Representatives for Canadian artists, the music recording industry, and Internet service providers are still trying to find common ground on the sensitive issue of ISP liability. They presented their viewpoints before the Standing Committee on Canadian Heritage on April 22 on the proposed Government Status Report on Copyright Reform. The status paper, a roadmap to ratifying Canada’s World Intellectual Property Organization (WIPO) treaty obligations, has come under fire by ISPs by suggesting a royalty might be levied against them to compensate copyright holders for materials downloaded from the Internet. Paul Spurgeon, vice president and general counsel of the Society of Composers, Authors and Music Publishers of Canada (SOCAN), said that, in general, SOCAN "agrees that changes to the policy framework for copyright should not operate to hinder the development of the full potential of the Internet," but he emphasized that the changes also "must not operate at the expense of the creators and owners of the content." Spurgeon said that past decade of experience demonstrates that private agreements and voluntary industry ‘codes of conduct’ have not resolved Internet copyright issues because "they do not address the concerns of those copyright owners who are not a party to such ‘codes of conduct.’" He criticized Canadian legislation for being unclear, and, as a result, "over eight years after it filed an Internet musical works royalty tariff, SOCAN still doesn’t have an approved tariff upon which to license Internet use. SOCAN maintains that framework rules for ISPs and IAPs (Internet access providers) must be clear and simple, and they must assure that those who use their works, within Canada or abroad, will compensate the Canadian copyright owners appropriately. Spurgeon stated that the Copyright Act is in some cases "unclear as to the extent IAPs may be liable for the communication of musical works." "The only practical way to effectively administer its rights in the musical works used on the Internet is to license and collect royalties from the IAPs that provide members of the public with access to the musical works, rather than to license the multitudes that post music on web sites throughout the world," Spurgeon said. Jay Kerr-Wilson, VP of legal affairs of the Canadian Cable Television Association (CCTA), presented an opposing viewpoint, stating that imposing liability on ISPs and requiring them to pay a copyright levy could seriously affect the ISP industry and the Internet in Canada by discouraging innovation and investment and significantly increasing the cost of Internet access, which is currently one of the lowest in the world. Kerr-Wilson believes that imposing liability on ISPs is inconsistent with the approach taken by other countries, such as the U.S., European Union and Japan, and it is "contrary to basic copyright principles." He said: "It would make the currently legal activity of providing Internet access an act of copyright infringement with potentially crippling liability." He added that imposing copyright liability on Canadian ISPs would have "grave implications for the health and future growth of the ISP industry and the development of the Internet in Canada," and it could be "devastating for Canadian Internet users," who would in that case face increased costs for Internet access. According to Kerr-Wilson, this approach would also severely affect Canadian companies trying to connect with customers and market new products and services, because they "would suffer from the dramatic drop of demand for Internet access." He emphasized that the CCTA does not oppose granting to creators the ability to exploit their rights in the Internet environment. "We do not oppose the recognition of a making available right as required by the WIPO Internet treaties and agree with the approach to the right reflected in the treaties. The very notion of a making available right makes it clear that it is the act of making content available without authorization that should give rise to liability." General counsel of the Canadian Recording Industry Association (CRIA) Richard Pfohl emphasized that his association favours WIPO treaty ratification, and said there is no reason why ISPs should be treated differently from many other distributors of copyrighted works when they distribute such copies and make profit from using their facilities for such distribution. "It is not appropriate to create exemption that will require copyright holders, such as the music industry, to subsidize ISPs," Pfohl said. He added that ISPs "should not be above the copyright law, but ISPs should also be subject, under applicable circumstances, to potential criminal liability." Pfohl said that Canadian cultural industries, particularly Canadian music industry, suffer enormous loses through unauthorized use of copyrighted material on the Internet, and the government should protect Canadian cultural industries and artists from the "daily assault on their livelihood." Jay Thomson, former president and speaking on behalf of the Canadian Association of Internet Providers (CAIP), was insistent that Canada must exempt the transmission activities of ISPs from copyright liability, and he suggested that the committee should reject the proposed approach. "CAIP is not opposed to WIPO implementation and we’re not trying to create roadblocks for this committee. It is important to Canada’s and global competitiveness that the matter of liability be dealt in conjunction with WIPO implementation correctly and consistently."Wendy Noss, on behalf of the Intellectual Property Institute of Canada’s copyright legislation committee, urged the committee to amend the Act as soon as possible to clarify the circumstances under which ISPs are liable.