Net TV firm faces new government foes

Toronto-based JumpTV is hoping to take advantage of Canadian copyright law that may allow it to put television online without broadcasters' permission. A similar company went out of business last year after being sued by TV companies, but JumpTV is seeking Canadian copyright authorities' permission first.

Media companies attempting to block JumpTV's plans have drawn some potentially powerful allies inside the Canadian government, however. Two agencies respectively devoted to national industry and culture have sent a letter to broadcasters saying that the law might need to be changed to block widespread Internet distribution.

"The government of Canada is committed to ensuring that Canadian copyright law and policy continue to provide a strong foundation for the creation and the dissemination of Canadian cultural content and the promotion of the knowledge economy," read the letter, jointly signed by Industry Canada Deputy Minister V. Peter Harder and Canadian Heritage Deputy Minister Alex Himelfarb.

"As a result, the Copyright Act may need to be amended to address, among other things, the opportunities and challenges of the digitally networked environment," the letter continued.

Canada's copyright law includes a loophole that Net companies have hoped to exploit to bring live TV from U.S. and Canadian companies to the Web, over broadcasters' protests. Government action to change this law would shield broadcasters' businesses on both sides of the border, allowing them to keep control of their content.

The coalition of media companies fighting JumpTV's plans welcomed the apparent bolstering of their efforts in official circles.

"We are enormously encouraged by the fact that (these agencies) have recognized the seriousness of the threat to Canada's culture from unauthorized Internet exploitation," said Epitome Pictures Executive Vice President Stephen Stohn, speaking for the Media Content Coalition. That group includes Canadian broadcasters, movie studios and film distributors.

"But we cannot allow people to make money from our productions without our consent and ruin our market for these productions all over the world by abusing a possible loophole in the law," Stohn said.

For its part, JumpTV warned that the government appears to be making up its mind on the issue before letting copyright authorities finish their interpretation of existing law. Cable and satellite TV companies already distribute broadcast television without permission, and Net companies shouldn't be treated any differently, said CEO Farrel Miller.

"To suggest that delivering existing TV channels over an alternative medium is a threat to Canadian culture is ludicrous," Miller said in a statement. "It would be troubling that the federal government would so directly acquiesce to an industry's self-serving interest without regard to hearing from competing interests."

JumpTV plans to offer the live TV service to Canadians only, using technology designed to determine Web surfers' location. Broadcasters are skeptical whether this technology can work well, however.

The Internet company has not said when it plans to launch the live TV service, which would include U.S. broadcasts from networks such as Fox, ABC and NBC. Both sides have filed with Canadian copyright authorities seeking a decision on the law later this year.

The two Canadian agencies said in their letter to broadcasters that they would release a "consultation paper" on the issue in the next few months. The agencies will likely recommend that Net transmissions be excluded from ordinary broadcast licensing laws or that new restrictions be imposed on Net companies, they said.