Allarco Entertainment

Hon. François-Philippe Champagne Minister
Innovation, Science and Economic Development Canada
235 Queen Street
Ottawa, Ontario K1A 0H5

via email: copyright-consultation-droitdauteur@canada.ca

Dear Hon. Minister,

1. We are pleased to file comments in reference to the public consultation entitled: "Consultation on a Modern Copyright Framework for Online Intermediaries".
2. Allarco Entertainment 2008 Inc., is a Canadian broadcaster, which operates four "linear" discretionary (Pay Television) channels: Super Channel - Fuse; Super Channel - Heart & Home; Super Channel - Vault; and the E-sports service - Super Channel - GINX.
3. Allarco, is licensed by the Canadian Radio-television and Telecommunications Commission, pursuant to the Broadcasting Act and the Discretionary Services Regulations.
4. Allarco also provides "Subscription Video on Demand" ("SVOD") programming to its subscribers, in Canada, through licensed Canadian broadcasting distribution undertakings ("BDUs"). The SVOD content, is stored on the servers of BDUs, which include Cable Television companies, IPTV Service Providers, and Direct-to-Home Satellite Television service providers. SVOD programs are streamed - on-demand, directly to Allarco's subscribers, over the BDUs network facilities.
5. Pursuant to the terms of its broadcasting licence, Allarco is required to spend not less than 30% of the previous year’s gross revenues, for the acquisition of Canadian programming.
6. Since commencing operations in 2007, Allarco has spent more than $70 million on Canadian programming.
7. Moreover, Allarco licenses Canadian exhibition rights, for feature films, E-sports, dramatic series, comedy programs, and musical performances, from a variety of international program producers and program distributors.
8. For several years, programming of our discretionary television channels, including our (real-time) linear transmissions and SVOD content, have been pirated by various intermediaries (the "Pirates"). The Pirates, sell our programming in a variety of ways, including direct-to-public sales online, as well as through the use of intermediary sales agents who operate out of retail stores. These sales take place without our consent and no revenue whatsoever is remitted to Allarco.
9. Other intermediaries such as large retail organizations, sell the electronic devices which are capable of intercepting our programming. Their profits are derived from the sale of the electronic devices, rather than the sale of individual subscriptions to individuals. We are providing further details below, regarding the rather complex chain of players engaged in the theft of the intellectual property.
10. The programming is intercepted by Pirates, before being further disseminated, in a number of ways, including the surreptitious use of cable television set-top boxes, IPTV set-top boxes or satellite set-top boxes. The Pirates, in many cases, subscribe to the Super Channel service, through legitimately licensed BDUs - typically purchasing a single monthly subscription to the service. They then utilize the "legitimate" (receiving) devices, to divert the programming content of our service, via the Internet, into servers operated in Canada or off-shore. The content is then delivered by the Pirates, to tens of thousands of illicit subscribers, over the Internet.
11. In some cases, Pirates stream the linear feeds of Allarco's channels, in a manner such that the illicit subscriber is unaware that the content of our programming service has been stolen.
12. The Pirates, also, in some cases make individual programs, stolen from our discretionary television channels, available to individuals "on demand". In other words, the Pirates, stream the programs, and then store the program files in their servers.  The delivery to the illicit subscriber, frequently involves streaming of the (stored) programs, or provision of downloadable files of the programs from the Pirate's server(s).
13. On 29 January 2018, Asian Television Network International Limited filed an application to the CRTC on behalf of itself and a number of other persons (collectively, the FairPlay Coalition) seeking the establishment of a regime that would serve to identify websites and services that are “blatantly, overwhelmingly, or structurally engaged” in copyright piracy and result in a requirement on Internet service providers to block access to such identified sites and services. Allarco was a member of the FairPlay Coalition. The CRTC permitted the public to file comments regarding the application, prior to rendering its decision.
14. On 2 October 2018, in Telecom Decision CRTC 2018-384 the Commission determined^{Footnote 1} it did not have the jurisdiction under the Telecommunications Act to implement the proposed regime and denied the FairPlay Coalition application.
15. In its Decision, the Commission stated in part:

    "... sections 24 and 24.1 of the Telecommunications Act do not contain explicit language conferring copyright jurisdiction on the Commission. The creation of new copyright remedies under the Telecommunications Act in the absence of clear statutory language would conflict with Parliament’s intent in creating an exhaustive copyright code in the Copyright Act."

16. The Commission further stated that

    "...it does not have the jurisdiction under the Telecommunications Act to implement the proposed regime and, consequently, it will not consider the merits of implementing the regime."

17. Based upon the Commission's analysis of the law, in the FairPlay case, it is imperative that the Copyright Act must be amended in order to block access to pirated programming content.
18. As of May 2021, Allarco has invested more than $1 million in pursuit of the Pirates, and has been unable to stop piracy, through Canadian courts. In the course of investigating piracy, we have determined the following:
    1. set-top (Android) devices, are manufactured primarily in Asia and many of the devices come into Canada, pre-loaded with software applications that facilitate illegal interception of programming provided by way of Pirates' servers. Although it is arguable that these devices can be used for some legitimate purposes, such as to stream content from YouTube, the reality is, the devices are being sold to individuals for the primary purpose of piracy of copyrighted content. Clearly, people who wish to legally subscribe to Canadian and foreign OTT services, have a variety of legitimate devices which they can use, such as smart TVs., Apple TV, Roku, FireTV Sticks, etc.
    2. set-top Android) devices are sold through a variety of outlets in Canada including big-box (electronics) stores, independently-owned convenience stores (ie. stores which sell milk, cigarettes, and groceries) located in strip- malls, and independently-owned computer-repair and cell-phone shops, some of which are located within kiosks in shopping malls.
    3. illicit subscriptions to facilitate interception of Allarco's Super Channel service, are sold, through independently-owned convenience stores (ie. stores which sell milk, cigarettes, and groceries) located in strip-malls, and independently-owned computer-repair and cell-phone shops, some of which are located within kiosks in shopping malls. Most of these Pirates receive payment by means of cash.
    4. illicit subscriptions are also available through vendors on-line, through various websites including www.netdeals.com. The sale of illicit subscriptions is done by way of "cash" transfers or other online payment services, (i.e. Interact payments or Paypal). Some individuals engaged in piracy also permit illicit subscribers to charge the "subscription" fees to credit cards.
    5. taxes are not remitted to federal or provincial taxing authorities.
19. As we have described above, piracy is a multi-level business, with various levels of intermediaries superimposed between the individuals who set up the streaming hardware, those who create and disseminate the software programs to facilitate interception of the Allarco channels, and those who interface with the consumers.
20. Pirates, at each level, attempt to cover their tracks, so that the rights holders are frustrated in any attempt to locate their operations. This is done by way of sole proprietorships, off-shore banking, and off-shore physical "bricks and mortar" operations where servers are housed.
21. In the event that servers are physically located within Canada, it is difficult, if not impossible to trace the location of those devices, or the individuals who operate them.
22. Allarco's investigations have also determined that many of the software application programs running on (Android) set-top boxes that have been provisioned for the purpose of piracy, contain malware that can infiltrate other devices (ie. computers, routers, tablets, and mobile devices) which are interconnected to the same network within a household. Allarco provided reports prepared by experts, to the CRTC, in its recent Botnet proceeding. Canadian consumers are largely unaware that the Pirate Devices, can acquire access to their computers, hard drives, home networks, and other (connected) devices within their homes or businesses. These devices can also acquire, and transmit to those off-shore servers, files, documents and other personal information.
23. It is impossible to provide an accurate estimate of the economic harm which has accrued to Allarco and other Canadian broadcasters and Canadian BDUs. In 2017, it was estimated that android Pirate devices had deployment in 7% of Canadian homes.^{Footnote 2} The losses to the Canadian broadcasting system, in 2017 would have been approximately $125 million per month – or $1.5 Billion annually. Since that time the number of households using Pirate Devices in Canada has increased exponentially.
24. The average monthly retail subscription fee, charged by (legitimate) BDUs for the sale of Allarco's Super Channel programming to subscribers is $10.00 per month, plus applicable taxes. We estimate that the annual loss to Allarco, from piracy within Canada may exceed $12 million per year.
25. The website "tagsdeals.com" provides access to pirated programming [see exhibit "A"]. As of May 2021, 167 Canadian and U.S. channels are listed as being available from Tagsdeals.com in the"Diablo Pro Elite" package for only $25.00 CAD per month. We estimate the actual retail value of the pirated programming stolen from Canadian networks, offered in the Diablo Pro Elite package, would exceed $125.00 CAD per month plus additional applicable taxes.
26. The "tagsdeals.com" website appears to be a clearing house for a number of other Pirates which provide programming under the package names of "Alpha TV", "OK2", "OK3" and "IPGUYS".

    The web pages are located at: https://tagsdeals.com/homepage/

27. We are providing screen shots recorded on May 27, 2021, of the pirated channels offered in the Diablo Pro Elite package [Exhibit "B"]. Each of Allarco's channels, along with those of CBC, Crave TV, TSN, Sportsnet and other Canadian broadcasters, are listed as being available in the "Diablo Elite Pro" package.
28. We are also appending in Exhibit "C" the page from Diablo Pro Elite - showing Super Channel's four channels.
29. Allarco attempted to stop the sale of Android set-to-boxes capable of being used for piracy. In May 2021, the Court of Queen's Bench of Alberta dismissed the application for an injunction, notwithstanding considerable evidence that was provided to the Court, regarding the sale of the devices, and the harm which has accrued to Allarco (and other Canadian broadcasters) from the devices being used to pirate Canadian channels.^{Footnote 3} The inability of Allarco to obtain injunctive relief under the current Copyright Act, is illustrative of the shortcomings with the current legislation.
30. In the Consultation Document, at Section 4.41, there is a proposal to establish a statutory basis and procedure for injunctions against intermediaries. This is only one facet of addressing the problem. Most intermediaries, engaged in the piracy of Canadian programming services, are effectively "John or Jane Does".  Their identities are unknown and difficult if not impossible to ascertain. Therefore the (existing) "notice- and-notice regime" is of little or no practicality, in combatting Piracy. Similarly, it is structurally impossible and economically challenging to learn the identity of these John and Jane Does, and thereby bring legal actions against a multiplicity of small business owners, spread out across Canada who sell set-top boxes, and illicit subscriptions.
31. We concur with the Consultation Document, that "...such orders be available, in at least certain cases, without the need to first obtain directly against the alleged infringer or include the alleged infringer as a party to the proceedings. As noted in the Consultation Document, "Many such entities' anonymity and presence outside of Canada exacerbate the usual issues of time, cost and uncertainty in infringement proceedings."
32. In most cases, we believe that the actual server operators, where Allarco's programming services are being pirated, are located outside of Canada, or in physical locations within Canada which are impossible to identify.
33. We believe that the Copyright Act, must be modernized to contain a full toolbox of remedies, such that injunctions can be obtained by Canadian programming services, who have licensed intellectual property from Canadian and foreign producers, without the requirement to provide to the courts, evidence of each agreement for each program licensed. In other words, simply proving that Allarco's "Super Channel" programming channels are offered (without payment remitted to Allarco, or without the authority of Allarco) by an intermediary, by way of a posting on a website, in-store channel listing, or elsewhere, should be adequate proof, in order to obtain a wide-reaching injunction.
34. The reality is, that the intermediaries engaged in the Piracy of Canadian broadcasting services, are not likely to hire counsel to appear in a legal proceeding. These intermediaries are more of less "phantoms" hidden from view or identification. We hold the view that website blocking is, and will continue to be the only effective means of curtailing Piracy. We hold this view for several reasons.  Once a website is blocked or a url is blocked, there is the likelihood that the software application(s) within the illicit set-top-box will malfunction. This will over time frustrate end-users who purchase illicit subscriptions.
35. Injunctions issued against intermediaries, must also be capable of impacting anyone who advertises, promotes or offers for sale, Pirated services or devices which are utilized for piracy.
36. In Toronto, a number of third-language radio stations, broadcast (paid) commercial advertising on behalf of intermediaries who are engaged in Piracy. We are aware of attempts to contact station management, in order to curtail the promotion and sale of pirated programming and set-top-devices. Radio stations' management, has in the past refused to take action. Their refusal to remove these advertisements for pirated programming subscriptions are not within the purview of the Canadian Radio-television and Telecommunications Commission or the Canadian Broadcast Standards Council. It is ironic, that two Canadian bodies that have the ability to review and regulate the content of Canadian broadcasters, do not have the inclination to stop broadcasters from promoting piracy. It is our view, that injunctions against intermediaries should be capable of extending to any broadcaster, print publisher, or website publisher, or social media publisher, who publishes such advertisements, or otherwise promotes websites or stores where pirated subscriptions are sold
37. We note that the full list of (prior) conditions (to obtain an injunction) set out at page 18, of the Consultation Document, are in most cases not achievable nor realistic. Providing prior notice to John and Jane Doe intermediaries, is, as noted above, a virtually impossible task, given the multiple levels of intermediaries involved in signal Piracy, where many elements are located off-shore.
38. The issue of proving "irreparable harm" (item (d) on page 18), is in our view an impossible hurdle. There is simply no way that Allarco or any other Canadian broadcaster could recoup its losses, against hundreds if not thousands of independent corner-store operators who sell set-to-devices and/or facilitate subscriptions, nor off- shore Pirates who operate in virtual anonymity. The harm is real - the mere existence of Allarco's channels on the Pirates' websites, and within the software applications, is prima facie proof that the harm is real and financially consequential.
39. We believe that the Copyright Act, should provide for a rapid process, adjudicated by a single-purpose, independent body, which could adjudicate applications for web-site blocking by ISPs and "de-indexing" by search engines. We concur that setting out these remedies in legislation, could save parties from unnecessary litigation. To be blunt, we do not believe that off-shore Pirates have any fear whatsoever of "risk of litigation". Their actions belie the fact that they are litigation proof.
40. We concur with the recommendation at paragraph 4.4.2 of the Consultation Document. There must be a reduction of the burden of proof on a plaintiff seeking to establish that a person has provided online or other network services primarily for the purpose of enabling infringement. We also concur that there should be an update of criminal offences under the Act, to encompass streaming services for commercial purposes. That would, in our view, make it less difficult for rights holders to prevail against infringers such as tagsdeals.com, GoldTV, etc.

We appreciate the opportunity to provide comments in this proceeding and will provide the Department with any further information which it may require to complete its deliberations.

Yours truly,

Don McDonald
President and CEO
Allarco Entertainment 2008 Inc.

Attachments:

• Exhibit “A” Tagsdeals Website
• Exhibit “B” Diablo Elite Pro TV Package
• Exhibit “C” Super Channel linear feeds on Diablo Elite Pro Package

Exhibit "A" To The Submission By Allarco Entertainment 2008 Inc.

Pages From The Piracy Web Site "tagsdeals.com" - May 2021

Exhibit "B" to the Submission by Allarco Entertainment 2008 Inc.

Web pages from Piracy site "tagsdeals.com" - May 2021

Canadian Television Services Which Are Being Pirated & Offered in the Package "Diablo Pro Elite" are Listed.

Exhibit "C" To The Submission by Allarco Entertainment 2008 Inc.

Pages From The Piracy Web Site "tagsdeals.com" - May 2021 Web Page - Listing 4 Channels Which Are Being Pirated From Allarco's Super Channel TV Service Which Are Offered In The "Diablo Pro Elite" Package