TORONTO and GATINEAU – Ethnic Channels Group Ltd. has lobbed pretty serious accusations at VMedia Inc., alleging the company is using the public Internet to deliver TV services and that it’s distributing unauthorized foreign services to its subscribers. VMedia says ECGL has all it all wrong.
Now though, the CRTC has decided to hear more fully from both parties. In a letter posted on its website on May 5, the Commission has removed VMedia’s applications for additional BDU services in several Atlantic Canadian markets as well some in Quebec, Alberta and Saskatchewan, as well as a national video on demand licence from a hearing lineup scheduled for Toronto on May 13. The applications, which were originally non-appearing items, will now be dealt with at a later date.
VMedia, a licensed BDU, is being put to the test by ECGL for what the latter considers practices that run afoul of regulations under the Broadcasting Act and the Copyright Act. ECGL alleges that VMedia is essentially an Internet retransmitter, using the public Internet to deliver authorized as well as unauthorized services to Canadians through an integrated approach enabled by its VBox Internet gateway and IPTV set top box.
In an intervention filed with the Commission in early April, ECGL notes that VMedia’s IPTV service is nothing like the closed systems offered by Bell Canada’s Fibe or Telus Corp.’s Optik TV. Rather, the company argues that VMedia uses the public Internet to distribute its programming instead.
“There will be no need for any BDU, or any person offering programming, to comply with any Canadian regulatory requirements to deliver any programming service to Canadians.” – ECGL
ECGL says in its submission that if the CRTC accepts VMedia’s distribution model, the implications for all Canadian programming services will be profound. “There will be no need for any BDU, or any person offering programming, to comply with any Canadian regulatory requirements to deliver any programming service to Canadians,” it argues, adding that later in its intervention that this would be contrary both the Broadcasting Act and by Parliament pursuant to the Copyright Act.
ECGL claims VMedia and its transmission agents promote in an integrated manner, licensed BDU services with those that are unauthorized for distribution in Canada. It says “there is no practical distinction, at the retail level, between the licensed BDU service and the portion of the service that is offered without regard to CRTC rules,” adding that this also includes the distribution of programming without having first obtained the rights or permissions from third parties.
In addition to using the open Internet to deliver TV services, ECGL argues that VMedia and its agents are distributing unauthorized foreign content to their subscribers. ECGL points to bestrussiantv.com as an example. TV Novosti also filed an intervention arguing that VMedia hasn’t obtained the rights to distribute Russia TV.
Awarding licences for VMedia’s proposed services would “legitimize the unauthorized distribution” of “scores of non-Canadian television services,” argues ECGL, with the ultimate effect of enabling other Canadian and non-Canadian BDUs to replicate VMedia’s model.
In its reply to the ECGL intervention, VMedia tells the CRTC that it should take ECGL’s allegations with a grain of salt and that they have no “substance to them.” As a first point, the company notes that while its service may not be identical to those offered by Bell and Telus, it’s by no means using the public Internet to deliver TV programming to customers.
VMedia suggests that ECGL is distorting the Commission’s definition of an exempt service under the Digital Media Exemption Order.
“In effect, ECGL has taken a description of a donut hole and, from that, attempted to describe the colour and taste of the donut. ECGL’s logic is not merely strained, it is non-existent,” – VMedia
“In effect, ECGL has taken a description of a donut hole and, from that, attempted to describe the colour and taste of the donut. ECGL’s logic is not merely strained, it is non-existent,” says VMedia.
It also notes that accessing TV programming over the public Internet requires the use of a web browser and entering a URL. Its customers don’t do this, adds VMedia. The company acknowledges some of its 22 agents that offer BDU services are ISPs and those agents may develop additional services and provide them to their customers.
“The only video programming that VMedia provides to customers are the BDU services that are authorized under its licence from the Commission,” the company underscored.
In essence, VMedia is arguing that it only offers licenced BDU content to its subscribers, but its sales agents are free to do whatever they wish to and that could be promoting over the top access to unauthorized Canadian content. “If ECGL has an issue with the rights to ‘over the top’ video programming services offered by VMedia’s agents or by bestrussiantv.com, then ECGL should complain to them,” it tells the Commission. “The actions of bestrussiantv.com or any agents are simply not relevant to VMedia’s applications.”
ECGL however, claims that VMedia and bestrussiantv.com are run by the same people. “What is alarming is that bestrussiantv.com is related directly and, to the best of ECGL's knowledge, owned and likely managed by the same principals that own and operate VMedia. Indeed, the very same equipment that is used to provide illegal Russian television signals is used to provide the V Media licensed BDU service,” reads the ECGL intervention.
With respect to the distribution of Russia Today, however, VMedia points to a 2011 agreement that its controlling shareholder Content Media Rights Inc. signed with TV Novosti giving it the right to distribute the program.
The Commission will take up the VMedia applications, “at a later date” says the CRTC site.
