Media Has Stake in NAFTA Renegotiation

Implicates ad dollars, retrans, pay TV ownership and more

Why This Matters

The content community is seizing this moment to affect change in the trade relationship with Canada.

Increasingly contentious negotiations continue over a new North American Free Trade Agreement — they are in round four of the trade slugfest — which covers, broadly, somewhere in excess of a trillion dollars in trade among the United States, Canada and Mexico, the U.S.’s largest trade partners, according to Bloomberg.

But the fine print includes language covering various issues that have media companies eagerly watching, and advocating for, specific outcomes.

For instance: Smaller cable operators have told the U.S. trade representative not to include Canadian retrans payments into a renegotiated NAFTA.

That came in a letter Monday (Oct. 16) to USTR office trade policy staff committee chairman Edward Gresser from the American Cable Association.

The request was a reference to comments from broadcasters who argued that Canadian multichannel video programming distributors should be paying border stations for carrying their signals, likening the current situation to that in the U.S. before the 1992 Cable Act established the retrans-must carry regime.

ACA said requiring Canada’s MVPDs to pay U.S. border TV stations for carriage would mean that Canadian TV stations would start charging American MVPDs for delivering border Canadian stations to their U.S. subscribers, further driving up the price of TV service to consumers. ACA also said broadcasters have oversimplified the complex reciprocal copyright and communications provisions defining their respective rights.

NAB said getting retrans money from Canada would boost investment in content and delivery infrastructure, which would benefit consumers on both sides of the border.

ACA has argued the retrans system is an unfair advantage for broadcasters that leads to higher prices for consumers and not necessarily to the greater investment in programming and localism broadcasters claim.

The cable association added that Canada would also soon be subject to the same retrans blackouts ACA argued have been plaguing the U.S. But broadcasters counter that most carriage deals are struck without incident, and those where impasses occur are simply the expiration of contracts where the MVPD is not willing to pay the price broadcasters argue their must-have programming deserves.

This kind of back and forth regarding NAFTAis hardly reserved for broadcasters and cable operators.

MPAA Worried About Pay TV Impact

The Motion Picture Association of America still has issues with NAFTA’s potential impact on pay TV outlets.

It told the USTR that as previously constituted, Canada put its entertainment beyond the reach of the treaty, so that U.S.

TV and film companies don’t benefit from its market-opening advantages, while Canadian industries have full access to U.S. markets. MPAA suggests this carve-out is unfair and should go. TV and film producers also want Canada to expand ownership opportunities in pay TV. Canada currently limits foreign investment in the pay TV market to no more 46.7%, which MPAA says is a discriminatory limit. It wants a new NAFTA to allow for more direct foreign investment.

Given that a lot of U.S. TV and film production goes on north of the border, it makes sense for U.S. entertainment companies to want a bigger piece of the action. The MPAA also said there should be no Canadian duties on imported digital products.

NFL Seeks More Super Bowl Ad Time

The National Football League is looking to grow the ad pie for Canada’s Super Bowl Sunday, so it has an intellectual property right — or in this case “wrong” — bone to pick.

The NFL said Canada is one of the key markets where it wants to grow the game, but last year Canada took what it called the unprecedented step of restricting the ad revenue from the Canadian broadcast of Super Sunday.

The NFL said Canada has a history of discriminating against U.S. copyright interests and that needs to stop.

The Obama administration raised the issue, but Canada would not relent, so the NFL is hoping this administration can get it to lift the restrictions as part of a new NAFTA agreement.

DGA Seeks Tougher Piracy Protections

The Directors Guild of America doesn’t want any new NAFTA agreement to extend the ISP safe harbor for pirated content.

Sec. 512 of the Copyright Act limits ISP liability for online infringement by sites they provide access to. Sec. 512 requires ISPs to generally expeditiously address piracy, but the Directors Guild doesn’t think that is strong enough and does not want that weakness extended across the border via NAFTA.

But if NAFTA does include an ISP safe harbor, it wants its director/creator members to have an easier means to file takedown notices.