Supreme confusion: How authority, court muddled the copyright law

Early this week the Communications Authority of Kenya(CA) withdrew the temporary digital broadcasting licence it had given Royal Media Group, the Nation Group and the Standard Group.

The bone of contention, according to CA, is what it calls violation of the Kenya Information and Communications Act.

Principally, the three media houses insist that the use of their content by pay TV- especially StarTimes and GoTV violates their intellectual property rights.
Core to the dispute is the so-called ‘must-carry’ rule which requires pay TV to carry the content of local broadcasters.

The real issue, though, is that CA has a fundamental misunderstanding of the ‘must-carry’ rule as implemented in other jurisdictions.

And the authority’s confusion has been given legs by a Supreme Court decision that got all mixed up about the copyright exception called ‘fair dealing’ and the broadcasting rule called ‘must carry.’

There are three points to make: First, both CA and the Supreme Court are wrong on the ‘must-carry’ rule. Second, the Supreme Court is wrong in treating the ‘must-carry’ rule (a broadcasting matter) and fair dealing (a copyright exception) as mutually inclusive.

Third, the Supreme Court was wrong in using subsidiary legislation to limit property rights granted by the Constitution, including intellectual property rights.

The confusion wrought by the authority and fortified by the Supreme Court arises from a failure to distinguish the nature of the broadcasting market and the public interest issues at stake in its regulation.

There are two primary models of broadcasting: Free-to-Air TV and Pay TV. Each is based on a completely different financing model.

Free-to-Air TV develops content and broadcasts it without charging consumers for it. It makes money from advertising.Pay TV, on the other hand, makes money from subscriptions.

Free-to-Air terrestrial broadcasting depends on a network of towers and an aerial at the transmission end to pick up the signal for viewing on the TV set.

INTEREST OF COMMUNITIES

The world over, Free-to-Air TV -- whether it is community or commercial -- is the primary means by which the poorer members of the community get information. This is the essential point in understanding the ‘must-carry’ rule.

In the US and Europe, cable television – meaning pay TV -- has a greater penetration than Free-to-Air TV. In Europe, most Free-to-Air TV broadcasters are small and cater for the interests of communities or linguistic minorities.

It is easy to see that where pay TV has the bulk of the broadcasting infrastructure, Free-to-Air TV and other local stations will be unable to reach those that they serve.

To help fix ideas, imagine a vernacular station based in Ukambani. There are many Kamba-speaking people all over Kenya yet because the station has no infrastructure in the rest of the country, those people cannot be served.

Now suppose that Kenya, like the US, had cable TV operators who own a nation-wide broadcast system. Because cable TV is commercial, it is easy to see that the owners of cable infrastructure have no interest at all in carrying the small Ukambani-based station to serve the few Kamba speakers living in Turkana or Lamu. This is where the ‘must-carry’ rule comes into play.

“Must-carry” rules were designed primarily to compel cable operators to carry local television stations, mainly to protect Free-to-Air TV and local broadcasters.

In the US, as the case of Turner Broadcasting v. The Federal Communications Commission shows, ‘must-carry’ rules were meant to protect Free-to-Air broadcasters. In Europe, ‘must-carry rules’ are used to protect local language channels.

So ‘must carry’ is a right that belongs not to the cable carrier but to the Free-to-Air broadcaster or the local language station. Under ‘must-carry’ regimes, there are two options.

The first is that the Free-to-Air broadcaster may itself require to be carried on cable or another platform. Where it is the Free-to-Air broadcaster asking to be carried, no copyright issues are at play.

GOT IT ALL WRONG

The second option is that the cable service may decide to re-transmit the Free-to-Air signal or they may be asked to do so by the regulator. If so, then for copyright reasons, the Free-to-Air broadcaster must be remunerated for that re-transmission.

Looking at Australia, the US and Europe, it is clear that “must-carry” provisions impose obligations to communicate copyrighted materials (broadcasts). But they do so at the behest of the copyright holder, not at the behest of the regulator and for the benefit of the broadcaster.

Here is where the CA and the Supreme Court got it wrong. First, Free-to-Air TV in Kenya has the bulk of the broadcast infrastructure. Technically speaking, there is no market segment served by cable or pay TV that is also not covered by Free-to-Air TV.

This means that there is no Free-to-Air market segment accessible to pay TV but unavailable to Free-to-Air TV. Why, then, does the authority require Free-to-Air broadcasts to be carried? Where is the public interest argument for the authority to mandate that pay TV carry Free-to-Air broadcasters?

The Free-to-Air broadcasters have not asked for it and the market structure that would demand it, namely greater penetration by pay TV over Free-to-Air TV, does not exist in Kenya.

Which brings us to the second point, the court’s mix up of ‘must carry’, a broadcast rule and ‘fair dealing,’ a copyright rule.
Part of the reason for the confusion is the fact that even though it had better case law from elsewhere, the Supreme Court relied on a clearly confused decision from the Philippines, just as it did in the presidential petition when it plucked a minority decision from the Seychelles.

Reasoning from the Philippines case, the court argued that there was no copyright violation in the authority’s decision to require Pay TV to carry Free-to-Air broadcasting because this carriage amounted to fair dealing. This is incoherent.

“Must-carry” rules raise no copyright issues because the copyright holder is either exercising the right to be carried or, if the regulator demands that he or she be carried, then the carrier pays for intellectual property rights, which is what copyright is.

Fair dealing on the other hand is an exception to copyright. Fair dealing is the rule that allows people to use copyrighted materials for purposes that are considered fair. It is an exception to copyright which covers research or study; criticism or review; parody or satire or reporting news.

There are two steps involved in deciding if some particular use of copyrighted material is fair dealing. First, one must use the material for specific purposes provided for in the law. Secondly, the use must be fair.

Whether a particular use is fair will, of course, depend on the circumstances of the case. In short, this will be determined on a case-by-case basis by the court.

In brief, the court failed to notice a basic difference: “Must carry” is an obligation that a broadcast regulator imposes on a cable or satellite station to carry the signal of a Free-to-Air broadcaster in order to enhance the reach of the Free-to-Air TV or local station.

Fair dealing is the right to use another person’s copyrighted material in certain narrowly defined circumstances. The court first misstates the “must-carry rule” and then justifies that misstatement by misapplying the fair-dealing rule from copyright law.

In this particular case, there are three reasons why the retransmission of Free-to-Air signals by pay TV cannot be fair dealing. First, it is not up to the CA to decide fair dealing as that is a copyright issue between the holder of copyright and the user who claims fair dealing.

This means that the authority’s ‘must-carry’ rule cannot be defended with fair-dealing arguments.
Secondly, even on the face of it, the fact that pay TV are using local channels as a selling point for their product shows clearly that they are gaining a commercial benefit from this so called ‘must-carry’ rule. They are gaining a benefit for which they have not paid the copyright holder.

Thirdly, pay TV has appropriated and re-branded the news broadcasts of Free-to-Air TV, in effect, making it seem as if they are the joint owners of those broadcasts.

FUGITIVE RESOURCES

Finally and most troubling, the Supreme Court’s reading of the property rights clause in the Constitution is narrow and mistaken. The court seems to have adopted what is often called the ‘capture theory of property rights.’

The court says: “The decoders used by StarTimes for the purposes of digital broadcasting are configured so as to transmit the Free-to-Air content carried by Signet.

Therefore, there is no factual basis, to the 1st, 2nd and 3rd respondent’s claim that the 1st appellant violated their intellectual property rights, by authorising PANG, Signet, StarTimes, GOtv and West Media to transmit their broadcasts without their consent.” This is no different from somebody photocopying a book protected by copyright and then pleading no copyright has been infringed because the content was accessible by virtue of the fact that he possessed a photocopier.

Intellectual property rights are not fugitive resources, like say water from rivers in many rural areas of Kenya. You do not acquire property rights in the water until you have fetched it from the river.

In effect, the court treats copyright as if Free-to-Air signals were fugitive resources which one acquires by capture. The ‘capture theory of property rights’ may have application in fox-hunting as was held in the juicy old US case of Pierson v. Post. But it has no application to intellectual property where the rights are based on creation and invention.

To be sure, in the early phase of digital piloting, the Free-to-Air channels allowed others to carry them. This distinction, between carriage permitted by owner of copyright and illegal carriage purporting to be “must carry,” is one the court does not make.

SUBSIDIARY LEGISLATION

At some point, the court recognised that the right to property under Article 40 includes the right to intellectual property. Unfortunately, it immediately backed down from that inquiry, first, by arguing that it is not one of the non-derogable rights.

Secondly, the court then searched for and found limitations of the right to property first, in statute and then, eventually, in subsidiary legislation.
It is not in argument that the rights to property, fair trial, free expression, freedom of the media and freedom of information -- to name only a few rights -- are derogable.

But to say that rights are derogable is to say very little that is meaningful. That rights are derogable does not mean that they are not fundamental. Rights are to be derogated from only when there are exceptional circumstances threatening the nation.

The fundamental status of any right does not derive from the fact that it is not derogable. To begin analysis with exceptions to a right is the sort of dangerous theory that got Kenya into its past difficulties. The fact that a right is protected by the Constitution means that the court’s inquiry should begin the other way.

The person who claims an exception to the right must show that the exception is consistent with the right. The signals of Free-to-Air TV are not public resources; they are resources developed by private individuals.

They are therefore private property protected by the Constitution. It is not the regulator’s place to allocate them to other broadcasters and carriers.
Moreover, in using subsidiary legislation to limit a constitutional right, the court is mistaken in a fundamental way.

In two crucial cases now, the presidential election petition and in this digital migration case, the Supreme Court has been reading the Constitution backwards: Limiting the meaning of clear language in the Constitution, based on language in subsidiary legislation.

SPECIFIC GUARANTEE
According to the court, the Communications Commission of Kenya (CCK)’s ‘must-carry’ letter was valid because the CCK(CA’s forerunner) was merely asking the carriers to “comply with Regulation 14(2)(b).” Subsidiary legislation cannot be a legitimate tool for interpreting a specific guarantee in the Constitution.
This approach is condemned by supremacy clause of the Constitution and by the generous provisions that asks the courts in Kenya to give its majestic clauses the interpretation that most favours rights.

The Court has done the exact opposite here. It has taken the interpretation that least favours intellectual property rights.
If both the CA and the Supreme Court are wrong, can we, nonetheless, discern what may have led them astray? One possibility is that both are genuinely concerned to promote local content on pay TV. If so, the ‘must-carry rule’ is not the instrument for achieving that. And Free-to-Air broadcasters are not the right target group.

Free-to-Air broadcasters have developed their own local content based on their own market research. If the authority wants to promote local content on pay TV, that is best achieved by imposing an obligation on pay TV to enter the market and buy local content. It is not achieved by demanding that Free-to-Air broadcasters give their content to pay TV.

Confusion in broadcasting

Unfortunately, it is not just the Constitution that is at stake here. Kenya is signatory to various framework conventions for protecting copyright.

These are the Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite; the Beijing Treaty on Audiovisual Performances; the Berne Convention for the Protection of Literary and Artistic Works and the Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms.

These treaties and conventions provide a framework for protecting copyrighted material and are part of Kenya’s law under the Constitution.

One risk that the pay TVs face is that by re-broadcasting local broadcasts, most of which contain copyrighted programmes from other countries, they risk litigation not just in Kenya but also in the countries from which those programmes come.

How do we get out of this conundrum? A possibility is an amendment of the Communications Act to define ‘must carry’ in detail and to impose local content obligations on pay TV.

Of course there is always the possibility that the Supreme Court could review its own decision by recognising that it has made a basic mistake. However, neither of those options looks viable at the moment. Hold steady for the coming chaos in broadcasting.

TOMORROW: The what and why of digital migration

Mr Maina is a constitutional lawyer

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