Proposed hikes to private copying tariff draws record number of objectors

An unusual number of individuals, organizations, and companies have objected to the Canadian Private Copying Collective’s (CPCC) proposed tariff on music storage media including blank CD-Rs and MP3 players. There are currently 83 formal objectors to the levy, which would double the tariff collected on CD-Rs and could more than double the price of some new MP3 players. At the same point in last year’s Copyright Board of Canada proceeding, when MP3 devices weren’t on the table, only 59 parties had registered their opposition. The number includes a wide cross-section of interests, with associations, companies and individuals all seeking to modify the proposed 2003-2004 tariffs (CNM Update, Mar. 11/02). Among those objecting to proposed increases to the tariff on CD-Rs to $0.59 and new charges on MP3 players and similar devices of $21 per Gigabyte are: the Association of Universities and Colleges of Canada, the Canadian Association of Broadcasters, the Canadian Wireless Telecommunications Association (CWTA), Radio Shack Canada, The Business Depot Ltd., Wal-Mart Canada Corp., Future Shop Ltd., Texas Instruments Inc., and Creative Labs Inc. The Copyright Board’s rules allow anyone to file an objection, resulting in the participation of more parties than in other proceedings that restrict objectors to "users" or "potential users." Most objections relate to the increased cost of business associated with higher fees, the perception of unfairness in applying the fee to CDs that won’t be used for music, and the fear (expressed by the CWTA) that the tariff will capture too broad a range of products. ASAP-CD Solutions, for instance, writes that: "We have lost some 25% of sales because of the current levy. Our largest portion of business is to print on CD-R media and soon DVD-R media for individual companies to add either their software or printed material to. This levy will hurt that part of our business to a degree that we will not be able to be competitive against the U.S. marketplace." For its part, Cognos Inc., an Ottawa-based business intelligence software company, writes that it uses about 100,000 CD-Rs per year, and that the new levy will cost it an additional $67,580 in fees. "To offset the financial impact of this levy we have been forced to address alternative approaches to fulfilling our needs ..." Cognos writes. "We know that others in our industry are sourcing their media directly from suppliers outside Canada. This has the effect of rendering Canadian uncompetitive , causing many to either move to the U.S. or close down." For the CWTA, whose members are increasingly offering phones and other products capable of playing MP3s, the levy is worrisome. "CWTA members manufacture, purchase and distribute electronic devices…for the purpose of enabling wireless communications," David Farnes, VP of industry and regulatory affairs, writes in the association’s objection. "These products could be considered potential targets for such levies, but it should be noted that these devices are not developed for the purpose of storing of copyright material, they are primarily communication products. We would also challenge the proposed expansion of the definition of ‘blank audio recording medium.’ We believe it to be an overly broad definition." While several of the objectors, notably the association and coalition organizations, have extensive experience with drawn-out procedural wrangling, it will be interesting to see how many stay with the process to its fruition. Many of the individual objectors are part of a loosely-affiliated interest group opposed to strict digital copyright laws and may not be prepared for the paperwork and long, often technical process ahead. Even the CATAAlliance, in the last round of tariff hearings, was unable to proceed with its objection after it failed to comply with burdensome information requests from the CPCC (CNM Update, Nov.1/00).

Proposed hikes to private copying tariff draws record number of objectors

Broadcast | June 14, 2002

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