Legal Analysis and Discussion From A Geek's Point of View: February 2013

By Karl Schaffarczyk, University of Canberra

Online streaming of radio broadcasts may be a thing of the past after the Full Federal Court yesterday handed down a ruling that will result in radio stations paying higher royalties to the recording industry.

The Phonographic Performance Company of Australia (PPCA), on behalf of recording artists and music labels, won a declaration that internet simulcasts of radio programs fall outside the definition of a “broadcast” under the Copyright Act and are therefore not covered by existing licences granted to commercial radio networks.

Following on from a failed High Court bid to increase license fees, legal action was initiated in 2010 by PPCA to separate licensing for online radio programs from traditional broadcasts.

The PPCA’s purpose seems to be clear: to create a new revenue stream from online license fees. This was at a time PPCA was aggressively pursuing increases in their revenues, such as fee increases of 4,729% for operators of cafes and gyms.

Meet the players

The PPCA is one of a number of copyright collecting societies: when anyone plays recorded music such as a CD, MP3 or music video in public, permission must be obtained from the person or company that owns the copyright of that recording.

The PPCA represents many copyright holders – both record labels and individual artists. It is then the job of the PPCA to issue licenses for the public performance of recorded music, and to collect license fees and return those to the copyright holder.

Commercial Radio Australia (CRA) is the peak body representing commercial radio industry interests in Australia – it claims to represent 99% of commercial radio stations.

In short, if you listen to commercial radio then the chances are the radio station is a member of CRA.

Let the battle commence

In 2000, on behalf of its members, CRA obtained an “umbrella” license granting each member a license to broadcast recorded music, and those arrangements remain in place today.

At the time, radio stations making their broadcasts available online was a new thing, and it’s likely online content was not contemplated as a threat in the context of the agreement.

During 2010 the PPCA claimed that a CRA member radio station – NovaFM – had breached copyright in a work managed by the PPCA.

The argument was that NovaFM had played a song that was both transmitted on the usual FM band and simultaneously made available on the internet. The PPCA claimed the broadcast license issued to CRA members did not cover broadcasts also being made available online.

The PPCA based its claim of breach by referring to the wording of their agreement, which permitted members to broadcast licensed material. They went on to point out that making content available on the internet was not broadcasting, and therefore not covered under the terms of the license.

When is a broadcast not a broadcast?

In September 2000 the then-Minister for Communications, IT and the Arts Richard Alston made a determination that excluded certain services being defined as a broadcast, namely:

a service that makes available television programs or radio programs using the internet, other than a service that delivers television programs or radio programs using the broadcasting services bands.

Making an adjustment for the double negative (making an exception to an exclusion in the determination), we might interpret this to include as a broadcast:

a service that makes available … radio programs using the internet and delivers … radio programs using the broadcasting services bands.

In February 2012, when this case was first brought before the Federal Court, Justice Foster agreed with CRA’s reasoning on this point and dismissed the PPCA’s case on the grounds that a simulcast radio program was a broadcast, whether delivered using radiowaves or online.

The appeal to the Full Federal Court, explained

Yesterday’s ruling by the Full Federal Court overturned last year’s single judge ruling. Justices Emmett, Besanko and Yates took up the argument put forward by PPCA relating to legislative reforms designed to regulate datacasting (adapting broadcast services to provide internet) as being the motivating intention behind the issue of Minister Alston’s determination.

Streaming radio online and on devices may become a thing of the past. ahunziker

On this basis, the judges considered that delivery of radio and television programs could be categorised in three ways:

be delivered by the use of any means, including the broadcasting services bands
be delivered or made available using the internet
be delivered or made available using the internet and the broadcasting service bands

The Court found the radio program by NovaFM was supplied to the public by two simultaneous but separate services: the first being a traditional radio broadcast falling into the first category, and the online version fitting the second category, but accordingly not a broadcast.

Some lingering static

In accepting the PPCA’s interpretation of the ministerial determination being for the purpose of regulating datacasting, we encounter wild inconsistencies within the law.

Viewed through this lens of regulation of datacasting, the ministerial determination effectively makes any television or radio programs delivered over the internet fall into the category of a broadcast if the internet service over which it is delivered is a datacasting service (for example wireless internet using the analogue TV spectrum).

Yet the same television or radio programs delivered on any other form of internet access (such as ADSL broadband) is not a broadcast.

Effectively the ruling is saying that regulation is not applied on basis of content, or the originator of the content, but in how that content is delivered to a consumer, including distinguishing between methods of accessing the internet.

Regulating television and radio in this fashion simply cannot serve any useful purpose.

That said, if we consider the ministerial determination through a lens of regulating incumbent broadcasters while not stifling progress, efficiency and innovation, we find that radio and television programs can still be categorised in the same three ways. With the results being, respectively:

incumbent broadcasters are caught and continue to be regulated
“new media” services including YouTube, online movie and music services are not considered to be “broadcast” services, and so are not subject to broadcast regulation
incumbent operators who simultaneously broadcast and stream their content are subject to technology-neutral regulation as broadcasters – without this provision, radio and television services would be subject to two distinct regulatory schemes. This may yield unexpected results – e.g. doubling of compliance costs, and doubling of sanctions for content which may breach a law

Stay tuned

Due to the high stakes involved it will be very surprising if the CRA does not seek leave to appeal to the High Court.

Without a successful appeal against this court ruling, the PPCA is now in a position to demand fees above the present 1% regulated fee from any radio station that makes its broadcast stream available online.

Given recent PPCA demands of huge increases in license fees for other users of recorded music, a likely scenario is that many broadcasters will simply stop making their content available online.

Karl Schaffarczyk does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published at The Conversation. Read the original article.

By Karl Schaffarczyk, University of Canberra

The ongoing copyright arms race between content owners and internet users has taken a new turn. Israeli firm Hola! has recently launched a suite of products that are variously designed to bypass geoblocking and accelerate internet-access speeds.

Hola! is the brainchild of entrepreneurs Derry Shribman and Ofer Vilenski. They have set out to fundamentally change the way the world wide web operates by creating software which makes the web more efficient and harder to censor.

Hola! is comprised of several products:

Browser extensions which work on Windows and Mac with Google Chrome and Mozilla Firefox. These plugins only bypass geoblocking.
Client software for Windows which functions as web accelerator, geoblock bypass, and censorship bypass service.
An Android app which operates as a web accelerator only.

Hola! bypasses restrictions on sites which are usually geoblocked. http://www.Hola.org

BBC iPlayer, Hulu, Netflix … and VPNs

Catchup TV and online movie services such as BBC iPlayer, Hulu, Netflix and many others use geoblocking – and so are not available from within Australia.

But circumvention of these geoblocks is commonplace with the use of a Virtual Private Network (VPN) or proxy server. During the London Olympics the media was awash with stories of people using these methods to access the BBC’s online coverage of the Games.

These VPNs and proxy systems are either subscription services, or they operate on a freemium model where a limited or ad-supported version of the product or service is given away in the hope of selling consumers a “full” version of the product.

VPNs were designed as a way of securely connecting a remote computer to a corporate network, and using a VPN is a rather clumsy method to access multimedia content. All traffic is routed through the VPN which may limit access to other services, and the VPN needs to be connected and disconnected to various servers to access content in different countries.

Hola! is different

Not only is Hola! free, but it’s different to other services because it utilises peer-to-peer technology, where traffic is not re-routed through central servers but via other computers which have the Hola! Windows client installed.

This peer-to-peer nature will make it difficult for Hola! to be blocked in the same way Hulu has blocked some VPN and proxy services.

The Hola! browser extension is also by far the simplest and most elegant method to bypass geoblocks. The inflexibility and complications which come with setting up a VPN or altering rarely-changed DNS settings can limit the function of a computer for everyday use.

Once Hola! is installed, its function can be toggled from an icon in the browser.

Is Hola! legal?

Most people are familiar with technological protection measures (TPM) in the form of region coding on DVDs. Those TPMs try to prevent the disc being copied and try to prevent playback in a place other than the market in which the disc was sold.

Region coding allows Hollywood to segment global markets, releasing movies to one market at a time, maximising the effect of promotional campaigns, for instance.

Geoblocking is used by the entertainment industry to perpetuate this same market segmentation online – which includes Australians paying higher prices. For example, the American service Netflix at $US7.99/month compares poorly with local Quickflix at $A14.99/month.

Geoblocking is a technological protection measure but due to a special exemption in the definition of TPMs in the Copyright Act, it is not illegal to break TPMs that prevent the playback in Australia of a film obtained from outside Australia – so long as it is a non-infringing copy.

While using a region-free DVD player clearly falls within this exemption, bypassing geoblocks remains an untested grey area.

In August 2012, consumer advocacy group Choice highlighted this grey area in a submission to the Attorney General’s Review of Technical Protection Measure exceptions.

The grey area centres on whether video streaming can be considered a “non-infringing copy”. When users sign up to a service – let’s take Netflix as our example – they agree to Terms and Conditions that include a clause on geographic limitations:

Geographic Limitation: You may instantly watch a movie or TV show through the Netflix service only in geographic locations where we offer our service and have licensed such movie or TV show …

The interpretation of this clause of the Terms and Conditions, and the weight given to respecting these must be weighed against the intent of the exemptions in the Copyright Act.

This is critical in deciding whether or not accessing movie content from Australia will be defined as a “non-infringing copy”.

Facebook in China, Twitter in Tehran, YouTube in Pakistan … or Gmail at the office

Social media services are censored or completely blocked in many countries, and most large workplaces limit access to various websites for security and productivity reasons.

The tools used to bypass these blocks to date include the US Navy-developed high security router software TOR, VPNs and other security software.

Hola! explained.

While these might be appropriate for some uses, they are complicated to use and are overkill for an individual who just wants the freedom to talk to their friends on Facebook.

The Hola! client software makes bypassing these blocks trivial. When a user wants to visit a blocked site, the Hola! client takes that request, encrypts it and sends it to another computer with Hola! installed.

That second computer works as a proxy by then decrypting the request and then accessing the relevant service. The resulting content is again encrypted by the second computer and forwarded to the original user.

For speed and efficiency, the Hola! client will use several proxies – with each handling a small part of the traffic.

The lack of a central server in a peer-to-peer model such as this means that Hola! is difficult to block – a successful blocklist would need to be constantly updated and could run to thousands of internet addresses as it would need to block every user of the Hola! client.

Bypassing government censorship is widely accepted as a good thing – at least in western democracies.

Hola! is yet another example supporting American innovator John Gilmore’s famous quote: “the Net interprets censorship as damage and routes around it”.