Focus: Full Court clarifies online content delivery
28 March 2013
In brief: A unanimous decision of the Full Federal Court means that online simulcasts of radio programs are not 'broadcasts', meaning traditional radio broadcasters will need to obtain separate licences from, and pay additional royalties to, copyright owners to transmit radio programs on the internet. Partners Ian McGill (view CV) and Miriam Stiel (view CV) and Senior Associate Nathan Shepherd report on the case and its ramifications.
- The appeal finding
- Issues considered by the Full Court
- The future of media reform
How does it affect you?
- The decision in Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Ltd  FCAFC 11 confirms that online simulcasts of radio programs are not 'broadcasts' for the purposes of the Copyright Act 1968 (Cth).
- Traditional radio broadcasters will be required to obtain separate licences from, and pay additional royalties to, copyright owners for the purpose of transmitting radio programs on the internet.
- The decision qualifies the scope of the definition of 'broadcasting service' under the Broadcasting Services Act 1992 (Cth), making it clear that the definition does not encompass online content delivery platforms.
- The decision also has ramifications for the application of other parts of the Copyright Act that use the definition of 'broadcast', such as the time-shifting exception in section 111 considered in the Optus TV Now case.
- The decision proves the point that the existing broadcasting legal framework concepts are ill suited to online delivery of content. The decision correctly focuses on a regulatory framework that regulates platforms and not content. However, it is to be hoped that a future Government will revisit media reform and some of the key recommendations of the Convergence Review, including that the focus of regulation should be on content rather than platforms.
The Phonographic Performance Company of Australia (PPCA) is the Australian copyright collecting society for sound recordings. PPCA and Commercial Radio Australia (CRA) entered into an industry agreement on 16 June 2000, under which PPCA granted to CRA's member radio stations a licence to broadcast sound recordings in Australia. From about 2001, some CRA members simulcast radio programs, including sound recordings, on the internet at the same time as broadcasting those radio programs over the broadcasting services bands (in this case, FM radio).
On 3 February 2010, PPCA commenced proceedings against CRA, seeking declarations that the communication of sound recordings over the internet by CRA members was outside the scope of the licence granted under the industry agreement. At first instance, Justice Foster found for CRA, dismissing the proceeding. PPCA subsequently filed a notice of appeal and the Full Court decision was handed down on 13 February 2013.
The Full Court unanimously upheld the appeal and overturned the first instance decision of Justice Foster. In doing so, the Full Court found that the broadcast of radio programs using the broadcasting services bands was a 'broadcasting service' that fell within the scope of the licence granted by PPCA. However, the simultaneous communication of the radio programs over the internet was a separate and distinct service that fell outside the scope of the licence granted by PPCA.
The key issue considered by the Full Court was the construction of the definition of 'broadcasting service' in s6(1) of the Broadcasting Services Act, having regard to a Ministerial determination made on 12 September 2000 (the Ministerial determination) that excluded a service from that definition if the service made television or radio programs available 'using the internet'. Having provided for that exclusion, the Ministerial determination then excepted some services from the exclusion: namely, a service 'that delivers radio programs using the broadcasting services bands'.
CRA contended that the relevant 'broadcasting service' was the delivery of radio programs irrespective of the platform or means of delivery. CRA argued that when radio stations delivered the same radio program simultaneously using the FM radio frequencies and the internet, they were still doing so as one 'broadcasting service' that used the broadcasting services bands. On that construction, the Ministerial determination did not operate to exclude those activities from the definition of a 'broadcasting service'. That is, that the radio stations were within the exception to the exclusion in the Ministerial determination.
The Full Court rejected this argument and noted that each commercial broadcasting licence held under the Broadcasting Services Act is restricted to a fixed geographical area within Australia, whereas access to the internet can be obtained not just in Australia, but globally. The Full Court drew attention to the practical difficulties that would be faced if CRA's construction were to be adopted. If CRA members were to provide commercial radio broadcasting services by way of the internet, they would be providing those services outside the licence area, which could potentially result in a breach of their geographical licence restrictions.
The court upheld PPCA's construction and found that the delivery of the radio programs using the broadcasting services bands was a separate service from the delivery of the radio programs over the internet. The former was a 'broadcasting service' under the Broadcasting Services Act, whereas the latter was a separate service that had been excluded by the Ministerial determination and thus fell outside the scope of the licence granted by PPCA.
The Full Court decision has significant ramifications for broadcasters and content providers. The decision clarifies that online content delivery will not be considered to be a broadcasting service even in circumstances where it is delivered simultaneously with other content on broadcasting services bands by an entity holding a broadcasting services bands licence (for example, a commercial radio or television broadcasting licence).
Notwithstanding this clarification, there remains some uncertainty regarding the scope of the exclusion provided under the Ministerial determination, particularly in circumstances where content is delivered online over a closed network. This issue was not considered in this proceeding but is likely to be an issue arising in the context of other online delivery platforms, such as IPTV.
Another important consequence of the Full Court decision is the need to qualify the scope and meaning of the term 'broadcast' wherever it is used in the Copyright Act. By way of example, the time shifting exception in s111 of the Copyright Act, which was one of the key sections of the Copyright Act considered in the Optus TV Now proceeding, only applies to the making of films or sound recordings of 'broadcasts'. On the basis of the reasoning of Justice Foster at first instance, s111 may have applied to the making of a sound recording of a radio program communicated over the internet in circumstances where the same content was delivered over traditional broadcasting services bands. However, the effect of the Full Court decision is to restrict the operation of the exception under s111 solely to broadcasts that are not delivered over the internet. This may be the subject of recommendations by the Australian Law Reform Commission, as part of its inquiry into Copyright and the Digital Economy and potential legislative reform.
The Convergence Review had a central recommendation that regulation should focus on significant enterprises (content service enterprises) that control professional media content, irrespective of the platform used to deliver the content. Another key recommendation from the Convergence Review was that the broadcasting licence regime, including its focus on the provision of services within a licence area, be removed altogether. The Ministerial determination merely papered over an outdated regulatory structure and, while the Full Federal Court's analysis was undoubtedly correct, the linguistic and syntactical contortions involved in the judgment [see paragraphs 60-71 inclusive of the judgment] prove the point that we need a new regulatory structure for the Australian media.
- Ian McGillPartner,
Ph: +61 2 9230 4893
- Miriam StielPartner, Practice Leader, Intellectual Property, Patent & Trade Mark Attorneys,
Ph: +61 2 9230 4614
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