VANCOUVER — This month’s change to Canada’s copyright rules happened to coincide with a rumoured Netflix crackdown involving Canadian users who bypass licensing regulations to access shows from the U.S. service. A company that tracks online piracy in Canada has uncovered three million cases of illegal downloading and video streaming in the past three months. And notices have already been sent to Canadian consumers, threatening with American-style draconian penalties, including having their Internet service cut off. It has all left some consumers worried they’re going to lose their favourite TV shows, face fines or even get bumped off the Internet. Business as usual or online apocalypse? Is it going to change how and what we watch on our televisions, tablets, smartphones and other devices? Unlikely. But it’s up to consumers to educate themselves on their rights and responsibilities so they don’t fall victim to false demands for payments and other bullying behaviour. Internet Service Providers are now required to forward notices of copyright infringement to their subscribers at the request of the rights holder, referred to as notice and notice. However, the rights holder doesn’t know the identity of the subscriber. Michael Geist, Canada research chairman in Internet and ecommerce law at the University of Ottawa, said while Canada’s legislation strikes a fair balance protecting consumers, rights holders and ISPs, there is already evidence it’s being exploited. He said there is concern that some of the rights holders or anti-piracy companies will take advantage of warning notices to seek settlements, even though they don’t know who they are being sent to. If an individual receives the letter and doesn’t know Canadian copyright law, they could think they are liable. “That strikes me as a real misuse of the system if we start seeing that emerge and I think we are and we will,” said Geist. Geist posted an example of a recent notice on his blog, which threatens to suspend Internet service and apply penalties up to $150,000 per infringement — neither of which are penalties under Canadian law. David Christopher, spokesman for the Internet advocacy group OpenMedia.ca, said Canada’s rules are meant to stop copyright trolls, those who hope to make money by threatening people with legal action if they don’t pay up. “Pretty much these rules were designed to stop the American-style system where a company would send out thousands of letters saying, ‘Hand over $5,000 or we’ll take you to court and you’ll have to pay $50,000.’” Should you be scared? No. At least not unless you’re in the business of piracy, in which case you could face the heftier penalties reserved for those who make money from infringing copyright. Should you be informed? Yes. If you’re among the estimated 1.92 million Canadians who pretend they’re located in the U.S. so they can access the extensive listings of Netflix.com rather than settling for Netflix.ca, you may be relieved to know Netflix has quashed rumours that it has a launched a special campaign to cut you off. Also, Ottawa’s new rules involve a practice that has been carried out by a number of ISPs for some time.

“We’re not talking about dramatic changes,” said Geist. “Notice and notice, for example, has taken place informally for 10 years, so people have been getting these kind of notices for a long time.”Rogers sent out 207,000 notices in 2010, representing about five per cent of its customers. Among those who received a copyright infringement notice, 67 per cent stopped the practice, and with a second notice, 89 per cent stopped, according to company data. “They have proven pretty effective in the scheme of things,” Geist said of the notices. “They have reduced the amount of infringement, they serve as a pretty good educational tool, and they work well from a consumer perspective as well.” Penalties in Canada are also heftier for people in the business of pirating than they are for ordinary consumers. The minimum fine for non-commercial infringement is $100 and the maximum is $5,000 — and that’s for all infringements in a lawsuit, not per infringement. That’s down from $20,000 per infringement, which is still the penalty for commercial infringement. So unlike the United States, in Canada we don’t get stories of single moms and students facing fines of hundreds of thousands of dollars involving illegally downloaded files. If rights holders want to pursue a case, they have to go to court to get an order for the identity of the subscriber so they can send a demand letter. A Federal Court judgment last year in a case between Voltage Pictures and ISP TekSavvy set out clear guidelines for judicial oversight over the information that rights holders would receive and the wording of the letters they can send out. It is expected the minimum statutory damages of $100 or damages proven by the copyright holder, which might amount to the cost of a movie or a rental cost, will discourage lawsuits in non-commercial cases. Barry Logan is the managing director of Canipre, a company that tracks copyright infringement in Canada for clients including movie, television, music and software rights holders. Starting this week in Western Canada, the company will be sending out notices to ISPs to be sent to alleged copyright offenders among their subscribers. The company is not spying on your computer but rather tracking sites that offer illegal downloading and video streaming of copyright content. It’s the content Canipre focuses on, so for example, it may collect all the IP (Internet Protocol) addresses of users who download or stream a specific movie from a site in contravention of copyright. Logan said notice and notice is a helpful tool for rights holders but it may take some time to see an effect from the recent change. “It’s going to take three months before we see anything happening,” he said. Asked for a sample copyright infringement notice, Logan said he was advised by the company’s lawyers not to share it. As Internet users shift from downloading content to streaming it, the trackers are not far behind. “There are some streaming operations based in Canada,” said Logan. “The server logs could be used at some point as evidence. In a streaming environment, the receiving (IP) addresses are logged.”

Logan said among the three million cases of piracy in the past three months, “there’s a lot of recidivism.” That suggests the same people are infringing copyright repeatedly, rather than the picture of the average Canadian consumer as an online pirate.Morten Rand-Hendriksen could be representative of Canadian consumers who are willing to pay but expect convenience and service at affordable prices. Rand-Henriksen is among those who receives most of his entertainment through streaming options. “I try to be as legal as I can be, which at times can be extremely frustrating,” said Rand-Hendriksen, who works for Lynda.com, the online software training site, has seen his own work pirated online. “I don’t do anything illegal because I think it’s just wrong. “But it does put up some pretty interesting challenges.” As an example, Rand-Hendriksen cited the Games of Thrones, which was first released by HBO, so if you wanted to watch it, you had to subscribe to the network. “I was going to have to pay $20 a month to get Game of Thrones and I only wanted one show,” said Rand-Hendriksen. “I didn’t want HBO.” The show was eventually made available through iTunes but for Rand-Hendriksen, the experience highlights the shortcomings in the entertainment model. “I think the solution is a new model along the lines of what we have, streaming services, and you also have to look at a distribution network where you can pick what you want to watch. You can pay on an ongoing basis for a show,” he said. “If there was a way for content producers to sell their content in a more transparent way and get people to pay in a more transparent way, that would give tremendous value to the industry.” Just as in music, where some artists bypassed the middle man to sell straight to their fans, video creators are exploring new ways of distributing their content. Comedian David Cross is using BitTorrent’s Bundle service to release his feature film, Hits, this Feb. 13. The film debuted at Sundance last year but this will be its first widespread release, available on a pay-what-you-want basis. Canadians, through their adoption of Netflix, music streaming services like Rdio and Spotify, and other flat rate all-you-can-use entertainment services, have demonstrated that they’re willing to pay for content. “For so long we heard that everyone is just a pirate and you can’t compete with free,” said Geist. “That was nonsense. Netflix is competing with free, largely selling access libraries of older television shows and movies all of which are readily available. If someone really wants to download it for free, they can.” Netflix crackdown? Netflix has been in the headlines recently following a story on TorrentFreak.com that said Netflix was starting to block subscribers who use VPN (virtual private network) services and “other tools that bypass geolocation restrictions.” Netflix responded by saying it hasn’t changed its practices. Netflix offerings vary by country, depending on their licensing arrangements, so a show or movie that is available in the U.S. may not be available in Canada. Consumers looking for expanded offerings can subscribe to VPN services such as Unblock-Us, which effectively provides an IP address that indicates you’re in another location, say the U.S. or the United Kingdom, instead of Canada. (Unblock-Us has also said there is no evidence Netflix is testing new methods of disabling geoblocking services.) So while trying to access Netflix.com from your computer or mobile device in Canada will redirect you to Netflix.ca, using a geoblocking service, you could access the U.S. site.