Sunday, October 14, 2007

Craig Parks on Canada’s Copious Collection of Copyright Collectives

Canada’s Copious Collection of Copyright Collectives is the subject - though not the title - of Craig Parks’ study on collectives commissioned by Canadian Heritage, which was released in August, 2007 after an apparent 10 month delay for translation and perhaps other bureaucratic reasons. I was going to comment on it back in August, 2007 when it was belatedly released, and I drafted my posting but forgot to post it. So here’s my belated comment.

Although the report appears rather lengthy, most of it consists of known tombstone data, descriptions, and facts about Canada’s approximately three dozen collectives. There are some additional details, such as the names of mid level staff members of various collectives - but this is not particularly useful information. Most of the important factual data can be already found at the Copyright Board’s website, for example - here, which provides links to the collectives that do have websites. The Board’s website is actually very useful for many purposes, including access to Canada’s copious collection of copyright collectives.

The report does state the obvious overall question at page 8:
At first glance, there are many collectives operating in Canada. But are any redundant?
At page 45, the report concludes:
On the issue of the multiplicity of collectives, the complaints seem to be grounded in “optics” rather than reality. Thirty-five collectives merely appear to be too many.
The report has no comparative component. It does not look at the USA, which has for all intents and purposes only about half a dozen collectives (that is to say about one sixth of the number as compared to Canada). Or the UK, which has far fewer than Canada. Or Europe, where the collective movement was born and where the EU is determined to impose some efficiency.

True, there is some duplication between English and French language collectives. But this does not explain the numbers. We are still left wondering why Canada has more collectives than any other developed country. Daniel Gervais, who knows a lot about collectives (he worked for them for many years) and who has recently published an excellent book which the Parks study doesn’t even refer to, has told me that we are in fact outdone only by Brazil. Now we do know that Brazil does well indeed in soccer and regional jets. But I’m not so sure we should emulate them in respect of copyright collectives.

Other problems with the study are these:
• No discussion of the history of collectives in Canada, and in particular of the important legislative changes in 1988 and other major historical events, such as the merger that resulted in SOCAN in 1990 (much to the consternation of most “serious” composers in Canada ever since).
• No discussion of the considerable role of Government - at the both the Federal and Provincial level - of encouraging and propping up collectives with various forms of direct and indirect subsidies at the taxpayers expense.
• Inadequate discussion (about 6 lines) and no specifics about the “cultural fund” option, which is widely used in Europe and which enables, for example, SACEM in France, to set aside 25% of its private copying levies for cultural purposes. Such funds could be used to keep a substantial portion of money in Canada to benefit truly deserving and/or needy Canadian creators. Contrary to what the report says at p. 13, most collectives in Canada oppose the cultural fund concept. I do not consider “seminars, workshops and other initiatives to assist members in their understanding of their business and craft” to be an example of a “cultural fund” expenditure. The only Canadian semblance of such a fund of which I am aware is the SOCAN Foundation, not mentioned in the report, which operates on the basis of a modest capital endowment set up at the time of the merger between CAPAC and PRO Canada and a very modest contribution of just over 0.5% of SOCAN revenues or 2.8% of SOCAN expenses, as most recently reported. (I am not criticizing SOCAN here - something is better than nothing).
• No discussion of the internal economics of collectives and how they can greatly benefit a handful of consultants, lawyers and senior employees but often do comparatively little or nothing for actual working creators who are not already rich and successful to begin with. It would be very interesting to know the average and median distributions to individual members of the major Canadian collectives. To its credit, SOCAN, which is by far the most transparent of Canadian collectives, now publishes “average distribution” per writer/composer. The median figures would perhaps be even more interesting.
• No discussion of the potentially very useful role envisaged by Parliament for the Commissioner of Competition in Copyright Board matters and her apparent total failure and that of her predecessors to exercise it.
• Cursory discussion at page 19 of the problems with Copyright Board proceedings. Some - though by no means all - of the issues are mentioned, but there is little by way of analysis or example.
• An unsubstantiated and non-specific opinion that some of the areas in which the Board might be more active, such as oversight of the actual inner workings of collectives, would require amendments that “might in turn give rise to constitutional challenges.” Examples, please? We need to know how far the Board can go - and in my opinion, it can go quite far even without amendments. It has ventured down this road already, and been upheld by the Court - which the report does not mention. And I fail to see why legislation giving even more oversight power over collectives would not be constitutional. To suggest otherwise without further explanation is not helpful to the many rank and file members of collectives who would like to know that someone has the power to do something about their interests.
• An overly simplistic analysis of why Board proceedings are so expensive, with a good measure of “blame the victim”, i.e. the objectors, in the brief discussion.
• Almost no reference to judicial review or to the role it plays vis a vis the Copyright Board.
• Little or no reference to specific areas where the enactment of regulations - either by the Board itself or the Governor in Council - could help.
• No bibliography, literature, and almost no case citations.
• Last but not least, virtually no discussion of the public interest and the manifest failure of the system to allow public interest advocacy to be effective. For example, should the Board should be given the explicit mandate and responsibility to take on a real inquisitorial role on behalf of the public interest? There is a two line mention that “cost recovery” was considered in 1999 and dismissed. A cost recovery regime - cf. CRTC - has considerable potential to help serve the public interest. But it seems to be of no interest to the Board. Or to the author of the report. We still don’t know why not.

Some of the point form discussion about specific collectives is either too perfunctory to be useful, wrong or both. For example, concerning the CPCC, the report says that the benefits from the user’s perspective include:
- regime permits home copying without threat of copyright infringement actions
- tariffs certified by the Copyright Board reassure users of their fairness
- simple reporting system requiring manufacturers and importers to report sales in Canada on a bi-monthly basis
On the first point, what about BMG v. Doe, and the so far failed (partly due to yours truly) efforts and ongoing assertions of CRIA (a major stakeholder in and lobbyist for the levy scheme) that downloading is illegal?

On the second point, how fair is it to impose a $0.21 “tax” - as virtually all Canadians regard it - on hundreds of millions of CDs that will be used only for data back up in businesses, copying of photos and countless other uses that have nothing remotely to do with the private copying of music?

On the third point, it would seem that the author of the report has not interviewed any of the many unhappy targets of a CPCC audit. The audit powers of the CPCC - even before they were recently beefed up by the Board - would make CCRA and the RCMP envious in many respects.

(Disclosure - I regularly act against the CPCC).

We have about three dozen collectives in Canada collecting something approaching half a billion dollars a year. It would have been very useful for the report to include the amounts collected by each of them in some organized chart format, at least from the few collectives that are sufficiently transparent and willing to provide this information. Those that are not should have been named.

My main concern with this study is that is a lost opportunity to address some really important issues. This may not be the fault of report’s author, who may well have given the Department what it asked for, i.e. to “identify the advantages, issues and problems....”

However, identifying these things is the easy part. Anyone even passingly familiar with the copyright world in Canada already has long ago identified the “ the advantages, issues and problems” with collectives, and the issues involving the Copyright Board as dealt with in this report and many that aren’t even mentioned, perhaps because they are too politically sensitive.

What we need is a specific diagnosis of the problems, their causes, and concrete achievable recommendations on how to fix them. Unfortunately, really serious and recurring issues are dismissed with little or no analysis. For example, regarding the level of fees, the report simply concludes:
In my view, these complaints must be taken with a “grain of salt”, as it is as much a natural inclination to complain about fees as it is to complain about taxes. In the case of most copyright fees, however, the fee is either set by the Board after due deliberation (including taking into account the economic impact of a tariff on users) or negotiated in good faith by the parties. In the latter case, if the parties reach an impasse, the user may always refuse to pay the asking price and let the courts settle the matter by way of damages.
If the user submits that a particular activity qualifies as “fair dealing” or is exempt under the Copyright Act, and the administrative or judicial body rules otherwise, legislators can be lobbied for legislative change.
If the report was meant to set the stage for further analysis, then it has added little if anything to what was already known, and has only delayed and not further defined the real hard work. Because it has no normative component and essentially describes and rationalizes the current lay of the land, it may be seen by some policy makers and collective interests as a vindication of the status quo, which would be regrettable.

This report only confirms my belief, often stated, that we need a judicial commission to enquire into the Canadian copyright system, with an adequate budget, staff and terms of reference to get the job done and to issue a fully reasoned and documented report in the tradition of Justices Parker, Ilsley, and the Economic Council. Such a commission should take a particular interest in the area of collectives and the Copyright Board, though there are lots of other difficult areas that have nothing to do with collectives or the Board. Perhaps such a Commission could in turn “commission” a balanced set of studies of the quality of those that emanated from Consumer and Corporate Affairs (predecessor to Industry Canada) in the late 70's and early 80's, or the late Gordon Henderson’s report on the litigation system published in 1991, with which I was closely involved. These were substantial and influential contributions.

The apparently ad hoc current program of studies commissioned by the two departments has on the whole produced disappointing results compared to previous departmental studies. This is regrettable because many of these studies have become lost opportunities. They may “occupy the field” rather than pave the way for further departmental research, and may result in delay or unsatisfactory results in the ultimate quest for satisfactory copyright law reform in Canada.

It seems that Mr. Parks has been commissioned by Canadian Heritage to do more work, to wit:
Study Title: Music Copyright Management (update of 2002 project)
Prepared By: Craig Parks
Expected Completion Date: November 2007
Summary: This study will analyze the relationship between various parties involved in the production and distribution of sound recordings in Canada

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