The Challenges of IPTV

Transmission of audio files over the Internet Protocol (IP) is now a widely-used, daily occurrence. Few people have never heard of the Internet voice services offered (VoIP – Voice over Internet Protocol), and many companies are even using them on a large scale. Although this service presents some unresolved legal issues, the latest major news is transmission of audiovisual programming using Internet protocol (IPTV), a subject being extensively addressed in events throughout the world.

Today it is possible to provide television programming in real time over the Internet, which is accessed on desktop computers, portable computers and an array of more compact devices, not to mention cellular telephones.

This technology does, however, present its own challenges, which companies offering the service must address.

The first of these concerns content supply agreements. In most cases, the provider of IPTV services is not the creator of the work to be transmitted, and will thus have to take the necessary measures to secure the required license agreements. These licenses must be carefully worded and contain express provision for the use of the licensed works for specific periods and areas. Extreme care is also called for to ensure that information transmitted is encrypted, so that signals are not captured, thus stemming so-called pirating activities.

Another challenge is the classification of the IPTV services with the National Film Agency (ANCINE) as concerns the value and payment (or lack thereof) of the CONDECINE tax (Contribution to the Development of a National Film Industry). Brazilian legislation does not expressly provide for the service in question, but it generically addresses "other markets." It is yet to be seen whether IPTV will be considered "another market," or if it may be argued that it is a "mass communication service," the latter being duly defined by law. The answer to this question will depend precisely on the nature of the transmission, since IPTV may be used to transmit television channels simultaneously ("simulcast") and to provide Video on Demand (VoD) service. In the former, it is perhaps more accurate to consider the service a "mass communication service," even though the term "mass" may well generate great controversy when applied to IPTV. The VoD service may be considered a rental service, just like traditional video rental services.

The third challenge, among numerous others, is payment or not of royalties for public performance of musical works to the Central Office for Collection and Distribution of Royalties (ECAD). IPTV is a service that permits enormous interaction on the part of the user, sometimes analogous to watching a video film. In this case, payment to ECAD would not be due, since no "public performance" is involved.

The matter is complex and warrants reflection, especially given the numerous terminological and legal problems the new technology presents. Extensive examination is called for: incorrect classification of the service may generate considerable inconvenience for the company offering it.