15.86 Section 135ZZJA of the Copyright Act provides 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).
15.87 The following section discusses the internet exclusion and its underlying rationale. In a converging media environment, arguments may be advanced that the internet exclusion from the remunerated retransmission exception should be removed and replaced so that retransmission platforms are treated in a more technology-neutral way.
15.88 The ALRC proposes that the remunerated exception in relation to underlying rights should be amended by removing the internet exclusion and replacing it with provisions that require that any retransmission be subject to technological measures that limit communication to within Australia.
15.89 The discussion proceeds on the basis that either the existing retransmission scheme is to remain in place, or is to be modified by repealing the free-use exception for broadcast copyright and replacing it with a statutory licence (that is, Option 2 above).
15.90 In contrast, if Option 1 were implemented, the extent to which internet retransmission occurs would be entirely determined by market mechanisms. 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 broader communication. Any retransmission would have to be confined to territories in relation to which the retransmitter can obtain rights. Geoblocking (discussed below) would be a matter for negotiations between the parties.
History of the internet exclusion
15.91 Professor David Brennan has stated that one government objective of the reforms leading to the retransmission scheme was ‘technological neutrality insofar as retransmission was not confined to any particular means’. He stated that, in the face of concerns about the potential harm caused to copyright owners by internet retransmission, the Government retained the technologically-neutral language in pt VC, but introduced the ‘over the internet’ exclusion in s 135ZZJA.
15.92 These 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. This highlighted the possible consequences of extra-territorial internet retransmission.
15.93 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’.
15.94 The need for future re-negotiation of this provision was, however, 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.
Retransmission and the internet
15.95 The ALRC noted, in the Issues Paper, that 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.
15.96 Given media convergence and other developments such as the NBN, the ALRC asked whether the pt VC scheme should apply in relation to retransmission over the internet and, if so, subject to what conditions.
15.97 Many stakeholders favoured reform in this direction. 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’. The Australian Directors Guild observed that with ‘the advent of IPTV, Apple TV and the like it is almost impossible to distinguish signals transmitted over the Internet with those using broadcast spectrum’.
15.98 The Australian Competition and Consumer Commission (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.
15.99 CRA stated that the commercial radio industry believes that any retransmission scheme should be extended to include the internet because exclusion ‘would lead to the internet being either unregulated, or would make it subject to a different set of regulations’, creating another layer of regulation that would further complicate the copyright licensing system.
15.100 Optus stated that the internet exclusion in relation to free-to-air television broadcasts has created ‘significant legal uncertainty around transmission technologies such as IPTV and mobile devices using WiFi’ and that this has an adverse impact on the provision of content services:
Without the protection afforded to retransmissions under Part VC, it is not commercially feasible to offer FTA broadcasts over the internet including over WiFi—and because Optus is unable to re-transmit over WiFi, it is not commercially feasible to re-transmit the full suite of FTA channels over Mobile TV.
15.101 Optus supported the extension of the pt VC scheme to apply to ‘all rebroadcasting, regardless of the delivery platform or viewing device’, and stated that it was fundamental to the success of such a regime that rights holders are prevented from obtaining ‘separate royalties for the same content for each delivery method or means of viewing the content’.
15.102 Other stakeholders opposed any extension of pt VC to internet retransmission. One reason was the perceived need to maintain territorial exclusivity in licensing. The Motion Picture Association of America (MPAA) noted that internet retransmission, unlike broadcast and subscription cable television, is ‘inherently global in nature’:
The resulting demise of the system of territorial exclusivity would decimate the value of broadcast programming and create chaos in the marketplace.
15.103 Similar concerns about territorial licensing were also expressed by stakeholders who did not necessarily oppose reform of the internet exclusion, and are discussed below in relation to the ‘geoblocking’ of internet transmissions.
15.104 More generally, stakeholders expressed concern that removing the internet exclusion would undermine their commercial interests. The Australian Football League (AFL) stated that to permit unauthorised third parties ‘to retransmit on or via the internet and pay nothing or a statutory licence fee would undermine the exclusive granting of rights and inevitably result in a significant financial detriment of copyright owners such as AFL’.
15.105 The National Rugby League (NRL) compared the resulting situation to the problems for copyright owners caused by the Optus TV Now technology. In particular, the NRL submitted that, given the purpose of the retransmission right, there ‘seems to be little justification in the scheme permitting the retransmission of copyright content over mobile telephone networks’. The AFL also expressed concern that where content is broadcast on a delay into a particular market internet retransmission using an earlier free-to-air broadcast in another market ‘would allow for earlier communication into delayed markets despite, and in breach of, agreements with local broadcasters’.
15.106 While broadcasts are generally geographically limited in scope, the internet is a global system for the communication of copyright materials. Geoblocking refers to the practice of preventing internet users from viewing websites and downloading applications and media based on location, and is accomplished by excluding targeted internet addresses.
15.107 Some stakeholders considered that the expansion of the pt VC scheme should take place on the basis that retransmissions are available only within Australia. That is, expanding statutory licensing of retransmission to the internet may require technological means to limit communication, such as ‘via a closed or managed IPTV environment, or necessitating the use of geoblocking to limit distribution within a licensed geography’.
15.108 Many stakeholders submitted that that internet retransmission should be required to be subject to geoblocking. Telstra observed that it should not be necessary to introduce a ‘specific geoblocking condition for internet retransmission’ because an organisation would be bound by the requirements of the licence to make ‘whatever technical arrangements are necessary to restrict its supply to that licence area’.
15.109 Screenrights identified that one option for maintaining geographical control of retransmission would be to require retransmitters to ‘ensure that any retransmission is appropriately geoblocked to the original broadcast territory as a condition of relying on the pt VC licence’. It submitted that geoblocking technologies ‘have advanced significantly since 2004, to the extent that television-like services are routinely made available over the internet in reliance on these technologies including ABC’s iView service, Hulu, iTunes and Netflix’.
15.110 The MPAA cautioned that geoblocking may not be the solution to problems resulting from internet retransmission. Although copyright holders who license copyright materials for internet retransmission commonly impose access controls, which may include a geographic component:
there is a world of difference between requiring geoblocking in the context of comprehensive access control obligations that the licensor can require its contract partner to enforce, and reliance upon geoblocking alone as carried out by a statutory licensee over which the copyright owner has, as a practical matter, far more limited leverage.
Existing licensing practices
15.111 There were also concerns that any expansion of the pt VC scheme should not trespass on existing licensing practices. ARIA, for example, noted that the music industry already licences websites that communicate audiovisual material containing sound recordings over the internet, and ‘believes that such voluntary licensing schemes are the optimal and preferred model’.
15.112 Screenrights noted 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’. Screenrights also expressed concern about internet retransmitters ‘cherry picking’ broadcasts of certain major events (such as the Olympics) for the statutory licence fee, which could be significantly lower than a commercial fee.
15.113 Screenrights concluded that, while it believed the internet exclusion to be an anomaly, ‘including internet retransmissions in Part VC (subject to geoblocking) would only create more problematic issues for rightsholders by seriously undermining their capacity to enter voluntary arrangements for internet retransmission’.
15.114 The existing retransmission scheme covers only the retransmission of broadcasts in an unaltered and simultaneous manner, which would appear to rule out ‘cherry picking’ the retransmission of certain events; and does not cover simulcast.
Removing the internet exclusion
15.115 The starting point for reform of the internet exclusion is whether geographically limiting retransmission of broadcasts remains an aim of communications policy and, if so, whether there is a better way to frame the scheme to facilitate that goal. As discussed above, Option 2 assumes that there is a continuing need to facilitate the retransmission of free-to-air television and radio broadcasts, either to ensure access to free-to-air broadcasting or to facilitate market entry by new content service providers.
15.116 Technological change, including that brought about by the NBN, may make forms of internet retransmission of broadcasts more feasible. However, 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. 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, so that broadcasters cannot block the provision of new content services.
15.117 Issues then arise about the need to limit retransmission geographically, including because of the territorial nature of underlying rights and to comply with obligations under the AUSFTA, assuming that this is to be renegotiated. These issues would include whether to restrict retransmissions:
to broadcasting licence areas, as is the case with retransmission and broadcast copyright, or to ‘Australia’ or some other formulation;
by geographic location where the retransmission is received, or by where the subscriber is ordinarily resident—that is, should a person who becomes a subscriber to an internet television service be able to receive retransmissions when they are overseas?
15.118 In relation to broadcast generally, the Convergence Review concluded, with the increasing availability of broadband, content services can be delivered over the internet across Australia and the world, and that 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’.
15.119 Assuming the way is made open to remove the internet exclusion, determining exactly how reform should be implemented would require further detailed consideration. For example, repeal of s 135ZZJA might be ‘subject to ensuring any retransmission is appropriately geoblocked, and subject to the exclusion of retransmissions that can and should fall within voluntary licensing regimes’.
15.120 The removal of the internet exclusion may also mean new Copyright Tribunal cases on appropriate levels of remuneration under pt VC. In relation to remuneration, the Copyright Tribunal has concluded that the benefits to subscription television consumers of the retransmissions, and therefore the value of those retransmissions to subscription television companies, are best described under the heading of ‘convenience’—the advantage to consumers of only having to use one remote control to access subscription and free-to-air channels. While assessment of remuneration has been based on the value to retransmitters—which has been equated with the convenience to consumers—with online retransmission there is more potential for mobile access and the value to consumers may be very different.
15.121 The ALRC proposes that retransmission ‘over the internet’ should no longer be excluded from the statutory licensing scheme applying to the retransmission of free-to-air broadcasts in pt VC of the Copyright Act. Rather, the retransmission scheme should be amended to apply to retransmission by any technique, subject to geographical limits on reception.
15.122 Exactly how these geographical limits should be defined is yet to be determined. At present, the Copyright Act does not place geographical limits on the statutory licence for retransmission. At the least, it should be a condition of the statutory licence that retransmission be limited to Australia. Such a provision should, however, not prescribe the technological or other measures by which such limits are effectively imposed.
15.123 Extending the pt VC scheme to retransmission over the internet would involve Australia negotiating amendments to the AUSFTA. However, 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 in this side letter have been met. The ALRC’s final Report may suggest that the Australian Government seek to negotiate an amendment to remove art 17.4.10(b) from the AUSFTA.
15.124 More generally, the ALRC is interested in comment on the ramifications of removing the internet exclusion and any consequential amendments to the retransmission scheme that may be necessary. For example, existing provisions require that retransmission in relation to a broadcast means ‘the content of the broadcast is unaltered (even if the technique used to achieve retransmission is different to the technique used to achieve the original transmission)’. Where retransmission takes place over the internet there may need to be some room for minor alterations in the content of the broadcast, if only to take account of different formats. For example, if free-to-air broadcasts are viewed through a web browser there may be some unavoidable alteration in content.
15.125 In making its proposal, the ALRC recognises that it can be argued 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’.
15.126 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.
15.127 The current retransmission provisions may be seen as favouring some players in the subscription television market, depending on the technological platform used (that is, cable and satellite over internet). Removing these provisions may favour the internet as a content platform and raise general regulatory issues, including the future of broadcast licensing, which cannot and should not be solely resolved the context of reform of copyright laws.
Proposal 15–2 If Option 2 is enacted, or the existing retransmission scheme is retained, retransmission ‘over the internet’ should no longer be excluded from the statutory licensing scheme applying to the retransmission of free-to-air broadcasts. The internet exclusion contained in s 135ZZJA of the Copyright Act should be repealed and the retransmission scheme amended to apply to retransmission by any technique, subject to geographical limits on reception.
Question 15–1 If the internet exclusion contained in s 135ZZJA of the Copyright Act is repealed, what consequential amendments to pt VC, or other provisions of the Copyright Act, would be required to ensure the proper operation of the retransmission scheme?
 D Brennan, ‘Is IPTV an Internet Service under Australian Broadcasting and Copyright Law?’ (2012) 60(2) Telecommunications Journal of Australia 26.1, 26.8.
 See, eg, Parliament of Australia, House of Representatives Standing Committee on Legal and Constitutional Affairs, Report on the Copyright Amendment (Digital Agenda) Bill 1999 (1999).
 See the legislative history summarised in D Brennan, ‘Is IPTV an Internet Service under Australian Broadcasting and Copyright Law?’ (2012) 60(2) Telecommunications Journal of Australia 26.1, 26.8.
 See Ibid, 26.8.
 No such restriction applies to radio, and the US has established a statutory licence for internet retransmission of radio broadcasts: Copyright Act 1976 (US) 17 USC ss 112, 114. The ability to do so was preserved by Australia-US Free Trade Agreement, 18 May 2004, , ATS 1 (entered into force on 1 January 2005) art 17.6.3(c). See also K Weatherall, ‘The Impact of Copyright Treaties on Broadcast Policy’ in A Kenyon (ed) TV Futures: Digital Television Policy in Australia (2007) 242.
Australia-US Free Trade Agreement, 18 May 2004, , ATS 1 (entered into force on 1 January 2005), side letter dated 18 May 2004, .
 Australian Law Reform Commission, Copyright and the Digital Economy, IP 42 (2012), . See, D Brennan, ‘Is IPTV an Internet Service under Australian Broadcasting and Copyright Law?’ (2012) 60(2) Telecommunications Journal of Australia 26.1, 26.8, 26.9.
 Australian Law Reform Commission, Copyright and the Digital Economy, IP 42 (2012), Question 36.
 See, eg, SPAA, Submission 281; Music Council of Australia, Submission 269; Internet Industry Association, Submission 253; SBS, Submission 237; Australian Directors Guild, Submission 226; Telstra Corporation Limited, Submission 222; Australian Copyright Council, Submission 219; Australian Broadcasting Corporation, Submission 210; NSW Young Lawyers, Submission 195; Optus, Submission 183; Commercial Radio Australia, Submission 132. Some stakeholders stated that they were not opposed in principle to such reform, but considered it a matter of broadcast rather than copyright policy: Foxtel, Submission 245; News Limited, Submission 224.
 Screenrights, Submission 215.
 Australian Directors Guild, Submission 226.
 ACCC, Submission 165.
 Commercial Radio Australia, Submission 132.
 Optus, Submission 183.
 COMPPS, Submission 266; NRL, Submission 257; AFL, Submission 232; Cricket Australia, Submission 228; Australian Film/TV Bodies, Submission 205; Motion Picture Association of America Inc, Submission 197.
 Motion Picture Association of America Inc, Submission 197.
 AFL, Submission 232.
 NRL, Submission 257.
 AFL, Submission 232.
 Definition of ‘geo-blocked’ PC Mag, E-encyclopedia <www.pcmag.com/encyclopedia> at 25 February 2013.
 See, eg, ARIA, Submission 241; PPCA, Submission 240.
 Ericsson, Submission 151.
 Internet Industry Association, Submission 253; ARIA, Submission 241; SBS, Submission 237; Screenrights, Submission 215; Australian Broadcasting Corporation, Submission 210.
 Telstra Corporation Limited, Submission 222.
 Screenrights, Submission 215. However, Screenrights opposed including internet retransmissions in pt VC: Screenrights, Submission 288. ARIA also acknowledged that it may ‘now be technically possible to restrict access to internet retransmission services to users located within Australia’: ARIA, Submission 241.
 Motion Picture Association of America Inc, Submission 197.
 ARIA, Submission 241. See also PPCA, Submission 240.
 Screenrights, Submission 215.
 Screenrights, Submission 288.
Copyright Act 1968 (Cth) s 10, definition of ‘retransmission’.
Broadcasting Services Act 1992 (Cth) s 212(1)(b).
 Australian Government Convergence Review, Convergence Review Final Report (2012), viii.
 Screenrights, Submission 215.
Audio-Visual Copyright Society Limited v Foxtel Management Pty Limited  ACopyT 1 (1 June 2012), .
 The Broadcasting Services Act provides, in relation to the free-use exception, that retransmission must be within the relevant broadcasting licence area: Broadcasting Services Act 1992 (Cth) s 212(1)(b).
Australia-US Free Trade Agreement, 18 May 2004, , ATS 1 (entered into force on 1 January 2005).
 Screenrights, Submission 215.
Copyright Act 1968 (Cth) s 10, definition of ‘retransmission’.
 Australian Government Convergence Review, Convergence Review Final Report (2012), 40.
 Ibid, 106–107.