Phonographic Performance Co of Australia Ltd v Commercial Radio Australia Ltd

Siabon Seet and Will Aplin GILBERT + TOBIN LAWYERS Take-away tips
Broadcasters should not assume that their licence to broadcast copyright material covers all communication platforms they should obtain separate rights to cover online streaming services. Commercial radio broadcasters now compete on a level playing eld 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. The decision directly affects commercial radio broadcasters and sound recording copyright owners, as it conrms that the copyright owners can seek a separate fee for internet transmissions. It also has the potential to impact other broadcasters (such as television broadcasters) and other copyright owners who grant licences for the 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 broadcasting sound recordings due to some specic provisions in the Copyright Act.

What the dispute was about

The court was asked to decide the meaning of the word broadcast within the Copyright Act because the appellant, Phonographic Performance Company of Australia Ltd (PPCA), had granted licences to commercial radio broadcasters through an industry agreement (Agreement) with the representative body, now called Commercial Radio Australia Ltd (CRA), which permitted CRAs members to Broadcast certain sound recordings to the public. The term Broadcast in the Agreement was dened by reference to the denition of broadcast contained in the Copyright Act from time to time. That denition relevantly provided that a broadcast was a communication to the public delivered by a broadcasting service within 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 bre, 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 fall within this denition.3

Why the case is important

The unanimous decision of the Full Court of the Federal Court in Phonographic Performance Co of Australia Ltd v Commercial Radio Australia Ltd1 provides some much-needed clarity on what constitutes a broadcasting service in the Broadcasting Services Act 1992 (Cth) (BSA). More specically, 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 conrming 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.

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The Minister had determined on 12 September 2000 that the following class of service did not fall within the denition of broadcasting service:
A service that makes available radio programs using the Internet, other than a service that delivers radio programs using the broadcasting services bands

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 appeal

On 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 streaming 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 delivered 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 communications 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.

(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 broadcasting 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 dedicated for broadcasting television and radio. On 3 February 2010, PPCA led 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 construction regarding the meaning of broadcasting service and the Ministerial Determination. Contrary to what has been suggested by other commentators,4 the dispute could not have been avoided by simply drafting the Agreement differently. Section 109 of the Copyright Act provides a statutory licence for the 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 broadcasts 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 Copyright 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.

The Full Court decision

After considering the purpose and object of the BSA, the Full Court concluded that the service is the provision, 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 terrestrial 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 transmitting outside their designated licence area, as their internet simulcasts were not geographically restricted.14

First instance decision

At rst 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 broadcast within the meaning of the Copyright Act. His Honour focused on the meaning of the word service contained in the denition of broadcasting service and in the Ministerial Determination, and found that it

Implications
The decision means that commercial radio broadcasters 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 eld. One of these conditions is that they will need a licence to communicate unprotected recordings,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 interpretation 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 overcome what is the clear and limited legislative purpose.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 delivered.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 implement these recommendations. In the meantime, the law provides 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 led an application for special leave to appeal to the High Court on 13 March 2013.

Siabon Seet Partner Gilbert + Tobin Lawyers sseet@gtlaw.com.au

Will Aplin Lawyer Gilbert + Tobin Lawyers waplin@gtlaw.com.au

The authors acted on behalf of the appellants, Phonographic Performance Company of Australia Ltd.

Footnotes
1. Phonographic Performance Co of Australia Ltd v Commercial Radio Australia Ltd [2013] FCAFC 11; BC201300486 (PPCA v CRA Appeal). 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). Broadcasting Services Act 1992 (Cth), s 6(1). G Hughes, C Moor and M Ashdown, Phonographic Performance 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. 6. Subject to meeting relevant conditions, such as giving an undertaking in accordance with s 109(1)(a). 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. Under s 161 of the Copyright Act 1968 (Cth). 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). Above, n 8, at [130]. Above, n 1, at [22]. Above, n 1, at [23]. Above, n 1, at [19]. Above, n 1, at [68], [69]. Above, n 1, at [70]. 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

2.

3. 4.

7. 8.

9. 10. 11. 12. 13. 14. 15.

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of Australia Ltd under Section 154(1) of the Copyright Act 1968 (2010) 87 IPR 148; [2010] ACopyT 1; BC201005040 17. at [19][31]. Above, n 2, at [96].

18. 19.

C Lidgerwood, Reactive, not proactive: recent trends in Australian broadcasting regulation (2002) 9(1) Agenda 1932. Convergence Review, Final Report, March 2012, available at www.dbcde.gov.au.

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