CAB, SOCAN oppose CCTA’s move for consolidated copyright hearing for TV tariffs

Both the Canadian Association of Broadcasters (CAB) and the Society of Composers, Authors and Music Publishers of Canada (SOCAN) are opposing a motion by the cable industry to consolidate copyright hearings for two television tariffs. The groups warn that such a move would create a logistical and procedural nightmare.The Canadian Cable Television Association (CCTA) filed a motion with the Copyright Board of Canada in October seeking to merge hearings for Tariff 2.A and Tariff 17.A (CCR, Oct. 11/01 & CCR Update, Oct. 17/01). Tariff 2.A applies to the use of music by over-the-air commercial television stations, and is calculated at 1.8 per cent of a station’s advertising revenue base. Tariff 17.A applies to the distribution of pay and specialty television services by broadcasting distribution undertakings (BDUs). It has three components: a fixed rate for small systems, a varying per subscriber rate for portfolio services, and the application of a percentage rate, currently 1.8 per cent, to the wholesale affiliation payments of transmitters to non-portfolio services (Canadian pay and foreign specialty services). SOCAN argues in comments filed with the Copyright Board in late October that "both tariffs stand on their own and apply differently to different users." The CAB says in its Nov. 13 filing that a "consolidated proceeding would be unduly large and expansive and would prejudice the interests of participants affected by only one of the tariffs." The CAB further states: "…A consolidation of tariffs 2.A and 17.A would not balance the interests of participants. Instead it would operate only to confer benefits (arguably) on the BDUs and impose burdens on CAB-TV . A consolidation would simply oblige CAB-TV to suffer through a pre-hearing and hearing process which would be immeasurably longer, many times more complex and significantly more unwieldy than a pure tariff 2.A proceeding." From a revenue perspective, Tariff 2.A is SOCAN’s most important tariff. In its submission, the CAB says "the only issues which have been identified for Tariff 2.A are the appropriate royalty rate and the continuation of the modified blanket licence (MBL) option." In contrast, "Tariff 17.A. raises a much more diverse range of issues which engage the participants in a variety of conflicts. Some of these will be raised for the first time," the CAB notes. In its Nov. 16 response to the CAB’s comments, the CCTA argues that to make the process fair and effective, the Copyright Board needs to look at all the evidence that relates to the entire industry at the same time with a view to applying the same findings of fact to the determination of rates to both tariffs. "Both the SOCAN and CAB submissions fail to address the fundamental underpinnings upon which consolidation orders are justified in any court or tribunal forum," the CCTA writes. "In particular, these include the presence of common evidence and issues and common parties on the one hand, and a desire to avoid inconsistent findings and unwarranted duplication of proceedings on the other." However, the CAB argues that in a consolidated proceeding, it will at a minimum "have its various decisions and approaches affected, potentially muted and possibly contradicted by other user participants." David Kent, a lawyer with McMillan Binch, who is representing the CAB in the process, notes that "the concern from the broadcaster’s point of view is that they have a fairly straight forward set of issues that needs dealing with under Tariff 2.A. And they don’t want to have that wrapped up in a more complex series of issues with a much broader group of participants that you find in tariff 17.A." On the other hand, the CCTA says "the Copyright Board should not be obligated to maintain an inconsistent and disconnected tariff regime for the sole benefit of certain parties who wish to be treated procedurally as if they were insulated from the rest of the industry." But Kent points out that the CCTA can make its points known on both tariffs even if separate hearings are held. "There is no need to have the two heard together. The CCTA can intervene in the Tariff 2 hearing if it chooses. Everyone who is involved in tariff 2 has already consented to that. If it wants to have a say in tariff 2, it can do that by intervening, it doesn’t need to drag the Tariff 2 people into Tariff 17 to get there," he tells CCR. The CCTA contends this approach will waste considerable time and resources on litigating the same issues time after time. It argues that the consolidated pay audio hearing, for example, was more efficient and enhanced the quality of the record than if two separate hearings were held. The cable industry says the CAB is ignoring the Copyright Board’s desire for an efficient and rational way of administering tariffs. "The board has clearly indicated that the present system, whereby the use of music by the television industry is governed by two separate tariffs determined at two separate proceedings held years apart, is flawed and does not promote the level of consistency required," writes the CCTA. It further points out that the fact that a consolidated hearing would be larger than a stand-alone Tariff 2.A hearing is "simply a function of the fact that the television industry has grown into a large, complex industry that includes many different services and players." It is now up to the Copyright Board to decide whether it will accept or reject the CCTA’s motion. Legally there is no date by which it must rule, but industry players expect that a decision will be made by year-end.

CAB, SOCAN oppose CCTA’s move for consolidated copyright hearing for TV tariffs

Broadcast | December 6, 2001

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CAB, SOCAN oppose CCTA’s move for consolidated copyright hearing for TV tariffs

Broadcast | December 6, 2001

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