How WIPO Treaty Ratification - and not Bill C-32 - would Double the blank media levies ("taxes") in Canada

Michael Geist has a blog today about the potential political debate concerning an “iPod tax” and how Bill C-32 would have supposedly doubled the "iPod tax"  due to the national treatment requirements of the 1996 WIPO WPPT treaty. I've been writing about this for years and have testified about it to a Parliamentary Committee, and its gratifying to see some of these points being repeated in the government document that Michael exposes and in his own blog.

However, it is incorrect to suggest that “... it is worth noting that Bill C-32, the Conservatives own copyright bill, would likely have doubled the fees that Canadians pay on blank CDs.”

Bill C-32 itself would not have resulted in the doubling the dwindling levy proceeds, which now effectively come only from blank CDs. The “doubling” would only result from a subsequent separate decision to actually ratify the WPPT and the then inevitable issuance of a statement by the Minister pursuant to s. 85 of the Copyright Act that would cause foreign “makers” and “performers” to be considered “eligible” for reciprocal payments. This would require recognition in turn by the Copyright Board in a new tariff, which the Board would doubtless not hesitate to provide - assuming that that blank CDs would still be considered to be an “audio recording medium” - which is probably not the case, but would need to be vigorously contested, given the Board’s past decisions.

Indeed, it is well understood that, while this and the previous Governments both wished their bills to be “WIPO Ready”, any decision to actually ratify the 1996 treaties might need to await the demise or significant reworking of the levy scheme precisely in order to avoid the “doubling” aspect and the arithmetically inevitable major royalty outflow, which could serve no useful purpose whatsoever for Canadian interests and would thus potentially be an acute embarrassment to whatever government were to be in power at the time. 

HK

Querulous Quote of the Day re Bill C-32 re "capacity of the Conservative party to hate people who make art"

The querulous quote of the day re Bill C-32 goes to David Basskin, a Director of the CPCC and CEO of CMRRA. Here it is from itbusiness.ca:

"The way the bill is written, we could never again be compensated for these copies, we don't think that's fair," says David Basskin, a director with the CPCC. "We're really at a loss to understand the capacity of the Conservative party to hate people who make art."

(emphasis added)

Recall, as I pointed out on March 16, 2010, based upon CPCC's own figures, with respect to this "nonsensical" "tax", as the Government calls it:

By the way, the CPCC’s average payout to the ultimate beneficiaries has been at most about $160 per year for those who actually receive cheques and likely much less in the case of actual individual artists. The cost of running the collective, most of which goes to lawyers, consultants and employees of this comparatively small organization, has been about $25,000,000 to date.

So who exactly is denying artists their due? The point is that there is resistance to inefficient collectives that do little or nothing for "people who make art", yet do a lot to the extent of millions a year to to benefit a small number of managers, consultants and lawyers who are associated with the collective. In this instance, the Government is speaking for a very large number of people - including the countless artists who have received very little if anything from a costly and very inefficient levy regime that made little sense in the age of the analogue cassette and makes no sense in the digital iTunes age. Not to mention millions of individual, corporate and institutional consumers who have never copied music but have paid hundreds of millions of dollars in the form of "levies' which are regarded by this Government and most Canadians as "taxes".

A $75 "tax" on iPods, smart phones, etc. - which is the latest amount officially sought by the CPCC - would simply perpetuate a bad business model that will cause massive problems in the Canadian electronics, retail and wireless sectors (for starters), and do less than nothing for most working artists. True, it would work out very well for a small group of managers, consultants, lawyers and lobbyists who strive to keep the levy alive.

True, some publishers and record companies do get more than beer money out of this regime. However, member collectives of CPCC, such as SOCAN and CMRRA, also deduct their own administrative costs or overhead charges on whatever eventually flows from CPCC through them to the "people who make art." We don't know how much gets through to individual "people who make art" because there is very little transparency concerning this system. The Copyright Board leaves such issues to the internal workings of the collectives, which is to say, once again, that there is very little transparency as to how the distribution mechanism works overall - and virtually none at the level of individual "people who make art."

The Copyright Board also seems to think that a levy on iPods, etc. would be a good idea - and has twice tried and failed to impose such a levy. I have been involved in both successful attempts to quash such a levy. The Chairman of the Copyright Board has recently stated with respect to the first decision of the Federal Court of Appeal ruling that the Board lacked jurisdiction to impose such a levy:

Did it impede the orderly development of the private copy regime? Yes. That judgment had far reaching effects on the marketplace. It created market uncertainty, made the daily innocent activities of ordinary consumers illegal and helped to ensure that the regime would become irrelevant as new technology changes the way consumers copy music. An additional and predictable result is that in excess of $50 million in royalties have not flowed to authors, composers and performers.

In my view, an iPod levy will be a great disservice to most "people who make art". Among other reasons, it would be a policy substitute and a poor one at that for the grants, subsidies, cultural funds from collectives and other sources of funding that such people - especially emerging Canadian artists - need and deserve. Copyright collectives hate such talk because such payments are not subject to national treatment, do not benefit the foreign interests that ultimately control the major Canadian collectives, and are not subject to collectives administration overhead or administrative costs - which range from about 10% to 25%. Successive Canadian governments of all stripes fought hard and successfully to preserve Canada's cultural sovereignty with respect to grants and subsidies. It's time we asserted it

HK

Private Copying Levies ("taxes") Dealt Blow by EU Court

The Third Chamber of the Court of Justice of the European Union has dealt a major blow to private copying levies in Europe, where the concept originated in the age when cassette tapes walked the earth, as it were. Here's the ruling.

Here's the gist of it:

53 Consequently, the indiscriminate application of the private copying levy to all types of digital reproduction equipment, devices and media, including in the case expressly mentioned by the national court in which they are acquired by persons other than natural persons for purposes clearly unrelated to private copying, does not comply with Article 5(2)(b) of Directive 2001/29.

...

On those grounds, the Court (Third Chamber) hereby rules:...

3. Article 5(2)(b) of Directive 2001/29 must be interpreted as meaning that a link is necessary between the application of the levy intended to finance fair compensation with respect to digital reproduction equipment, devices and media and the deemed use of them for the purposes of private copying. Consequently, the indiscriminate application of the private copying levy, in particular with respect to digital reproduction equipment, devices and media not made available to private users and clearly reserved for uses other than private copying, is incompatible with Directive 2001/29.

(emphasis added)

HK

"Debunking the Song Tax"

The National Post has another blunt editorial (at least its third this year) on copyright matters called "Debunking the Song Tax" in today's paper.

Here's the bottom line, according to the paper:

-How is the money to be distributed? SAC hallucinates an ultra-powerful, bias-free "collective" that "would track internet and wireless file sharing activity on a census basis. Virtually all sharing on the internet and wireless devices would be tracked," they promise, and "Creators and rights-holders will be paid with a level of speed and accuracy never before possible." Will this happen before or after pigs fly? And are you comfortable letting Eddie Schwartz and Randy Bachman monitor all the filesharing activity on your PC, or would you immediately click on the encryption option that peer-to-peer sharing applications already offer as a matter of course?

We know what choice we would make.

HK