TORONTO – VMedia Inc. isn’t bowing to pressure from Bell Media to remove CTV and CTV2 from its live TV online streaming service. After Bell sent the company a cease and desist letter on September 29, VMedia followed up with a lawsuit, launched on October 3.
The independent ISP and broadcast distribution undertaking (BDU) unveiled its new TV streaming service on September 16. For $17.95 per month, Canadians can get 20 live TV channels, including all the major TV networks in Canada and the U.S., over a Roku video streaming player or on a Roku TV.
VMedia says “the Service allows Canadians who do not wish to change Internet providers, or who do not want to purchase or rent a device which they do not otherwise want, to get a ‘skinny’ basic television package at the lowest cost and least inconvenience possible.”
Bell, however, contends that VMedia is infringing on its CTV and CTV2 content by streaming it to customers as an over the top (OTT) service. Based on conversations with VMedia as well as publicly available information, Bell alleges the service isn’t covered under the Broadcast Distribution Regulations and is illegal.
In the September 29 letter to the independent carrier, Bell writes that because “the service is not offered over a private managed network, does not use an Internet connection offered by VMedia or its agent, and does not distribute all services licensed for mandatory carriage as part of the base service,” VMedia doesn’t have the legal authority “to distribute or retransmit in the service Bell Media’s broadcast signals, specialty service or copyrighted programs without authorization.”
VMedia counters that its streaming TV service “is a lawful retransmission of signals” and therefore doesn’t infringe on Bell’s copyright. In essence, it sees itself as a virtual cable operator and is also working to bring specialty services into the Roku-delivered service, too. It has The Weather Network already on board. Some other independent broadcasters we talked with since VMedia's Roku-launch are quietly backing the VMedia approach, but are so far taking a wait-and-see stance publicly. As well, sources have told Cartt.ca that Canada’s two other large broadcasters, Corus Entertainment and Rogers Media, will also launch legal or regulatory challenges to VMedia’s new service.
In its lawsuit, VMedia argues it is not an OTT offering, doesn’t require an exemption under the Digital Media Exemption Order and that, rather, VMedia is a retransmitter and as a BDU is entitled and required “to retransmit local and regional over the air services such as the channels that comprise the CTV and CTV2 networks. This entitlement and requirement arise under the Broadcasting Act and the Broadcast Distribution Regulations, not the Exemption Order.”
Section 31(2) of the Copyright Act, says VMedia, explains that it’s not copyright infringement when a retransmitter communicates to the public by telecommunications any literary, dramatic, musical or artistic work if five conditions are met. They are: the communication is a retransmission of a local or distant signal; the retransmission is lawful under the Broadcasting Act; the signal is retransmitted simultaneously and without alteration; royalties be paid for distant signals; and it complies with conditions of the Copyright Act.
The company argues when reading section 31(1) and (2) of the Copyright Act together, they “create an exception to the exclusive right of the copyright owners” of works “to control the communication of their works to the public by telecommunication.”
So, because VMedia’s service meets all five conditions in section 31(2), “Bell has no right to prohibit” the retransmission of its signals in VMedia’s service.
VMedia has over 20,000 total ISP and TV customers, primarily in Ontario. While the company can not yet say how many customers it will have for its new Roku-delivered service, company advisor George Burger told Cartt.ca that the new app has been downloaded “thousands” of times as people take advantage of a free trial “and we think most of these people are cord-cutters, because they already have a Roku (device),” he said.
In a statement to Cartt.ca late Monday evening, a Bell Media spokesperson said more action will be taken against VMedia in the form of an injuction which we have not yet seen. "VMedia is distributing CTV and CTV Two signals outside of its licenced broadcast business and without Bell Media's consent. It’s a clear copyright violation and we asked them to stop. They refused, so we’re asking for a court injunction to end the copyright infringement," said the spokesperson in an email.
There will be much more to come on this.
With files from Greg O'Brien
