CAB - Key Issues - Copyright Reform

The Case for Copyright Reform

	Private broadcasters have urged the government to take a balanced approach to copyright reform – one that considers the needs of users and promoters of copyrighted works, and the needs of creators.
	The government has recently introduced amendments to Canada’s Copyright Act and emphasized the importance of ensuring the Act balances the interests of creators with those of Canadians who use digital technology.
	To highlight the interests of significant business users, several prominent Canadian organizations – including the CAB, Bell Canada, Rogers Communications, TELUS and Google, among others – have formed the Business Coalition for Balanced Copyright (BCBC). These organizations play a central role as cultural contributors and promoters in showcasing the most engaging content from Canada and around the world.
	The Coalition and its members have presented a position paper to the Ministers of Heritage and Industry illustrating the commercial importance and cultural benefits of ensuring the copyright regime is fair to all users. This becomes increasingly important as digital media proliferate, as new rights are claimed by rights holders and, following the 1997 amendments to the Copyright Act and the 2008 tabling of Bill C-61 proposing further changes, new rights are being created.
	All in all, there has been a significant increase in the responsibilities and tariff-setting duties of the Copyright Board of Canada, the regulatory body which determines the payments to be made by users of copyrighted works to various collectives representing rights holders.
	The Board’s decisions are affecting more activities and more Canadians. It is responsible for tariffs and tariff proposals estimated to be worth more than $500 million each year. Canadians and Canadian businesses large and small such as stores, movie theatres, broadcasters, and exhibitions and fairs, are subject to copyright payments. Soon, podcasters and webcasters will be, too. Tariffs certified by the Copyright Board cover uses of music ranging from broadcasting, Internet downloading, purchasing blank CDs and ringtones to concerts, and commercial establishments, among many others.
	Given the Copyright Board’s expanding role, the complexity that new technologies bring as they relate to copyright, and the increasing impact of the Board’s decisions on Canadians across the country, it is important that all stakeholders examine the Board’s mandate and seek a new approach. The CAB considers it timely for the government to provide a Direction to the Board, much as it has done with the CRTC (under the Telecommunications Act) and other boards/commissions.
	The overall objective of the Direction would be to: provide greater certainty, clarity and predictability in copyright rate-setting for the benefit of copyright owner and user stakeholders; and provide greater accountability to government, stakeholders and the public.

In Brief – the Reproduction Right Exception

Broadcasters have requested an amendment to the Copyright Act that would provide a meaningful broadcaster exception for technical and incidental copies made within their operations. What does this mean? When stations receive digital music files from music labels, they use digital technology to transfer them into a usable form and store them on their computer servers. Some copyright collectives claim that when stations use technology to make these files broadcast-ready, they are copying the music and thus triggering a payment based on what is known as the reproduction right. Stations are now facing five copyright payments for the same activity – putting music on air.

Broadcasters are calling on the Canadian government to build a reproduction right exception into the Act, as many other developed countries have done. With the exception in place, the incidental process of making digital music files broadcast-ready would not trigger any payment in addition to the payments made to broadcast the music.

Private Broadcasters and their Copyright History

	The CAB was founded in 1926 by a pioneering group of broadcasters to address their concerns around copyright legislation. Eighty years later, copyright remains one of the foremost issues for broadcasters.
	Today, the broadcasting industry contributes significantly to Canada’s economy, employing some 23,000 people, contributing local perspectives across the country through news, current affairs and other programming, and raising tens of millions of dollars for various charitable initiatives in our communities.
	Broadcasters are owners and users of copyrighted works and therefore have an interest in fair copyright balance.
	Broadcasters believe in fair payment for the music they use, however the layers and costs of copyright payments have increased beyond the point of fairness.
	Broadcasters face an increasing burden of tariff payments on their businesses. Commercial radio, for instance, pays three separate tariffs: the SOCAN tariff to composers, authors and publishers, the NRCC tariff for neighbouring rights to performers and record companies, and the CMRRA/SODRAC tariff for reproduction rights to composers, authors and publishers (essentially the same copyright owners as SOCAN represents).
	In March of 2007, another reproduction right was proposed by the recording industry (AVLA/SOPROQ), seeking $50 million in industry revenues.
	The collective administration of copyright in Canada has led to an increasing burden of tariffs and increasing complexity for rights owners, users and the regulator alike.
	Copyright payments for private radio broadcasters have increased dramatically since 1997, growing from $27.9 million to $73.9 million in 2006, and are expected to increase again for 2007.
	Canada’s private broadcasters are the main source of revenue for many music copyright collectives. For 2007 and beyond – and possibly for previous years, if tariff payments are assessed retroactively – private broadcasters will likely face additional tariff payments for online use of music.