The unanimous Supreme Court decision that it is illegal to sell equipment to receive satellite signals from outside Canada is a tremendous victory for Canadian broadcasting, the President of Bell ExpressVu, Canada’s premiere satellite television broadcaster said today.
Posted on April 26th, 2002
Clearly, we are pleased by the verdict. It supports our efforts to establish that the radiocommunications Act accurately reflects the underlying Canadian broadcasting policy, said David McLennan, President and Chief Operating Officer of Bell ExpressVu.
Mr. McLennan said that the establishment and maintenance of a broadcasting policy that ensures Canadians are able to tell their own stories and to see programming created by and for Canadians is a key feature of our national heritage and of government policy.
The black and grey satellite markets were a direct threat to that policy, Mr. McLennan said.
A survey for the Canadian Cable Television Association has estimated that between 520,000 and 700,000 Canadians — the equivalent of all cable
subscribers in the Atlantic provinces — are using unauthorized satellite systems, switching off the Canadian broadcasting system and plugging into the
That was undermining the Canadian broadcasting system, cheating rights holders, creators, actors, technicians and others of their lawful compensation, Mr. McLennan said.
The unauthorized satellite systems also put at risk the Canadian broadcasting industry’s investments to build high-quality television services for Canadians, Mr. McLennan said. Illegal systems were resulting in a loss
of customers for legitimate, licensed Canadian services, resulting in a revenue loss estimated at $325 million annually, across the industry.
This decision will end that illegal activity and enable Bell ExpressVu to continue to make investments for the future while providing Canadians with tremendous choice in their television programming through the best digital TV service in Canada, said Mr. McLennan.
Ian Gavaghan, Bell ExpressVu Vice President and General Counsel, said the Court’s decision means that the Radiocommunication Act does, indeed, outlaw
the unauthorized decoding of an encrypted signal.
There can now be no doubt that satellite piracy is theft, which robs all Canadians — but particularly artists, producers, programmers and broadcasters — of hundreds of millions of dollars a year, Mr. Gavaghan said.
As of today there is absolutely no question that stores selling grey and black market equipment are breaking the law. We expect this illegal selling
will end today, Mr. Gavaghan said. We expect the Federal government will immediately respond to this ruling by aggressively enforcing the legislation in order to ensure that this problem is addressed.
With over one million customers, Bell ExpressVu is Canada’s leader in digital home entertainment and broadcasts over 275 video digital channels to an 18-inch dish — the smallest in Canada. Bell ExpressVu was launched in September 1997 and since then has become the digital TV leader in Canada. Bell ExpressVu is a limited partnership, wholly owned by BCE Inc.
Media Backgrounder –
Bell ExpressVu’s position on Satellite TV Piracy
Bell ExpressVu believes that allowing an unregulated, unlicensed parallel broadcasting industry to exist in Canada will undermine the ability of the regulated industry to compete, ultimately destroying the Canadian industry to the detriment of all Canadians.
Unauthorized satellite systems result in significant losses to legitimate licensed Canadian services. Further, they undermine the Canadian broadcasting system by cheating rights holders, creators, actors, technicians and others of their lawful compensation. Both the Canadian satellite and cable industries continue to invest significant funds in their respective services —
investment that is at risk if unauthorized systems are allowed to continue to operate.
1. The goal of Canadian broadcasting policy
The Broadcasting Act states that the Canadian broadcasting system serves to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada. The aim of broadcasting policy is to foster a broadcasting system that is distinctly Canadian by encouraging the development of Canadian expression, by providing a wide range of programming
that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming and by offering information and analysis concerning Canada and other countries from a Canadian point of view.
Under the Broadcasting Act, the Canadian Radio-television and Telecommunications Commission (CRTC) is responsible for regulating the broadcasting system with a view to implementing the policy set out in the Act, The CRTC ensures that Canadians continue to enjoy access to creative and original Canadian television and radio programs using various distribution
technologies. In short, Canadian community standards govern how Canada’s airwaves are used.
A Canadian distributor, like ExpressVu, receives a license from the CRTC to legally broadcast in Canada. With it come many obligations to support Canadian broadcasting policy. Pirate services are not licensed, nor do they have any of the obligations concerning Canadian broadcasting policy.
2. Distribution Rights
Television distribution rights are typically sold by territory. Rights to distribute programming are sold for Canada and the USA independently. Anyone
who has purchased distribution rights suffers financial loss if the same program provided on a U.S. satellite signal is decoded in Canada, and nobody is paid when the signals are stolen in the Black market.
Sections 9(1)(c), (d) and (e) of the radiocommunication Act, as well as the right of civil action under section 18 of that Act, are part of the legal
framework that fosters respect for distribution agreements to the benefit of the Canadian entertainment and broadcasting industry. They also serve to meet Canada’s North American Free Trade Agreement (NAFTA) obligations.
3. The Scope of the Problem
A survey for the Canadian Cable Television Association estimated that between 520,000 and 700,000 Canadians are using unauthorized satellite
This is not an insignificant problem — 520,000 to 700,000 unauthorized systems is the equivalent of all cable subscribers in the Atlantic provinces switching off the Canadian broadcasting system and plugging into the U.S. network.
Star Choice and Bell ExpressVu have each committed $1 billion to building a Canadian satellite service. The cable industry continues to invest in the roll out of digital cable. DTV / HDTV is touted as a harbinger of the future.
All of these efforts are at risk if unauthorized satellite systems are allowed to continue across Canada.
These unauthorized systems result in a loss of customers for legitimate, licensed Canadian services, resulting in a revenue loss estimated at $325
million annually, and undermine the Canadian broadcasting system, cheating rights holders, creators, actors, technicians and others of their lawful compensation.
This activity creates a second unregulated broadcasting industry — one that does not have to adhere to the same requirements, regulations and
restrictions as Canadian distributors. Canada no longer has the ability to control its airwaves, and determinations about what they watch aren’t made by
4. The Problem is growing
A few Canadians have chosen to pay for their U.S. DTH services but even in this circumstance, they are not paying the legal holder of the rights to that programming in Canada. In order to receive the service, those few lie to their U.S. supplier about where they live. U.S. DTH suppliers have indicated time and again that they would not knowingly provide the service to Canadians.
However, the real problem is the widespread underground distribution network in Canada of devices used to steal U.S. DTH programming, and the so-called
grey market is a Trojan horse for this vastly bigger, black market problem.
The last year has been a window of opportunity for retailers of equipment to receive unauthorized U.S. DBS Services. This window opened because of some adverse legal interpretations of the Radiocommunications Act,
one of which ExpressVu is now appealing to the Supreme Court of Canada.
Retailers now openly sell pirate devices for stealing U.S. DBS programming: they dishonestly market the DirecTV and EchoStar brands.
Customers are attracted by the free stolen programming.
5. What Needs to Be Done
Obviously, if there is a loophole in the law, it should be closed. And it is important to act quickly. In addition, it is important that enforcement of the law is made a priority of the Federal government.
Satellite Piracy Glossary of Terms:
Black Market – Refers to the theft of programming services from DTH providers, by using various means intended to prevent or circumvent the proper operation of the Conditional Access system. Black Market equipment providers typically charge a single fee for the IRD and Smart Card, intimating that programming received by the user is free.
Conditional Access system – Is the name given to that portion of the IRD which encrypts and decrypts the video and/or audio signal. It usually consists of software resident in the IRD, working with a Smart Card inserted in the IRD. There are three major CA systems in use in North America: the NewsData Corp system used by DirecTV, the NagraVision system used by Echostar and Bell ExpressVu, and the General Instrument system used by Star Choice and C-Band
DBS (Direct Broadcast Satellite) – The transmission of audio and video signals via satellite directly to the end user. Typically used to refer to high-powered BSS satellites.
DTH (Direct to Home) – Official term used by the Canadian Radio Telecommunication Commission referring to the satellite television broadcasting industries. Bell ExpressVu is licensed as a DTH Broadcasting Distribution Undertaking (BDU)
Encryption, Decryption – Encryption is the process of electronically altering a video and/or audio signal from its original condition to prevent unauthorized reception. Decryption is the process of returning the video
and/or audio to its original condition. In the digital television transmission industry, encryption differs from the older scrambling technology associated with analogue transmissions which created a wavy, colour-shifted picture.
Electronic Counter Measures (ECM) – These are electronic attacks generated by DTH service providers intended to prevent the operation of Black Market hacked IRDs.
Encoding – is the process of transferring an analogue signal to a digital format.
Grey Market – This term refers to the practice of using equipment to receive DTH programming services from a service provider who is not licensed to provide those services within a specific geographical area. Typically, this is achieved by a practice of subterfuge whereby the prospective subscriber adopts a false mailing address and other indicia to represent themselves as resident in the territory for which the DTH service provider is legitimately licensed to provide service.
Hacker – A person who has sufficient computer literacy to access and use available software tools to set up an operating Black Market system. Hacking
refers to the act of modifying legitimate IRDs and/or Smart Cards in order to prevent or circumvent the proper operation of the Conditional Access system in
the IRD. Some Hackers sell such Black Market systems to individuals.
IRD (integrated Receiver Decoder) – A device capable of receiving, tuning and decoding DTH signals. Where an IRD includes a Conditional Access System,
it also decrypts signals.
Scrambling – Altering an analog video signal transmission so it can not be received without an authorized operating decoder.
Satellite Antenna (Dish) – A parabolic antenna which collects and focuses satellite signals. C Band antennas range in size from five to eight feet in diameter, and Ku-Band antennas range from 18 inches to five feet.
Programming Undertaking – A company which produces, packages or distributes video, audio and/or data services for distribution by DTH satellite DTH Distribution undertakings.
Smart Card – Technology which allows for the upgrade of encryption security through the use of a consumer installable card containing a new computerized security code.
Video Compression – Technology which significantly reduced the bandwidth and/or data required to transmit a video signal, making possible the carriage of numerous NTSC quality signals on a single satellite transponder. MPEG-2 (Moving Picture Experts Group) is the standard utilized by DTH broadcasters.
Satellite Delivery Technologies:
C Band – (3.7 – 4.2 GHz) – Satellites operating in this band can be spaced as close as two degrees apart in space, and normally carry 24 transponders operating at 10 to 17 watts each. Typical receive antennas are 6
to 7.5 feet in diameter. More than 250 channels of video and 75 audio services are available today from more than 20 C-Band satellites over North America.
Virtually every cable programming service is delivered to cable television head-ends via C-Band.
Ku-Band – The 117-12.7 GHz (Gigahertz) frequency band. This band has been split into two segments. The first is the 117-12.2 GHz band known as FSS (Fixed Satellite Service). The 12.2-12.7 GHz segment is known as BSS (Broadcasting Satellite Service).
Fixed Satellite Service (FSS) Ku-Band (11.7-12.2 GHz) – Satellites operating in this band can be spaced as closely as two degrees apart in space, and carry from 12 to 24 transponders which operate at a wide range of powers.
Typically, FSS Ku operates at a medium power level which requires a larger dish antenna to be effective. Typical receive antennas are two to three feet
in diameter. More than 20 FSS Ku-Band satellites are in operation over North America today, including several hybrid satellites which carry both C-Band
and Ku-Band transponders. Star Choice uses FSS Ku-Band technology.
Broadcasting Satellite Service (BSS) Ku-Band (12.2-12.7 GHz) Satellites operating in this band are spaced nine degrees apart in space, and normally carry 16-32 transponders which operate at powers in excess of 100 watts. Due to the orbital spacing these satellites can operate at high power settings and therefore typical receive antennas are only 18 inches in diameter. A total of 32 DBS channels are available at each orbital position, which typically allows for delivery of some 250 video signals where digital compression technology is employed. Bell ExpressVu uses high power BSS Ku-Band.