Internet retransmission

18.94 An exclusion from the retransmission scheme is provided by s 135ZZJA of the Copyright Act. This provision states that the pt VC statutory licensing scheme ‘does not apply in relation to a retransmission of a free-to-air broadcast if the retransmission takes place over the internet’ (the internet exclusion).

18.95 In practice, free-to-air broadcasts are generally not communicated on the internet, except in simulcasts by broadcasters themselves, because of the barriers involved in licensing the broadcast and underlying rights.

18.96 The discussion below proceeds on the basis that the existing retransmission scheme remains in place. If the retransmission scheme were repealed, the extent to which internet retransmission occurs would remain determined by market mechanisms. That is, if a broadcaster wished to enter agreements to permit internet retransmission, the broadcaster would have to acquire the relevant rights from all the underlying right holders. If the underlying rights holders only have rights that are defined territorially, then the broadcaster would not be able to confer rights to wider communication. Any retransmission would be confined to territories in relation to which the retransmitter can obtain rights.

History of the internet exclusion

18.97 One government objective of the reforms leading to the retransmission scheme was ‘technological neutrality insofar as retransmission was not confined to any particular means’.[107]

18.98 In the face of concerns about the potential harm caused to copyright owners by internet retransmission,[108] the Government retained the technology-neutral language in pt VC, but introduced the ‘over the internet’ exclusion in s 135ZZJA.[109]

18.99 The concerns about internet retransmission included fallout from controversy involving a Canadian company, iCraveTV, which had commenced internet retransmission of US television signals, resulting in successful litigation by US film studios and broadcasters to prevent it.[110] This highlighted the possible consequences of extra-territorial internet retransmission.

18.100 Concerns about internet retransmission were also reflected in art 17.4.10(b) of the Australia–US Free Trade Agreement (AUSFTA). This provides that ‘neither Party may permit the retransmission of television signals (whether terrestrial, cable, or satellite) on the Internet without the authorisation of the right holder or right holders, if any, of the content of the signal and of the signal’.[111]

18.101 The need for future renegotiation of this provision was anticipated. By mutual side letters, the Australian and US representatives agreed that if, at any time, ‘it is the considered opinion of either party that there has been a significant change in the reliability, robustness, implementability and practical availability of technology to effectively limit the reception of Internet retransmissions to users located in a specific geographical market area’, the parties would negotiate in good faith to amend the agreement in this regard.[112]

Retransmission and the internet

18.102 The reason for excluding internet retransmission from the scheme appears to have been to avoid retransmitted content intended for Australian audiences being disseminated globally without the authorisation of the copyright holders.[113]

18.103 Given media convergence and other developments such as the NBN, the ALRC examined whether the pt VC scheme should apply in relation to retransmission over the internet and, if so, subject to what conditions. Many stakeholders favoured reform in this direction.[114] Media convergence was seen to have rendered the internet exclusion ‘increasingly absurd from a consumer’s perspective, as television services over the internet are often indistinguishable from those not over the internet’.[115]

18.104 The ACCC noted that, as technology continues to develop and consumers become increasingly able to view many ‘different forms of broadcast on different platforms’, it is likely that the pt VC scheme will become even more restrictive. Therefore, the ACCC submitted, amendments to the retransmission scheme need to be considered.[116]

18.105 In the Discussion Paper, the ALRC proposed that the internet exclusion should be repealed and the retransmission scheme amended to apply to retransmission by any technology, subject to geographical limits on reception.[117]

18.106 A number of stakeholders supported the idea that the retransmission scheme should be extended to retransmission over the internet, at least in principle.[118] This view was based on a recognition that copyright law should, ideally, be technologically neutral.[119]

18.107 Telstra, for example, stated that, ‘in the era of media convergence, retransmission platforms should be treated in a technology-neutral way’—but that any extension of the scheme ought to be implemented in a way which addresses the legitimate concerns of rights holders.[120] Some stakeholders highlighted that extending the scheme to retransmission over the internet would ignore important communications law and policy differences between broadcast and internet transmission.[121] Fetch TV, for example, stated:

Delivery via the open, public internet is significantly different to delivery by other forms of transmission and involves significant risks for copyright owners as well as significant challenges for broadcasting policy.[122]

18.108 An extension of the retransmission scheme was seen as being of possible benefit to content providers and the public. The Internet Industry Association stated that internet retransmission would ‘benefit the broadcasters and create technological neutrality between those media organisations able to deliver programmed services over cable and those who wish to do so over the internet’.[123]

18.109 Free TV stated that, in association with the introduction of a must carry regime, content providers ‘delivering linear programmed content by cable, satellite, internet, IPTV or mobile platforms’ should be covered by the retransmission scheme, subject to some ‘reasonable threshold test’.

18.110 Importantly, Free TV submitted that the operation of the pt VC statutory licence should only be available to retransmitters that observe the licence area obligations set out in the Broadcasting Services Act:

Free TV acknowledges that internet retransmissions would require sufficient technological restriction, including geoblocking, in order to observe licence area restrictions. However, the concept of area based licensing is fundamental to the operation of the [Broadcasting Services Act] and to Free TV’s members, and its removal would create serious disruption to the industry.[124]

18.111 Many other stakeholders submitted that internet retransmission should be required to be subject to some form of ‘geoblocking’,[125] including to restrict transmission to the relevant broadcasting licence area.[126] The ABC considered geographically-based limits on transmission as necessary because retransmission should do ‘no more’ than retransmit:

That is, the internet retransmitter should not value-add to the retransmission nor affect the editorial integrity of the content being retransmitted nor impose any editorial content or advertising around the retransmission.[127]

18.112 The extension of pt VC to internet retransmission was opposed by many other stakeholders,[128] primarily because of adverse effects on the commercial interests and existing licensing practices of underlying rights holders.[129]

18.113 Screenrights expressed concern that, while including internet retransmissions in pt VC ‘may fix some anomalies in the scheme for consumers’, it would potentially cause new problems for rights holders:

In particular the sporting bodies are concerned that valuable rights for internet retransmission of events could be undermined by retransmission of these broadcasts over the internet in reliance on an amended Part VC. Such a retransmission would severely undermine the market for a voluntary licence of internet rights for this content. This would be an impediment to the development of digital services for online content.[130]

18.114 These concerns were echoed by sporting bodies themselves.[131] COMPPS stated that extending the retransmission scheme to the internet would ‘allow unlicensed third parties to unreasonably benefit from the valuable copyright content of COMPPS members’. Such a reform would, it was said, allow third parties to ‘free ride’ on copyright content and unfairly prejudice the ability of rights holders, such as Cricket Australia, to sell international media rights.[132]

18.115 The NRL expressed specific concerns about the negative commercial impact of internet retransmission on rugby league rights, especially given that games are shown at different times in different states to maximise potential television audiences.[133] The impact of ‘anti-siphoning’ legislation’,[134] which requires sporting bodies to make much of their content available on free-to-air television, was also emphasised. The NRL stated that, under an extended retransmission scheme, the NRL would be required to make its content available ‘across all platforms, irrespective of its wishes or the commercial consequences’.[135]

18.116 More broadly, the MPAA opposed any extension of the retransmission scheme on the basis that voluntary licensing was the ‘optimal and preferred model’ for managing internet retransmissions and for encouraging new channels for content dissemination. Extending statutory licensing ‘would be a step backward, and an unjustified curtailment of market principles in an area where there is simply no evidence of market failure’.[136]

18.117 Screenrights observed that broadcasting services commonly simulcast their free-to-air channels over the internet and that this is ‘currently managed effectively through voluntary licence arrangements, with broadcasters acquiring additional rights from underlying rights holders to enable web transmission of their broadcasts’.[137]

Removing the internet exclusion

18.118 The ALRC has concluded, above, that the Australian Government should consider repeal of the retransmission scheme for free-to-air broadcasts. An important reason for this recommendation is that the retransmission scheme currently favours some players in the subscription television market over others, depending on the technological platform used (that is, cable and satellite over internet).

18.119 At present, cable and satellite subscription television providers have an advantage over internet content providers in being able to access the pt VC statutory licensing scheme for underlying rights. Ideally, retransmission platforms should be treated in a more technology-neutral way.

18.120 Technological change, including that brought about by the NBN, may make forms of internet retransmission of broadcasts more feasible. If communications policy makers decide that it is important to facilitate the availability of online television, then it would be logical to consider extending the pt VC statutory licence to internet retransmission.

18.121 However, extending the retransmission scheme to the internet raises problems, particularly if geographically limiting retransmission of broadcasts remains an aim of communications policy. The ACMA observed that to extend retransmission to the internet

sets up a potential point of conflict between a geographically-defined licensing scheme under the [Broadcasting Services Act], and the global delivery models for content transmitted over the internet that are not bounded by such geographic limitations.[138]

18.122 At the same time, the future of geographically-based broadcasting licences is unclear. The Convergence Review concluded that, given the increasing availability of internet broadband, content services can be delivered over the internet across Australia and the world and, therefore, it is ‘no longer efficient or appropriate for the regulator to plan for the categories of broadcasting service for different areas and issue licences to provide those services’.[139]

18.123 In the ALRC’s view, the internet exclusion is primarily a matter of communications and media policy, rather than copyright. The Convergence Review noted that emerging platforms, including internet protocol television (IPTV), are not covered comprehensively by existing content regulation and the availability of internet content on smart televisions means that viewers can move easily between ‘regulated broadcast content’ and ‘unregulated internet content’.[140]

18.124 In this context, there are unresolved questions about how IPTV and other television-like online content should be regulated under the Broadcasting Services Act or successor legislation for the purposes of, among other things, imposing content standards and obligations with regard to Australian content. The Convergence Review recommended that new content services legislation should replace the Broadcasting Services Act; and communications legislation should be reformed to provide a technology-neutral framework for the regulation of communications infrastructure, platforms, devices and services.[141]

18.125 Extending the pt VC scheme to retransmission over the internet would also require Australia to negotiate amendments to the AUSFTA.[142] Arguments may be made that excluding the internet from the retransmission scheme is no longer the best means of controlling the reach of retransmission, and that the conditions precedent for renegotiation on this point have been met.[143]

18.126 While arguments may be advanced that, in a converging media environment, the internet exclusion should be removed and replaced so that retransmission platforms are treated in a more technology-neutral way, such a reform faces a number of barriers. It could also cause significant disruption to existing business models—especially as there is a tension between territorially-based copyright licensing and internet dissemination.

18.127 In view of the need for further Government consideration of the issues beyond copyright that such a reform may raise, and possibly to renegotiate provisions of the AUSFTA, the ALRC does not make any firm recommendation about extending the retransmission scheme.

18.128 However, the complexities discussed above reinforce the ALRC’s view that the retransmission scheme is not fit for the future and policy makers should be considering how it might be phased out, rather than extended to other forms of communication.