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More content, more concerns

Unblock Us gets Canadian Netflix subscribers American content, but its legality is questionable.

(Photo:  Richard Drury/Getty)

Is this legal?

That’s the first thought that goes through your head when you hear about, an online service that lets Netflix’s Canadian subscribers access streaming content normally available only to American subscribers.

The answer—at least for now—is “maybe.” None of the industry people I spoke to were aware of the service’s existence, which is probably exactly how Unblock Us’ operators want it given the paucity of information they offer on themselves. If you’re a hardcore Netflix user, chances are you’ll hear about them through the online grapevine. At $5 monthly, this group of self-described “leading software developers who’ve worked for Oracle, Research In Motion and other top companies” stands to make a mint.

Essentially, how Unblock Us works is it assigns a U.S. Internet address to a Canadian address, which causes Netflix’s servers to treat it accordingly. Voila, you’ve got access to Netflix U.S.A.! Normally, set-up would be a tedious, technical process for anyone but IT types so few consumers would try it, but Unblock Us makes signing up and streaming a relatively simple, seamless process even the non-tech savvy can do.

But is it legal?

Jill Jarvis-Tonus, head of the new media/copyright practice at Bereskin & Parr LLP, says “there would be some concerns.” Unblock Us is almost certainly relying on loopholes and untested law (this is, after all, new media) to work a grey area. “I don’t know if this would quite qualify as fraud, but you’re making a misrepresentation to Netflix by using this online because you’re basically pretending that this is a U.S. entity getting the content when it isn’t. So that strikes me right there as having some issues whether it’s broadcast policies or … whether there’s some sort of criminal code provisions dealing with interference with online or computer transmissions.”

Some of the affected parties, like broadcasters, sound more resigned than anything else—that or they’re prepping legal action and are playing it close to the vest. MTV, for instance, which has some of its content currently available on Netflix U.S. but not Netflix Canada, did not respond to requests for comment. Over at Astral Media, Hugues Mousseau, director of corporate communications, says the company is unfamiliar with Unblock Us. He extolled the virtues of Canadian broadcasters in terms of their investment in the country and their provision of U.S. studio content, adding, “So if there are consumers that choose to circumvent the system they’re … doing so to the detriment not just of the system but all Canadians.”

Not quite fighting words, but those are perhaps to come in hearings before the CRTC, which are scheduled later this fall to investigate what it calls “over-the-top” media, which includes Internet services like Netflix. Astral, as well as every other major Canadian broadcaster, have made impassioned submissions as to why Netflix must be regulated in the same way they are. Still, in the interim this leaves an outfit like Unblock Us to quietly go about raking in some unknown sum of money while giving Canadian consumers less and less of a reason to subscribe to a broadcaster’s VoD content or what-have-you because they already saw it all via Netflix U.S.

And for now, as a CRTC information officer told me, “We don’t regulate Internet content.”

However, even if it did it’s unclear whether broadcasters or content owners could seek redress there.

“I’m sure it will upset many people and they will probably argue that it isn’t [legal] and they probably could make some plausible argument that it isn’t, but I think there could equally be arguments made for the opposite view.”

That’s one take by Ariel Katz, assistant professor of law at the University of Toronto, and Netflix subscriber. He says the hurdle for anyone wishing to pursue Unblock Us in the courts is that copyright and broadcast laws are slightly different between the U.S. and Canada and both Unblock Us and Netflix’s operations cross both countries. And then within each country’s laws, the rules lack enough precedent such that judicial interpretation may be a matter of discretion.

In Canada, the pertinent copyright issues fall under what’s known as “communication with the public by telecommunication” (CPT). Katz says the problem is its scope is under contention by the Copyright Board of Canada which argues that streaming content as well as one-off downloads such as an iTunes song, constitute CPT. On the other hand, U.S. law does not agree on the one-off example and anyway doesn’t have an equivalent to CPT. This potentially creates wiggle room for Unblock Us.

Says Katz, “Even if everything happened in Canada and would be subject to communication with the public by telecommunication, the fact that one crucial aspect of the activity takes place in the U.S. makes it unclear whose copyright laws apply.”

The Supreme Court of Canada is due to rule this December on how broad the scope of CPT should be.

Netflix declined to comment but a source with knowledge of the company tells me it considers Unblock Us to be in violation of the licensing agreements it has with its studio partners.

Katz says that in the event Unblock Us was ever taken to court, it might be able to argue “fair dealing” as a defence on the grounds that it is providing content Canadians would otherwise not get to see and for which there is no justifiable reason. Of course, broadcasters and other content providers might argue they were always in the process of doing that—licensing takes time, after all. In which case, get your fill of Netflix U.S. now because Unblock Us isn’t going to be the next big thing.

Says Katz, “I don’t think this service has a very long-term viable business plan.”