Special Update - Wednesday, July 7, 2004A who’s who of the online music industry has lined up against steep new tariffs proposed by copyright owners on digital reproductions (CNM, May 14/04). A broad range of players including online retailers, ISPs, record labels and broadcasters, both in Canada and in the U.S., filed objections late last week to a tariff proposal by the Canadian Musical Reproduction Rights Agency (CMRRA) and the Société du droit des auteurs, compositeurs et éditeurs au Canada Inc. (SODRAC) that would slap a hefty $0.10 per track fee or 15% of gross revenue on permanent music downloads.Canadian NEW MEDIA has confirmed that objections were filed by:·CBC/SRC, represented by Valérie Demers ·CBC/SRC, Sirius Satellite Radio Inc, and Standard Radio Inc., all acting on behalf of a corporation to be constituted, represented by Isabelle Reinhardt ·Canadian Cable Television Association, represented by Jay Kerr-Wilson ·Yahoo! Canada Co. and Yahoo! Inc., represented by Asha Gosein ·Bell Canada, represented by Suzanne Morin ·Canadian Recording Industry Association Inc., and each of its members individually, Moontaxi Media Inc., Napster LLC, MusicNet Inc., Music Match Inc., and Apple Canada Inc., represented by Randall J. Hofley ·Moontaxi Media Inc. (owner and operator of Puretracks) by Richard Dermer ·RealNetworks Inc., represented by Zahavah Levine ·Canadian Association of Broadcasters, represented by Erica Redler ·TELUS Communications Inc., represented by Jay Thomson ·Groupe Archambault inc., represented by Jean-Philippe Mikus ·The board has also received a request to intervene from l'ADISQ (represented by Stéphane Gilker). It is also possible CHUM Ltd. has filed an objection, as well, though confirmation was unavailable at press time.The presence of the music labels on the list comes as little surprise. The labels were taken aback last May at the proposed rates, and quick to say publicly that the tariff came as a surprise and was well higher than what had been previously contemplated in negotiations between themselves and CMRRA. In fact, says CRIA in its filing, a contract between itself and CMRRA supercedes the proposed tariff in accordance with Copyright Act rules. Furthermore, writes CRIA, the proposed tariffs are grossly unfair:“… is the Coalition’s position that the royalties sought in Section 3 of the Proposed Tariff are excessive, unwarranted and unreasonable: they bear no relation to the value of any copyright works that may, in fact, be proven to be in issue with respect to the online distribution of sound recordings of musical recordings of musical works nor do they adequately consider the differing nature of the types of services offered by online music services and the potential copyright liability associated therewith. The Coalition further contends that the proposed royalties are neither fair nor equitable, inter alia, in terms of the proposed rate and minimum fee components thereof,” writes CRIA and its allies.Objections by the broadcasters were also predictable as many radio and television stations eye Internet music sales as an alternative revenue source. ISPs, including cable operators and the incumbent telcos also operate large portal sites, and at least Bell Canada and TELUS Communications Inc. have already begun to sell music through those sites in partnership with Moontaxi.Apple, Napster and MusicNet would not comment last spring, but their objections also come as no surprise since a 15% of revenues charge has the potential, according to experts, to cripple the young industry. More interesting is Moontaxi Media. While the Puretracks operator’s objection would be the same as its online retail rivals, the company was at pains last spring when it spoke with CNM to maintain a position of neutrality. It remains to be seen on what grounds it is objecting to the proposed tariff, and how active a role it will play in a hearing. The company is now on record not just once, but twice under separate covers, objecting to the CMRRA’s proposal.It also remains to be seen what the objections are by the CBC/Sirius/Standard group. The group has applied to the CRTC for a licence to operate a digital satellite radio service, as have CHUM and another group headed by XM Satellite Radio Inc. It is not immediately clear at press time whether the group is objecting to the proposed tariffs on Internet streamed and downloaded music.Canadian NEW MEDIA will have further details in an upcoming issue.