New right proposed by government could upset competitive access to content

A controversial proposal to give performers and record companies new powers to authorize the use of their music online has stirred up a debate over who will control Internet distribution. In their current copyright reform process (CNM, June 28/01), the departments of Canadian Heritage and Industry Canada have proposed a new "right of making available" for performers and producers that would replace the existing right to remuneration with broad new power to authorize the use of their recordings. Opponents of the change charge that if adopted, the new right would restrict the open distribution of music and entrench the competitive position of vertically-integrated media conglomerates. Those in favour of changing the law say several mechanisms exist to prevent anti-competitive behaviour. In the meantime, the proposal has opened up a flood of related requests for more copyright control by authors and others concerned that performers and producers’ rights might eventually supersede their own. At the heart of the debate is a new right mandated by Canada’s participation in the World Intellectual Property Organization treaty to boost the control exercised by performers and record companies. The "right of making available" would give those parties an exclusive right to authorize use of their works online. Currently, the rights of those parties are considered "neighbouring", meaning they are entitled to compensation when their work is used, but have no say over when and how their works are communicated. By contrast, authors have the exclusive right to authorize the use of their work, but permission is granted automatically to other parties through payment of a Copyright Board of Canada-set tariff. In response to the new right being proposed for performers and record companies, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) and others are calling for an equally exclusive and explicit right to be given to authors. The Canadian Association of Broadcasters (CAB), which represents Canadian private radio and TV stations, has thus far taken the strongest stand cautioning the government over the potential fall-out from creating the new right. In its submission on the issue filed last month, it points out that too much control by the author of works could eliminate the music available to radio stations attempting to adapt and advance their business to new technologies, such as the Internet. "From an access perspective, such a degree of control (by creators) becomes worrisome when rights owners are large corporations or corporate oligopolies vested with the ability to deny access to or seek unreasonably high rates of remuneration for a significant repertoire of works," the CAB brief states. The association points out that if the Copyright Act is revised to grant "right of making available" rights, it could be used by creators "to disable legitimate and non-deleterious uses," such as radio stations engaged in streaming audio. The CAB argues that creators are adequately compensated for use of their works by rights fees paid, and that explicit authorizations of individual users and exclusive licences are not necessary to maximize the value of the work of the creator. The worry over potentially anti-competitive behaviour isn’t confined to the CAB. Canadian Cable Television Association (CCTA) lawyer Jay Kerr-Wilson tells Canadian NEW MEDIA that if the Act is amended to include exclusive rights for all three parties to the debate, the business of offering music online could be bogged down by competitive negotiations. "You’d need three people to sign off before the performance of a particular musical work is offered for download. That can be tricky. It could mean three people arguing about what the model’s going to look like…That’s a fairly complex business relationship that’s got to be worked out, and the more people who have veto power over that relationship, the trickier (it) is going to be." He says that it’s not certain that the new right would upset the current balance, however. In the U.S., the major record labels have created two new online music services, and he notes that competitive concerns have apparently been satisfied, even if the Department of Justice has been examining the issue on anti-trust grounds. To avoid difficulties, however, the CCTA has proposed that the new rights be made compulsory on payment of a tariff such as Tariff 22. "What we’re saying is if you lock that content away now with amendments to the Copyright Act, that’s done. Once that door’s locked, it’s not going to be unlocked. Until we have a sense of what the technological solutions to copying are going to be and once we have a sense of what the business model is and whether we can work out a free-market business on all these issues, don’t rush to start locking up content or handing out rights where none exist. Now, it could be that the market works and contracts can be done and there’s going to be competitive supply of music and there’s no problem. But, it hasn’t happened that smoothly in the United States, and there’s no indication it would happen that smoothly in Canada." Other parties share the CCTA’s concerns. For its part, the Canadian Library Association (CLA) is concerned that if a new right is granted to publishers, then online copies must be classified as "published" so that the copyright will eventually expire. It’s concerned that the new right being proposed could weaken provisions for fair dealing in works by academics and others without that proviso. "All of these are, for us, variations on the same theme – the capacity for a dominant supplier to effectively get rid of the notion of a public domain," says Karen Adams, director of library services and information resources at the University of Alberta, who co-wrote the CLA’s position paper. "It’s the capacity for Microsoft to lock up the universe, at some point. It’s the kind of rules without which no one would have access to Shakespeare anymore." Others say new rights of making available don’t necessarily have to result in restricted or closed access to works online. Bell Canada, which has written in favour of the proposed right of making available says that the government can put provisos on the right within the WIPO framework to ensure a competitive balance. Suzanne Morin, Bell’s senior counsel, regulatory law, tells CNM that, "one of the options, for example, in trying to make sure that the balance isn’t tipped in the wrong way…is putting some conditions, maybe, around the making available right so that record companies couldn’t refuse consent in just any situation." While Bell is reserving making specific proposals until further industry consultation is done, Morin suggests that consent might automatically be waived if there are appropriate technological measures in place to protect the work. "The whole point of this is a balance between rights-holders and users and everyone else in the communication chain. If you’ve got content, but it’s not available for everyone to listen to, what’s the point? If rights-holders feel they have the tools they need to protect their content and be compensated for it and put it online, then everyone wins." One of the potentially odd outcomes to the process might be that performers and publishers are given new rights of making available, but authors are not. It has been assumed until now that authors’ rights of making available were implicit in their right to communicate to the public by telecommunications, a principle contained in the disputed Tariff 22 decision. But, some industry advocates say that doesn’t go far enough. If performers and publishers are given an explicit right of making available, authors want it too, says Paul Spurgeon, VP of regulatory affairs at SOCAN. "We just want to ensure that authors – that writers are going to be represented here and that their rights are protected and they’re going to get paid when their rights are exploited in the digital media." He’s not concerned that new rights of making available might create anti-competitive behaviours. "In the absence of any kind of competitive regime, there are laws that ensure that people do not abuse their dominant position," he says.

New right proposed by government could upset competitive access to content

Broadcast | November 2, 2001

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