COPYRIGHT REGULATIONS

Regulations Amending the Local Signal and Distant Signal Regulations

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REGULATIONS
Copyright Act

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Ottawa, March 8, 2004

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to paragraph 31(3)(a) (see footnote a) and to subsection 62(1) (see footnote b) of the Copyright Act, hereby makes the annexed Regulations Amending the Local Signal and Distant Signal Regulations.

1. The long title of the Local Signal and Distant Signal Regulations (see footnote 1) is repealed.

2. The heading before section 1 and sections 1 to 3 of the Regulations are replaced by the following:

1. In these Regulations, "area of transmission" means

(a) in respect of a terrestrial television station, the area within the predicted Grade B contour of the station, as determined in accordance with the method set out in the schedule, and the area within a radius of 32 km from that contour;

(b) in respect of a terrestrial F.M. radio station, the area within the predicted 0.5 mV/m field strength contour of the station, as determined in accordance with the method set out in the schedule; and

(c) in respect of a terrestrial A.M. radio station, the area within a radius of 32 km from the principal studio of the station.

2. (1) For the purposes of subsection 31(2) of the Copyright Act, "local signal" means one of the following:

(a) in respect of the entire service area of a retransmitter, the signal of a terrestrial radio or television station the area of transmission of which covers all of that area; and

(b) in respect of a portion of the service area of a retransmitter, the signal of a terrestrial radio or television station the area of transmission of which covers all of that portion.

(2) For the purposes of subsection 31(2) of the Copyright Act, "distant signal" means a signal that is not a local signal.

3. The schedule to the Regulations is amended by replacing the reference "(Section 2)" after the heading "SCHEDULE" with the reference "(Section 1)".

4. These Regulations come into force on the date on which they are registered.

The amendments to the Local Signal and Distant Signal Regulations SOR/89-254 (the Regulations) amend the definition of "local signal", to make it applicable to all retransmitters eligible for the compulsory license set out in section 31 of the Copyright Act (the Act), and eliminate the special rule for wireless terrestrial retransmitters. The definition of a local signal is relevant for the Copyright Board tariff setting exercise.

Description

Definition of "local" signals

Section 31 of the Act, establishes a compulsory licence for retransmitters, e.g., cable companies and Direct-to-Home (DTH) satellite companies, which allows them to retransmit over-the-air broadcast signals without the consent of affected rights holders, provided certain conditions are respected. Among the applicable conditions is the requirement, as set out in paragraph 31(2)(d) of the Act, that retransmitters pay copyright royalties to the rights holders in respect of the retransmission of distant signals. No royalties are payable in respect of local signals. These royalties are set out in a tariff certified by the Copyright Board pursuant to paragraph 73(1)(a) of the Act. Under subsection 31(3) of the Act, the Governor in Council may make regulations defining "local signal" and "distant signal" for the purposes of subsection 31(2).

The current Regulations define "local" signals only with respect to the service area of a "cable retransmission system" and wireless "terrestrial retransmission system". Consequently, all signals carried by other retransmitters eligible for the section 31 compulsory licence, namely DTH satellite retransmitters, are distant signals even when they are retransmitted back into their local markets. Concerns with this aspect of the Regulations were not raised at the time of their introduction in 1989 since Canada's current licenced DTH satellite service providers did not commence operations until the latter part of the 1990s.

For cable and wireless retransmission systems, the determination as to whether a signal is local or distant is based on precise engineering calculations using criteria set out in the Regulations. A signal retransmitted within a broadcaster's "area of transmission" (i.e., the area where the broadcaster's over-the-air signal remains intelligible according to certain criteria) will be deemed local. Where the signal is retransmitted outside of that area, then it will be deemed distant.

Therefore, to make the definition of "local signal" applicable to all retransmitters eligible for the compulsory retransmission licence under section 31 of the Act, the Regulations are being amended by replacing the term "cable retransmission system" with the neutral term "retransmitter". The criteria used to calculate the "area of transmission" will remain and are not the subject of the present amendments.

Wireless Terrestrial Retransmission

Notwithstanding the foregoing scheme, wireless terrestrial retransmitters currently operate under a special rule. Under paragraph 3(a)(iii) of the Regulations, a signal retransmitted by such a system is always considered local, provided that the retransmitter's transmitter is located within the broadcaster's area of transmission; this is so even for signals retransmitted to subscribers beyond the area of transmission. At the time the Regulations were initially published, wireless terrestrial retransmitters mostly serviced rural areas and had small numbers of subscribers. Since that time, however, large wireless retransmission systems, such as Multipoint Distribution Systems (MDS), have emerged to compete with cable and DTH satellite systems in large urban markets. In some circumstances, a signal provided by both a wireless and a cable system to subscribers in the same location (e.g., an apartment building) would be differently characterized given the different rules. Furthermore, in cases where a wireless system relies upon several transmitters in the same service area, there is some ambiguity as to which transmitter is the relevant transmitter for the purposes of the Regulations.

Therefore, to eliminate the ambiguity relating to location of the transmitter, and to provide equal treatment to all retransmitters, paragraph 3(a)(iii) of the Regulations is being deleted.

Alternatives

The alternative to amending the definition of "local signal" is the status quo. However, in order to extend the application of the Regulations to all retransmitters eligible for the compulsory retransmission licence under section 31 of the Act, the definition must be changed.

The alternative to deleting the special rule for wireless terrestrial retransmission systems is the status quo. However, this is not an attractive alternative as the rule in the Regulations must be changed to provide clarity as to location of the transmitter and to treat all retransmitters on the same footing.

Benefits and Costs

Re: Definition of "local" signals

The amended Regulations will provide fairness in the application of the definition of "local signal" by extending it to all retransmitters eligible for the compulsory retransmission licence under section 31 of the Act, notably DTH satellite providers.

Re: Wireless Terrestrial Retransmission

The deletion of this rule is meant to address potential ambiguity relating to the location of a transmitter and to treat all retransmitters on the same footing.

Consultation

Two proposed amendments to the Regulations were put forth to stakeholders and consultations were held by the departments of Canadian Heritage and Industry Canada (the Departments) in 2002 and 2003. The first consultation addressed the proposal to amend the definition in the Regulations of a "local" signal. The second consultation dealt with the proposal to eliminate the special rule for wireless retransmission systems. These consultations were further outlined in the Regulatory Impact Analysis Statement at the time of pre-publication.

The Regulations were pre-published in the Canada Gazette, Part I, on November 15, 2003. The Departments notified affected stakeholders of the pre-publication by way of e-mail and regular mail.

In response to the pre-publication, comments were received from three stakeholders. Bell ExpressVu and Star Choice, both Direct-to-Home (DTH) satellite companies, supported the amendments. Meanwhile, the Canadian Retransmission Rights Association (CRRA), an association representing certain Canadian and American broadcasters, made a submission pertaining to issues other than those proposed for amendment. In its submission, the CRRA called for further amendment to the Regulations to address digital signals.

The departments of Industry Canada and Canadian Heritage take the CRRA's submission into consideration and note that the issue of digital signals, as it pertains to the Act, will be examined with priority but separately from the current amendments. Furthermore, the current amendments will not prejudice any future changes required to address the digital signal issue.

As the Departments have not received any other comments on the amendments as proposed in the pre-publication, no further changes will be made to the Regulations at this time.

Compliance and Enforcement

The Regulations are strictly definitional and form a key element of the royalty tariffs certified by the Copyright Board pursuant to paragraph 73(1)(a) of the Act. It will be for the courts to enforce whatever rights or liabilities may flow therefrom.

Contacts

Susan Bincoletto
Director
Intellectual Property Policy Directorate
Industry Canada
Telephone: (613) 952-2527

Danielle Bouvet
Director
Copyright Policy Branch
Canadian Heritage
Telephone: (613) 990-6235

Footnote a

S.C. 2002, c. 26, s. 2(3)

Footnote b

S.C. 1997, c. 24, s. 37(2)

Footnote 1

SOR/89-254