Phonographic Performance Co of Australia Ltd v Commercial Radio Australia Ltd

7/28/2019 Phonographic Performance Co of Australia Ltd v Commercial Radio Australia Ltd

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Phonographic Performance Co of Australia Ltdv Commercial Radio Australia LtdSiabon Seet and Will Aplin GILBERT + TOBIN LAWYERS

Take-away tips

Broadcasters should not assume that their licence

to broadcast copyright material covers all com-

munication platforms they should obtain sepa-

rate rights to cover online streaming services.

Commercial radio broadcasters now compete on a

level playing field with providers of internet-only

radio programs when seeking licences to stream

sound recordings.

Licences for streaming sound recordings online

are not subject to the 1% cap that applies to

broadcasts.

Broadcasters require licences to stream certain

sound recordings online including those solely

connected with the United States which are not

required for broadcasting those sound recordings

over the airwaves.

Why the case is importantThe unanimous decision of the Full Court of the

Federal Court in Phonographic Performance Co of

Australia Ltd v Commercial Radio Australia Ltd1 pro-

vides some much-needed clarity on what constitutes a

broadcasting service in the Broadcasting Services

Act 1992 (Cth) (BSA). More specifically, the decision

answers the question: When a commercial radio station

streams a radio program to the public over the internet at

the same time as it broadcasts that program over the

airwaves, is the internet stream also a broadcast within

the meaning of the Copyright Act 1968 (Cth)?The court found on appeal that such internet streamed

transmissions, known as internet simulcasts, were a

separate service from the traditional radio broadcasts,

and that this separate service was not a broadcasting

service within the meaning of the BSA and, therefore,

not a broadcast under the Copyright Act.

This case represents another decision of the Full

Court, following last years ruling in National Rugby

League Investments Pty Ltd v Singtel Optus Pty Ltd,2

confirming that a desire for technological neutrality will

not override the legislatures intention to treat internet

deliveries as a separate activity, requiring separate rights,from traditional terrestrial broadcasts.

The decision directly affects commercial radio broad-

casters and sound recording copyright owners, as it

confirms that the copyright owners can seek a separate

fee for internet transmissions. It also has the potential to

impact other broadcasters (such as television broadcast-

ers) and other copyright owners who grant licences forthe broadcast of their works. Any licence to broadcast

(within the meaning of the Copyright Act) matter would

exclude internet simulcasts.

However, there are some aspects of the dispute, as

explained below, that are unique to the issue of broad-

casting sound recordings due to some specific provisions

in the Copyright Act.

What the dispute was aboutThe court was asked to decide the meaning of the

word broadcast within the Copyright Act because the

appellant, Phonographic Performance Company of Aus-

tralia Ltd (PPCA), had granted licences to commercial

radio broadcasters through an industry agreement (Agree-

ment) with the representative body, now called Com-

mercial Radio Australia Ltd (CRA), which permitted

CRAs members to Broadcast certain sound record-

ings to the public.

The term Broadcast in the Agreement was defined

by reference to the definition of broadcast contained in

the Copyright Act from time to time. That definition

relevantly provided that a broadcast was a communi-

cation to the public delivered by a broadcasting servicewithin the meaning of the Broadcasting Services Act 1992.

Therefore, the court was required to consider the

meaning of broadcasting service in the BSA, which

relevantly states:

broadcasting service means a service that delivers

radio programs to persons having equipment appropriate

for receiving that service, whether the delivery uses the

radiofrequency spectrum, cable, optical fibre, satellite or

any other means or a combination of those means, but does

not include:

(c) a service, or a class of services, that the Minister

determines, by notice in the Gazette, not to fallwithin this definition.3

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The Minister had determined on 12 September 2000

that the following class of service did not fall within the

definition of broadcasting service:

A service that makes available radio programs using theInternet, other than a service that delivers radio pro-grams using the broadcasting services bands

(Ministerial Determination).

Sometime after the Agreement was made, some of

CRAs members began simulcasting their programs on

the internet.

PPCA relied on the Ministerial Determination to

assert that these internet simulcasts were not a broad-

casting service, as they were a service that makes

available radio programs using the Internet but they

were not a service that delivers radio programs using

the broadcasting services bands (BSBs) the BSBs

being part of the radiofrequency spectrum usually dedi-

cated for broadcasting television and radio.

On 3 February 2010, PPCA filed proceedings in the

Federal Court seeking declaratory relief only.

While the Agreement provided the context for the

dispute, the case was primarily one of statutory construc-

tion regarding the meaning of broadcasting service

and the Ministerial Determination.

Contrary to what has been suggested by other com-

mentators,4 the dispute could not have been avoided by

simply drafting the Agreement differently. Section 109

of the Copyright Act provides a statutory licence forthe broadcast of published sound recordings in certain

circumstances. Absent an agreement that covered internet

simulcasting, a broadcaster could have relied on s 1095

and claimed that its internet simulcasts were broad-

casts and thus covered by the statutory licence and the

1% cap contained in s 152(8). That cap limits the

amount that a broadcaster must pay sound recording

copyright owners for broadcasting their recordings to

1% of the broadcasters gross revenue.6 This would

likely have led to proceedings in the Copyright Tribunal

and, given the remaining uncertainty as to whether

internet simulcasts were a broadcast under the Copy-right Act, this question of law would probably have been

referred to the Federal Court7 for determination, landing

the parties in the same position they ultimately found

themselves in, but at further expense.

First instance decisionAt first instance, the primary judge found in favour of

CRA and held that the internet simulcasts were delivered

by a broadcasting service and therefore were a broad-

cast within the meaning of the Copyright Act. His

Honour focused on the meaning of the word service

contained in the definition of broadcasting service andin the Ministerial Determination, and found that it

encompasses the entire business activity carried on by

the service provider.8 Therefore, according to the

primary judge, the service that transmitted the radio

programs via both the BSBs and the internet was one

service.9

The parties arguments on appealOn appeal, PPCA argued that the word service was

directed to that which was actually being delivered by

the person providing the service and received by a

member of the public. PPCA expressed this notion of

service as the radio program wrapped in a delivery

mechanism.10 Therefore, PPCA contended, the stream-

ing of the radio program on the internet was a different

service from the delivery of that program using the

BSBs.

11

On the other hand, CRA submitted that its members

transmissions were a communication to the public deliv-

ered by a broadcasting service, and that the service

provided by CRAs members should not be considered

a service that makes available radio programs using the

internet. Alternatively, CRA argued that if the commu-

nications to the public were delivered by a service that

makes programs available using the internet, then that

same service also delivers programs using the BSBs.12

Therefore, CRA asserted, the Ministerial Determination

applied so that the entire service (which includes both

internet transmissions and BSBs transmissions) remained

a broadcasting service.

The Full Court decisionAfter considering the purpose and object of the BSA,

the Full Court concluded that the service is the provi-

sion, by one means or another, such as the internet or

terrestrial transmitters, of [the] radio program, and that

a broadcasting service is the delivery, in a particular

manner, of a radio program consisting of matter intended

to entertain, educate or inform (emphasis added).13

Therefore, the delivery of a radio program by a terres-

trial transmitter is a different service from the delivery of

the same radio program using the internet. As the

internet simulcasts were a service that made available

radio programs using the internet and they were not

delivered using the BSBs, the Full Court concluded that

they were not a broadcasting service and were not

licensed under the Agreement.

The Full Court noted that a contrary construction may

have had the result that radio broadcasters would be in

breach of their broadcasting licence conditions by trans-

mitting outside their designated licence area, as their

internet simulcasts were not geographically restricted.14

Implications

The decision means that commercial radio broadcast-ers cannot rely on their existing broadcast licence to

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stream sound recordings globally over the internet, as

this involves a separate type of communication. A

licence to communicate sound recordings over the

internet is not subject to the unique limitations in the

Copyright Act that apply to licences for broadcasting

sound recordings, such as the statutory licence provision

(s 109) and the 1% cap on licence fees (s 152(8))

discussed above.15

The result of the Full Courts judgment is that

commercial radio broadcasters that choose to transmit

their programs containing music over the internet will

now need to negotiate a licence for that activity under

the same conditions as other entities that also provide

online music streaming services, thus creating a level

playing field. One of these conditions is that they willneed a licence to communicate unprotected record-

ings,16 such as those originating in the United States.

Under the previous decision, certain broadcasters in

Australia (and not entities providing internet radio

programs) could transmit unprotected recordings over

the internet to a potentially worldwide audience without

requiring a licence.

While some may suggest that the Full Courts inter-

pretation of broadcasting service is inconsistent with

the principle of technological neutrality, it is worth

repeating the Full Courts observation in Optus TV Now

that no principle of technological neutrality can over-come what is the clear and limited legislative pur-

pose.17 Despite having technological neutrality as one

of its objectives, the BSA has, in fact, regulated services

according to the platform over which they are deliv-

ered.18

The issues of technological neutrality in delivering

content and the application of the BSA to convergent

media were recently the subject of the independent

Convergence Review, which recommended a move

away from concepts such as broadcasting services to

regulation based on content service enterprises.19 It

remains to be seen whether parliament will implementthese recommendations. In the meantime, the law pro-

vides that internet transmissions of radio programs are

not a broadcast, even when delivered simultaneously

with the broadcast of those same programs over the

spectrum.

CRA filed an application for special leave to appeal to

the High Court on 13 March 2013.

Siabon Seet

Partner

Gilbert + Tobin Lawyers

[email protected]

Will Aplin

Lawyer

Gilbert + Tobin Lawyers

[email protected]

The authors acted on behalf of the appellants, Phono-

graphic Performance Company of Australia Ltd.

Footnotes1. Phonographic Performance Co of Australia Ltd v Commercial

Radio Australia Ltd [2013] FCAFC 11; BC201300486 (PPCA

v CRA Appeal).

2. National Rugby League Investments Pty Ltd v Singtel Optus

Pty Ltd(2012) 201 FCR 147; 289 ALR 27; [2012] FCAFC 59;

BC201202435 (Optus TV Now).

3. Broadcasting Services Act 1992 (Cth), s 6(1).

4. G Hughes, C Moor and M Ashdown, Phonographic Perfor-

mance Co of Australia Ltd v Commercial Radio Australia Ltd(2012) 94 IPR 585; [2012] FCA 93; BC201200538 (2012)

15(1) Internet Law Bulletin 910, p 10.

5. Subject to meeting relevant conditions, such as giving an

undertaking in accordance with s 109(1)(a).

6. For more on the 1% cap, see Phonographic Performance Co of

Australia Ltd v Commonwealth (2012) 286 ALR 61; 86 ALJR

335; [2012] HCA 8; BC201201568.

7. Under s 161 of the Copyright Act 1968 (Cth).

8. Phonographic Performance Co of Australia Ltd v Commercial

Radio Australia Ltd (2012) 94 IPR 585; [2012] FCA 93;

BC201200538 at [115] (PPCA v CRA First Instance).

9. Above, n 8, at [130].

10. Above, n 1, at [22].

11. Above, n 1, at [23].

12. Above, n 1, at [19].

13. Above, n 1, at [68], [69].

14. Above, n 1, at [70].

15. Australia is one of the only jurisdictions in the world where

such a statutory 1% cap applies. The cap is widely regarded as

being anachronistic.

16. For an explanation of the difference between protected and

unprotected recordings, see Phonographic Performance Co

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of Australia Ltd under Section 154(1) of the Copyright Act

1968 (2010) 87 IPR 148; [2010] ACopyT 1; BC201005040

at [19][31].

17. Above, n 2, at [96].

18. C Lidgerwood, Reactive, not proactive: recent trends in

Australian broadcasting regulation (2002) 9(1) Agenda 1932.

19. Convergence Review, Final Report, March 2012, available

at www.dbcde.gov.au.

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Documents

Phonographic Performance Co of Australia Ltd v Commercial Radio Australia Ltd