FairPlay Coalition presses on with web-blockiing plan with official response

[Len]

Content piracy is real, it’s growing, it’s costly, it harms individual Canadians, companies and the economy – and we should be taking a new and reasonable step towards curbing it, reads the FairPlay Canada Coalition’s official response to all of the interventions filed in reaction to its January proposal.

The 30-member coalition is a collection of Canadian artists, content creators, unions, guilds, producers, performers, broadcasters, distributors, and exhibitors who have proposed the CRTC establish something called the Independent Piracy Review Agency (IPRA), which would assist the Regulator in identifying websites blatantly engaged in content theft – and then have ISPs block access to them in Canada.

The CRTC opened a Part I process and as we have reported, there has been opposition to the proposal, some of which was not very well informed, or is downright misleading, which Monday’s FairPlay reply to the Commission outlines in detail.

Studies (including a new one filed by the coalition) show that content theft via foreign-based pirate sites is a growing problem which syphons hundreds of millions of dollars away from legitimate Canadian businesses and content creators and “(e)ffectively no contrary studies or data on the extent of piracy in Canada were put on the record by opposing interveners, and the few criticisms leveled at those above were simply inaccurate and based on fundamental errors in understanding and applying the data,” reads the reply filed Monday with the Commission by FairPlay Canada.

According to that filing, “reasonable steps to disable access to piracy sites reduces visits to those sites by between 70% and 90%, reduces total piracy by up to 51%, and increases visits to legal websites (ignoring the likely significant impact on other legal products and services such as traditional TV and DVDs) by between 8% and 12%. Studies, courts, and academic work also specifically confirm that for the average user this type of regime remains effective even in light of the availability of VPNs and other technologies that could theoretically be used to circumvent it.”

Plus, according to new research from Armstrong Consulting which the coalition commissioned and filed with its reply, “the number of subscribers lost to BDUs as a result of television program piracy ranges from 583K to 974K,” it reads. “The BDU revenue reduction, which equals the total estimated negative economic impact of television program piracy, ranges from $455M to $761M. The reduction in contribution ranges from $23M to almost $38M. The reduction in affiliation payments to Canadian television services ranges from $158M to $264M.65.”

Netflix and Amazon have said piracy could cost them $50 billion between now and 2022, adds the submission.

While some opponents insist Canadian copyright law already can be used to combat pirates, the coalition agreed that was true, as far as the ones who are Canadian and operate here. However, when it comes to those operating outside of Canada, our laws won’t have any effect and a new approach is needed. “That is why regimes like the one proposed are being adopted in most of Canada’s peer countries,” reads FairPlay’s reply.

“(C)onventional domestic copyright law alone cannot effectively address the problem of piracy on telecommunications networks,” adds the document. “First, pirate operators can remain totally anonymous online while conventional legal action requires that the operator be identified in order to obtain effective relief. Second, pirate operators can operate in Canada from jurisdictions in which Canadian law cannot be effectively enforced, rendering conventional legal action pointless. Third, even if these obstacles can be overcome there is a structural imbalance between the time and resources required to shut a pirate site down through conventional legal action and the ease with which another site can emerge. Fourth, even aside from all these obstacles, pirate operators typically are unable to compensate their victims.”

Some interveners filed submissions because they were whipped into a frenzy by certain individuals and organizations who sowed fear about the possibility legitimate sites would be unilaterally blocked by Canadian ISPs, something no one is contemplating, reminded the reply. Besides being illegal, blocking legitimate sites would just be bad business, too.

IPRA would target only sites and services “that are blatantly, overwhelmingly, or structurally engaged in piracy,” says the submission. “This is a deliberately high bar intended to capture only sites that the IPRA and Commission will easily recognize as indefensible. The coalition does not intend or expect that it would or could apply to the legitimate platforms (such as Snapchat, Google Drive, or YouTube) identified as a concern by interveners nor to VPN and similar services used for legitimate privacy-protection or other purposes. There is no evidence to suggest the Commission would do any differently.”

The coalition pointed to the estimated losses to piracy of just one Canadian title in its reply, New Metric Media’s Letterkenny, which is CraveTV’s original content hit. “In their intervention New Metric indicates that Letterkenny has been downloaded more than 1.5 million times in Canada, and CraveTV confirms that a significant portion of those downloads are of entire seasons or the entire series, such that the data show that approximately 500,000 households have downloaded every single episode of the show. Those households could subscribe to CraveTV to watch the show at a cost of approximately $0.30 per episode; the economic impact of them instead relying on piracy is approximately $4 million per month or as much as $48 million per year for this one title,” it says.

As well, Waterloo-based network intelligence firm Sandvine also filed a new Canadian-specific report which made clearer the depth of the problem, notes the coalition’s reply. Sandvine “confirms that illegal Kodi piracy add-ons are in regular use in 7% of Canadian households (higher than 6% in the United States) and that illegal subscription TV services are regularly accessed in up to 8.3% of Canadian households (higher than 6.5% in North America as a whole),” reads the submission. “Accordingly, with data specific to Canada it is clear that pirate operators make content available illegally in up to 15.3% of households (which would be more than 2 million households) using one these two forms of dedicated set-top-box piracy. Sandvine's intervention also confirms that these piracy services ‘have grown rapidly after having no adoption five years ago’ and that this level of piracy ‘should also be considered a floor and not a ceiling’ because it does not capture all forms of piracy.”

The FairPlay Coalition reply did offer a concession to small ISPs when it comes to costs. Its research says Domain Name System (DNS) blocking is expected to cost ISPs between $18 and $36 to disable access to a pirate site, which is not a large sum, but the coalition said it realizes that could be a challenge for smaller ISPs and so it proposed small ISPs be able to charge a fee to block pirate sites, should the IPRA plan go ahead.

The Commission has not yet indicated whether or how this application will proceed beyond this or if it will become a full public hearing.

That said, one parliamentary committee, the Standing Committee on Access to Information, Privacy and Ethics, filed a report last week noting concern that the FairPlay proposal somehow violates the principles of net neutrality.

This idea is a red herring, says the FairPlay reply to the Commission (while not referencing the committee report). The proposal (which was likely not read by any members of the committee) is instead “designed to ensure ISPs remain neutral intermediaries who never exercise control over or influence the purpose or meaning of the content they carry, but simply implement legal obligations imposed by the Commission,” says the coalition to the CRTC.

Neither the ISPs nor the content owners whose content is being pirated would be in charge of making any decisions. IPRA, as contemplated, would deploy piracy site evaluation criteria developed together by ISPs, rightsholders, consumer advocacy and citizen groups for consideration by the Commission in a follow-up proceeding to this one.

“ISPs would have no ability to act unilaterally or to determine which sites are and are not treated as piracy sites under the regime,” continues the FairPlay reply. “This is entirely in keeping with the principled, flexible approach to net neutrality that the Commission has adopted and that has widely been considered a success.”