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ISP Teksavvy’s Appeal Against Pirate Site-Blocking Order is Dismissed in the Canadian Federal Court.

  • 01.06.2021
  • By Hugh Stephens
Hugh Stephens Blog

In a unanimous decision, on May 26 Canada’s Federal Court of Appeal (FCA) dismissed the appeal by internet service provider (ISP), Teksavvy, against Canada’s first site blocking order for copyright infringement issued in November 2019. At the time, I commented that the site blocking order marked a significant step forward for the protection of copyrighted content in Canada, even though it was attacked by critics who claimed that it would lead to “internet censorship”, violated net neutrality and was a usurpation by the courts of the role of Parliament. Those criticisms were unfounded then and they are unfounded now, as the Appeal Court has ruled. The decision confirms that blocking orders are available in Canada to combat pirate content providers who camp in cyberspace while targeting Canadian consumers, and it confirms that Canada has joined the more than 40 countries that use site-blocking to fight online piracy and protect legitimate content distributors.

The case was initiated by Bell Media, Rogers Media and Groupe TVA in 2019 against GoldTV, an offshore pirate website illegally distributing content licensed for the Canadian market by the three companies. GoldTV failed to respect repeated injunctions and failed to appear in court to defend itself, which is not surprising given the offshore pirate business model it follows. (It sells subscriptions to its unlicensed content through providing apps that modify a digital box purchased by consumers, all at a fraction of the cost of legitimate subscription services). Bell, Rogers and TVA secured a court order requiring ISPs in Canada, including internet services owned by themselves, to block GoldTV. No ISPs, except Teksavvy, a small internet reseller, objected to the order.

Why did Teksavvy resist the order by launching an appeal? According to an interview with its VP of regulatory affairs posted on its website, Teksavvy’s position is that it is “not defending piracy, but rather the broader principle of an open internet against a creeping regime working in favour of very narrow commercial interests.” And what would those “narrow commercial interests” be? Well, apparently they are represented by larger ISPs and integrated media and telecom companies like Rogers, Bell and TVA that not only pay to license and distribute content, but also build the backbone internet infrastructure on which internet access resellers like Teksavvy depend. As you can surmise, there is no love lost between Teksavvy and the majors.

Teksavvy is a “reseller”, a company that offers internet service to consumers but does not own the last mile. It must obtain, for a fee, access to the home from the major telcos who have built and who own the infrastructure. The telcos are required by the regulator, the Canadian Radio-television and Telecommunications Commission (CRTC) to offer access to the resellers at wholesale rates set by the Commission. This is done to encourage competition. The real issue is the rate structure. If too high, the resellers won’t be able to compete at the retail level; if too low, they will undercut the telcos who will say they can’t earn a sufficient return on investment to continue to build out and upgrade their infrastructure. Teksavvy is not the only reseller in this position, just one of the more vocal ones, and has consistently been a thorn in the side of the major telcos. Coincidentally–and unrelated to the FCA’s decision–just days after the Appeal Court’s ruling, the CRTC announced a revised rate structure that largely favours the telcos, increasing the wholesale rate for access. In response, Teksavvy called for the resignation of the Chair of the Commission and announced that it would withdraw its application to provide mobile services.

Was animus toward the telcos one of the reasons for Teksavvy leading the charge against a site blocking process that was widely accepted by the industry? It is hard to say with precision what their motives are but in an earlier blog (Canada’s First Site Blocking Order: What is Driving the Objectors?) I examined both Teksavvy’s motivations and those of intervenors appearing in support of its appeal (the Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic (CIPPIC) at the University of Ottawa and the Canadian Internet Registration Authority (CIRA), also associated with the University of Ottawa’s law faculty). I noted that;

“Although Teksavvy claims it is fighting for internet freedom and not to defend piracy (David vs. Goliath and all that), it is pretty clear that this is all about competing with the large ISPs…If Teksavvy is permitted to continue providing access to pirated content to its subscribers while its major competitors are either constrained from doing so, or willingly agree not to, this gives “David” a competitive advantage when it comes to finding and keeping customers, especially those whose proclivities tend to consumption of content they haven’t paid for”.

As for the intervenors, they fell into two groups, (1) those supporting the site blocking order (Fédération Internationale des Associations de Producteurs de Films–FIAPF; the Canadian Music Publishers Association, International Confederation of Music Publishers, Music Canada and International Federation of the Phonographic Industry (IFPI); the International Publishers Association, International Association of Scientific, Technical and Medical Publishers, American Association of Publishers, The Publishers Association Limited, Canadian Publishers’ Council, Association of Canadian Publishers, The Football Association Premier League Limited and Dazn Limited, a sports streaming service), and (2) those opposed (CIPPIC, CIRA and the British Columbia Civil Liberties Association–BCCLA). The court grouped them into three categories, the supporters of the order, CIPPIC and CIRA and finally, the BCCLA.  This somewhat unusual procedure was taken to expedite the filing of evidence and to hasten the court process.

Those opposing the order—Teksavvy, CIPPIC, CIRA and BCCLA– put forward a number of arguments; viz. site blocking is not mentioned in the Copyright Act and therefore the court has no jurisdiction; the CRTC has jurisdiction (this, despite the fact that the CRTC concluded that it did not have jurisdiction to establish site blocking as a result of the FairPlay Canada application to create an administrative agency to manage a site blocking regime); site blocking is inconsistent with net neutrality and, finally; that site blocking interferes with freedom of expression as enshrined in the Charter of Rights and Freedoms. The Appeal Court examined and ultimately dismissed all these arguments. For a detailed examination of the case, see prominent copyright lawyer Barry Sookman’s blog posting “Blocking orders available in Canada rules Court of Appeal in GoldTV case”.

Will this be the end of it? Teksavvy could of course try to appeal to the Supreme Court of Canada (SCC), but there is no guarantee the SCC would grant leave to hear the case. One can never pre-judge what the Supreme Court justices may decide in terms of what to add to their docket, but the FCA’s decision was both clear-cut and unanimous, suggesting little grounds for appeal. For now, the GoldTV order remains in place and the way has been cleared for further similar orders. Thus Canada is well on its way to joining the large number of countries that have already instituted blocking of copyright infringing content either through the courts, legislation or an administrative process. The Philippines is but the most recent country to move to implement site blocking as a means to protect legitimate content industries and artists.

An obvious exception is the United States, where an initiative in 2011 to bring in a measured site blocking approach through legislation, known as the Stop Online Piracy Act (SOPA) was torpedoed by a coalition of internet platforms and associations, led by Google, Wikipedia and the Electronic Frontier Foundation, among others. A campaign of fear-mongering and misinformation led to the withdrawal of the legislation, and the concept of site blocking has remained toxic in the US ever since, notwithstanding its successful introduction in a number of other democracies that are just as concerned with personal freedoms as the US, with the United Kingdom, Australia and now Canada being good examples.

While the courts in Canada have tackled the problem in the absence of specific legislation governing site blocking (as they did in the UK), arguing that a copyright owner is “entitled to all remedies by way of injunction, damages, accounts, delivery up and otherwise that are or may be conferred by law for the infringement of a right”, other countries such as Australia have passed legislation (enacted in 2015, amended in 2018) to address the issue. Australia has been one of the more successful regimes to curtail widespread online offshore piracy.  Canada is also considering legislation.

As part of the process for updating the legal regime for protection of copyrighted content in the digital environment, a consultation paper “A Modern Copyright Framework for Online Intermediaries” has recently been released by the Department of Innovation, Science and Economic Development (ISED). ISED is the department of government in Canada that has statutory authority for the Copyright Act. The paper posits a wide range of options for dealing with online copyright infringement and the role of intermediaries, with public comments sought by May 31. One of the options is to establish a statutory basis for site-blocking in cases of copyright infringement, subject to a number of conditions such as prima facie infringement, prior notice, technical feasibility, irreparable harm, effectiveness, complexity and cost, and safeguards. The paper cautiously notes that “establishing such a remedy in legislation could be warranted” given that there is already a legal basis for such orders, i.e. the GoldTV case. It thus appears that the Federal Court’s decision has helped move the bureaucratic process forward in terms of potential legislation, although one has to wonder if legislation is really necessary now that the courts have already dealt with the issue on the basis of existing law.

Any legislative solution will be a slow process given the input from across the spectrum of stakeholders, with a number no doubt opposed to any form of site blocking based on the usual exaggerated objections related to net neutrality and online freedom of expression. The result may be gridlock with proponents and objectors engaged in extensive lobbying of a Parliament where the government is in a minority situation and has a number of other difficult content and technology issues on its plate. It is therefore all the more welcome that the FCA has upheld the initial site blocking order of the Federal Court and confirmed that site blocking orders are available in Canada as a form of relief against offshore pirate websites.

This article was originally published in Hugh Stephens Blog

ABOUT THE AUTHOR

Hugh Stephens

Distinguished Fellow, Asia Pacific Foundation of Canada