Proposed increases to blank media levy facing strong opposition from CATA

New media advocates and the recording industry are battling again over blank tape levies as the two sides prepare for a hearing on higher rates this fall. Black storage media such as blank cassettes, rewriteable CDs and mini discs have been subject to a small fee for six months now following a controversial decision last year which many are calling a cash grab by record companies. This fall, the Copyright Board will hear a new request by the organization responsible for collecting and distributing the levy, the Canadian Private Copying Collective (CPCC), for significant hikes to the fees – in some cases doubling current levels. Current Blank Media Fees in CanadaMediaLevy per unitCD-R & CD-RW (non audio) 5.2 cents per CDMinidisc/CD-R Audio60.8 cents per CD/discCassette tapes (under 40 minutes)no levyCassette tapes (40 minutes or more) 23.3 cents per tapeDAT, video cassettes, hard drives, microcassettes, MP3 playersno levy As it stands right now, the fee for audio cassettes, 40-60 minutes would rise from $0.233 to $0.50, the fee for cassettes 60-90 minutes would now be charged at $0.75, and cassettes over 90 minutes at $1.00. The CPCC is asking the board to increase the levy for MiniDiscs, Audio CD-R and Audio CD-RW from $0.608 to $1.75 each and the tariff on other CD-R and CD-RWs from $0.052 to $0.5. Two main lobby groups, the Canadian Storage Media Alliance (CSMA) and the Canadian Advanced Technology Alliance (CATA), are gearing up to fight the proposed increases, calling them unfair to the new media industry and detrimental to its growth. The concern is that the levy casts too far a net. The legislation was introduced last year to ensure artists, producers and performers are compensated when consumers copy their music for private use. By introducing a blanket levy for all recordable media, the government, in effect, legalized home taping. During last year’s Copyright Board hearings into the proposed legislation, both the CSMA and CATA argued unsuccessfully that the levy unfairly penalizes its industry (CNM, July 13/99). It recommended that the levy be confined to blank audio cassettes – which are used by individual consumers for sound recording – and exclude products that are more common to business, such as CD-Rs or rewriteables. New media companies routinely use CD-Rs as data storage devices, and for technical manuals and marketing materials. The CSMA and CATA will present their arguments again when the Copyright Board meets October 24 to review the CPCC’s application for a rate increase. The tribunal has strictly limited the scope of the proceeding to the fee increases, excluding any debate on eliminating the fees entirely. CATA’s executive director, David Paterson, says he will fight hard on behalf of his industry to try to ensure the levies don’t move higher than current levels. "Among the members there is a very high level of annoyance and frustration with this thing," he told Canadian NEW MEDIA. "They use their CD-Rs in their businesses. They’re not using them to copy music and the fact that they have to pay this levy to a bunch of music companies for something that somebody else does, does not impress them in the slightest…. It adds up to a lot of money…. It’s money that they resent having to spend." Paterson says his membership is still producing their CDs in Canada, but worries they will flock to the U.S. if the levy is raised. A survey of CATA members found that 75 per cent would be willing to move their production operations for CDs south as a result of the tariff. "Fifty cents? In bulk, CDs only cost a dollar I think. So, at 50 cents per CD it starts to look like a different cost proposition," says Paterson. "The truth is that the technology is in the process of changing the music business, and the music business has not yet figured out how to deal with this. Right now, they’re flailing around. They’re blaming everybody except themselves for their problems, and that’s what we’re faced with here," he adds. Concerns are also beginning to surface about the prospect of extending the levy to next-generation storage devices, including disc drives and portable MP3 devices. While there are whisperings of applying a similar levy to those devices, Paterson doesn’t believe it will be possible. "I’m sure they would love to, but there’s just no practical way to do this. What are you going to do? Charge a levy on a 10GB hard disc on the theory that someday they might use it to record music? Give me a break."

Proposed increases to blank media levy facing strong opposition from CATA

News | 06/28/2000 4:00 am EDT

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