Howard Knopf Speaking Notes for Senate BANC Committee November 21, 2018
Here is the webcast of this hearing. My opening remarks occur at 14:49. There were some very good questions, and presentations from Jeremy de Beer and Casey Chisick.
The following are my speaking notes. The final transcript is not yet available.
PROBLEMS WITH BILL C-86 APPROACH TO BOARD REFORM
1. Thank you for the invitation and the opportunity to compress nearly 40 years of experience into 5 minutes. Frankly, an omnibus bill approach to all these complex and controversial IP issues is absolutely NOT the way to proceed here and is unnecessary and unacceptable. There are many serious issues and problems with the nearly 100 pages of IP material in Bill C-86 but I was only invited here to talk about the Copyright Board. This is in some respects the most drastic change to the Board since 1936 and it is getting only an hour or so of Committee consideration here and much less in the other place.
2. The clarification of criteria – including the inclusion of the terminology of “public interest” and “willing buyer and willing seller in a competitive market with all relevant information, at arm’s length and free of external constraints” may actually backfire. This will formalize in an untested and unprecedented manner what has been an informal exercise that has often resulted, for better or worse, effectively in the averaging of two extreme sets of numbers – and will almost certainly result in even more expensive and time-consuming so-called “expert evidence” about something that is circular at best and paradoxically impossible at worst – which is that determining a competitive market rate. There is no such thing as a competitive market in a world where mandatory tariffs can be set by law for the benefit of powerful monopolies that would otherwise be criminal conspiracies were they to exist without the blessing of Parliament and the Copyright Board and the Courts. Moreover, the concept of “public interest” may potentially conflict with that of a “competitive market”. We can expect longer and more expensive hearings and more judicial review in figuring out what, if anything, this will all mean.
3. As for the commendable idea encouraging public participation without incurring the costs of full participation as indicated in the Government’s Fact Sheet, that appears to be more talk than action. If the Government means reimbursement for costs of public interest participation, that would require enabling legislation as we have with the CRTC. But that enabling legislation is simply not there in this bill.
4. As to streamlined timelines, the Bill simply doesn’t deliver. Moving up the filing date by 5.5 months and making tariffs last three years rather than one won’t make any difference to the fact that it usually has taken about four years for a hearing to even take place and there are few if any examples of “annual” hearings on the same tariff. It then typically takes the Board 3 years to render a decision, which is then very retroactive, and which often results in judicial review and even rehearings. Contrary to what you heard earlier today and my friend Prof. de Beer, the Board normally certifies fewer than 5 tariffs a year.
5. The enabling legislation for regulations to specify time lines has already been there for at least three decades – and still hasn’t been used. The setting of deadlines and timelines have still been postponed and punted again. This bill does nothing to impose necessary deadlines, as we have for other tribunals and in the Federal Courts as set by the Governor in Council – for example in the case of the Federal Courts and the Competition Tribunal, which incidentally will have a much smaller budget than the Copyright Board.
6. The bill will eliminate the requirement for music industry collectives to file tariffs that require Board oversight – even if there is no opposition. This has been a requirement since 1936 following the monumental Parker Commission Report. That means that the music industry will have even more effectively unchecked monopoly power over organizations ranging from hockey stadiums and movie theatres OTOH to barber and beauty salons OTOH. No wonder SOCAN and Re:Sound have been so quick to welcome this Bill.
7. The elephant in the room here, of course, is the overwhelming question of whether Copyright Board tariffs are mandatory for users. I successfully argued in the SCC that this is not the case. It’s one thing for the Government to provide a train or plane tariff to get from Ottawa to Toronto – as once was the case. But, the Government never forced anyone to take either the train or plane if they wanted to take the bus or drive their own car. However, in the Access Copyright v. York University case, York did not address the issue of whether final approved tariffs are mandatory. Let’s hope that the FCA gets this right. It will likely end up in the SCC. The issue is certain to arise in the s. 92 hearings as well. So, in this regard, I’m a little concerned about the purpose or need for the new s. 73.1 which imports language from the “mandatory” levy scheme in Part VIII of the act re enforcement of “terms and conditions”?
8. I’ll be happy to answer your questions.