Friday, February 04, 2011

The Access Copyright Interim Tariff: An Excessive or perhaps "Egg-cessive" Access Management Fee?

(Ally Bank commercial)

A lot of effort was put in by a lot of people to oppose Access Copyright’s controversial Interim Tariff - sought belatedly and without any evidence, or indeed any existing tariff to form the basis of an extension or interim tariff.  The Copyright Board rendered a decision on December 23, 2010  favouring Access Copyright - without providing reasons.

Here’s an update on the Board’s Interim Tariff ruling favour of Access Copyright that supposedly maintains the status quo “to the extent possible”.

1. The parties that clearly have the means and who might have been expected to seek judicial review (“JR”) have not done so. The presumptive deadline for doing so was January 21, 2011. Their reasons for failing to do so are not apparent. 

2. Indeed, this failure is very interesting, since AUCC (representing university management) protested that it “vigorously opposes” the AC application and said that the Board has “no jurisdiction” in this instance. Along with ACCC (representing college management), it filed several good arguments as to why the Board should not issue an interim tariff. Thus, the decisions of the two main objectors not to seek judicial review are difficult to understand.

3. Other parties who may have wished to seek judicial review may have lacked the means to do so. 

4. Whatever the reason that JR has not been sought by any participant, it ought not to have been based upon concern over the likelihood of success. Indeed, while nothing is ever certain in a Court, this was a very arguable and even strong case. There are very good arguments in this instance that the Board had no jurisdiction to award a so-called “interim” tariff that will probably last at least three years and cost at least $48 million. Moreover, even if the Board had jurisdiction, this case failed to meet the requirements of the Board’s own precedents for an “interim” tariff. There was no previous tariff and Access Copyright filed no “evidence” of any “deleterious effect” other than certain statements in a letter from its former lawyer.  Finally, there were arguably serious issues regarding procedural fairness  - such as the incredibly compressed schedule, the failure to allow an oral hearing, and the arguably unfair accommodation of the shortcomings in terms of substance and procedure of AC’s submissions. 

5. The failure of AUCC and ACCC to step up to the JR plate may reflect simple pragmatism as seen by risk averse university and college management - at the expense of faculty and students. Many institutions will likely pass these “interim” costs along to their students. UWO, for example, decided to this very early on and may even make a tidy profit in the short run - since it is taking more than $16 per student per year to cover this. Morever, administrators can now go back to their risk free “don’t ask, don’t tell” indemnity regime (at least for non-“digital” rights), without worrying about being sued, or how many times over they are paying for clearances they don’t need in the first place or that AC may lack any chain of title or rights to begin with in many cases.

6. The downside of this current status quo as imposed by the Board  could be as follows:
a. Students will have to pay money that could have been saved and better spent elsewhere.  If the students don’t pay directly, the taxpayers will pay indirectly. The potential cost is presumably $48 million over three years  based on AC’s own figures. That would pay for a lot of professors, a lot of library books and even a few nice buildings. 
b. The restrictive practices included in terms of the tariff - and the fact that it confers de facto legal status on digital rights that arguably don’t even exist (e.g. linking and display), may seriously impact any future assessment of “fairness” in the Courts or at the Board, especially since AUCC an ACCC have not even tried to set this interim tariff aside. AC may argue that this tariff sets forth the floor value both in terms of dollars and practices that comprise any fairness assessment - since the universities and colleges apparently agree with it. Otherwise, they would have at least tried to contest this in the Federal Court of Appeal, or so the argument could go.
c. AC and the Copyright Board may now reasonably infer that AUCC and ACCC will not be fighting this proposed tariff as “vigorously” as many would have hoped or even as “vigorously” as professed. Indeed, one suspects that AUCC would consider anything less than $20 to $22 per student at the end of the day to a victory.  The end game here will likely be an amount somewhere between $18 to $22 per year for university students and somewhat less for college students - no matter how many millions of dollars the main parties spend on legal fees, survey costs, etc. 

7. In any case, the final tariff - which will almost assuredly be years away - will almost certainly be substantially higher than the interim amount of $3.38 plus $0.10 a page will generate - which is likely to form an unofficial base or foundation for AC to build upon. The Board rarely lowers tariffs. It will also almost certainly be retroactive for the several years that the Board normally spends on these cases, unless this practice of the Board in granting such long reaching retroactive tariffs is finally successfully challenged in the Courts. There are good arguments to be made that this practice could and should be challenged. 

8. Indeed, there are good arguments why the final figure should be even less than the $3.38 current minimum. This is because paper course packs are becoming obsolete, and the CCH v. LSUC decision may not have been adequately taken into account in renewing that rate several years following the 2004 decision of the Supreme Court of Canada.  As well, there are serious problems with the framing of the “digital rights” in the proposed tariff  and the basis of AC’s chain of title in any event. But this is not a likely outcome.

9. If the costs gets passed on to students anyway, do university and college managements really care? If there are undue restrictions on faculty and students in term of access to knowledge, will anyone in management even notice, given the  Canadian educational system’s apparent tolerance at all levels for a far more restrictive and expensive copyright regime than in the USA, for example? 

10. There are signs that some universities - both large and small - are not exactly pleased about what is going on here. Nor should they be, since these issues place Canadian teachers and students and a distinct disadvantage as compared to their counterparts in other places, such as the USA and China. As many have begun to notice, AUCC’s recent fair dealing  guidelines, for example, and its overall dealing with AC have generally seemed something considerably less than vigorous. It will be interesting to see what happens inside AUCC and ACCC.

11. Ironically, all of this is about supposedly generating more money for authors who, in most cases, will see less per year from Access Copyright than many copyright lawyers would normally bill per hour. 

12. Last but not least, it is now more than six weeks since the Board quickly and decisively issued its December 23, 2010 decision on the Interim Tariff without reasons. We still have seen no reasons, which is rather surprising under the circumstances. Now that the Board knows that there will almost certainly be no attempt at judicial review, it will be even more interesting to see what these reasons say when we eventually see them.



  1. I would like to draw your attention to an article by Bernard Lang in the recent New York Law School Review No.55 D for Digitise issue. Lang's article is entitled: 'Orphan works and Google Book Search Settlement: An international perspective'. The claim of the possibility of collective representation of things as disparate as authors or any other sort of creative is based on a classification (clade) error. Authors are so disparate as to have almost nothing economically or socially in common. The idea that any one entity could truly represent ALL of such a disparate group is irrational and wrong. It makes even less sense than the medieval bestiaries that classify dolphins and tuna as being of the same type because they both swam in the sea.

    For many authors, the actual exercise royalty rights is antithetical to their own economic interests. For them open source free distribution creates economic and professional opportunities that are far more worthwhile than a occasional small royalty cheque.

    Obviously collection licensing societies have a strong financial interest in collecting as many royalties as possible. Their interests and the interests of many modern authors are in direct conflict

  2. I'm sure that John's comments are a fair representation of the views of those who prefer not to be troubled by having to get permission or to pay for using copyright material. They might also represent the position of academics, whose generous salaries presuppose that they will write and disseminate scholarly works. For those who make a living from their writing, collective licensing is the most effective way to manage their interests.

  3. Anonymous
    For some authors, collective licensing is the preferred model, some authors is not all.

    Mandated restrictions of exclusive individual rights of control need stronger (public) benefits than mere (private) advantage to a minority of authors.

    I have Nothing against voluntary collectives.

    There are many different ways of making a living, compulsory collective management of all authors, is a monopoly restriction of the terms of trade of all people who write , for the benefit of some .

  4. Ps Anonymous , I am a self employed artist sole trader, I am not an academic.