Wednesday, October 17, 2007

Teaser from the Copyright Board - SOCAN's Proposed Tariff 22

The Copyright Board is teasing us today. Here’s an e-mail sent out earlier to the long list of counsel involved with SOCAN’s proposed Tariff 22 - which dates from 1995 and purports to cover music a wide and still vague range of uses of music on the internet:
The decision of the Board on SOCAN Tariff 22.A (Internet – Online Music Services) for the years 1996-2006 will be released tomorrow. It will state:

"For the following reasons, we have decided to deal at this time only with those uses that are targeted in CSI – Online Music. First, this item will, in all likelihood, generate the bulk of Tariff 22 royalties. Second, dealing with the other uses targeted in Tariff 22 raises administrative and wording issues that will require extensive consultations with the parties. The tariff for these uses will be certified at a later date. That being said, for the sake of convenience and coherence, the descriptive and analytical parts of these reasons are written as if we were dealing with all of proposed Tariff 22."

You will be notified as soon as the decision is posted on the Board's Web site.

It looks like the decision will deal fully ONLY with the first item of SOCAN’s tariff - i.e. insofar as it concerns online music sites from which music can accessed through permanent downloads, limited downloads and on-demand streams. In other words, this is only one of SOCAN’s shopping list of seven fields. It looks like webcasting, game sites, and other uses are not yet ready for prime time - after 12 years of effort and one trip already to the Supreme Court of Canada.

Look tomorrow in particular for what the Board has to say about:

1. Whether there is a performance or communication to the public at all (as contrasted to reproduction, wherein SOCAN has no rights);
2. Recent American case law that held that ASCAP cannot collect for downloads;
3. If a tariff is awarded to SOCAN for some or all of this activity in its item #1, as today’s communication suggests, how much more will Canadians have to pay than Americans for the same product(s) and how much of the money raised will actually remain in Canada for the benefit of Canadian artists;
4. Multiple payments to the same parties for the same transaction; and,
5. Last, and by no means least, the question of retroactive application of this 12 year old proposed tariff that will apparently cover the period of 1996-2006.

In any event, Judge Vancise seems to be making good on his goal of getting decisions out in six months - even if it’s only going to be a partial decision in this instance. This hearing took place last April/May.



  1. One of the items I find most disturbing about the Tariff-22 proposal is this concept that SOCAN will charge an operation RETROACTIVELY to the "start of business", as was recently quoted to me by a member of SOCAN when pressed on the matter. What they failed to reply to on the follow-up was my suggestion that companies today are diversified into many industries and to retroactively charge a company back to its beginnings is cross-subsidizing if that business has other non-music interests: is this not already outlawed?

    Secondly: Shouldn't SOCAN make their membership list available so those who choose to opt out of playing SOCAN artists can know who is on the list and avoid them? IE: Freedom of choice.

    Furthermore, I spend a great deal of time with independent musicians and all of which are unhappy on this proposal as it will shut down (or send underground) many cheap and free promotional venues available to them over the Internet, these are artists struggling and are willing to allow free broadcast of their music if it gets them exposure. This Tariff-22, specifically the part on Webcasting, simply maintains the old technology and old school ways of doing things, when are we going to learn these tactics do not work in the end?

    Call it a Tariff, call it a tax, call it what you want but a rose by any other name is still the same...

  2. There is no exemption in this for amateurs or part time broadcasters: say those with fewer than 50 listeners or broadcast less than say 48 hours per month. The tariff is just too high to allow new businesses to get started. Yes, artists should be paid their dues but much of the cost seems to be going to support SOCAN. What's with the annual licensing fee?? Sorry, just charge a flat fee per song played and provide us the membership list so we know when we will be billed.

    If our governments in Ottawa are that concerned about reducing taxes they might think of throwing this out out!