial resources don’t unduly influence the ultimate direction of new laws. One thing that both media coverage and Burger highlighted about the case between VMedia and Bell is the imbalance of resources between the two companies. As many are aware from the legal aid and access to justice context, lack of resources can impact the quality of the legal arguments you present, and ultimately the law itself. Thus, it matters who has more or less agency to participate in and influence decision-making processes that lead to new laws. Like with policy and people's everyday realities, this takes on added importance in context of a rapidly evolving and open-ended field such as Internet law and policy.

While users' realities, principled policy, and participants' agency are by no means the only significant aspects of law in the time of Mozilla, they stood out the most clearly to me in this particular case between VMedia and Bell. Here’s hoping they will to the courts as well.

Cynthia Khoo is acting as external counsel to OpenMedia on a number of files, including the ongoing Examination of differential pricing practices related to Internet data plans (TNC CRTC 2016-192), before the Canadian Radio-television and Telecommunications Commission, and co-counsel on  Google Inc. v. Equustek Solutions Inc., et al. at the Supreme Court of Canada. She was called to the Bar of Ontario in June 2016, after completing articles with the Public Interest Advocacy Centre.

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