CRIA objects to SOCAN tariff on ringtones, calls for new hearing in February 2005

The Canadian Recording Industry Association (CRIA) has joined with Bell Mobility, Telus Mobility and the Canadian Wireless Telecommunications Association in opposing a proposed tariff on ringtones, Tariff 24 (RoW, Oct. 7/03). The Society of Composers, Authors and Music Publishers of Canada (SOCAN) wants to impose a levy on ringtone suppliers covering the communication right associated with a musical reproduction for the years 2003, 2004 and 2005 that CRIA describes as "excessive" and "unreasonable." Under the proposed tariff, SOCAN is proposing to collect 10% of a ringtone supplier’s revenue up to a maximum of $30,000 for 2003. For 2004, the group ups the rate to 10% of a ringtone supplier’s revenue, subject to a minimum of 10 cents per ringtone supplied. Again in 2005, SOCAN would increase the tariff to 10% of a ringtone supplier’s revenue subject to a minimum fee of 20 cents per ringtone supplied. Writes CRIA in its June 30 objection: " is CRIA’s position that the royalties sought in the Proposed Tariff are excessive, unwarranted and unreasonable, bearing no relation to the value of any copyright that may, in fact, be proven to be in issue in connection with the supply of ringtones by a ringtone supplier to its subscribers. CRIA further states that the proposed royalties are neither fair nor equitable." The recording industry association further notes, however, that SOCAN must first establish that there is a right "to communicate to the public by telecommunication in connection with the supply of ringtones by a ringtone supplier to a subscriber." CRIA questions whether this right is required to supply or use ringtones. "Absent establishing this, the Copyright Board has no jurisdiction to certify the Proposed Tariff," it writes. With a hearing on the proposed rates for 2003 and 2004 previously scheduled for November 2004, combined with the new rates for 2005, CRIA, SOCAN and the other objectors have asked the Copyright Board of Canada to join the 2005 proceeding with those of 2003 and 2004. CRIA says that since the tariff is the same, except for the rates, for all three years, it makes sense to conduct a single proceeding. CRIA also notes that the expanded timeframe will allow the board to give full consideration of a number of important issues, including the common legal and economics issues related to the proposed tariff, up-to-date evidence on the ringtone market, the commercial implications of valuing the various elements of musical works, and the avoidance of duplicative proceedings. In a July 8 letter, CRIA suggests an alternative schedule (see box for details) with hearings to begin on February 15, 2005. Report on Wireless will provide more details in an upcoming issue after the Copyright Board makes a decision regarding the consolidation of rate considerations for all three years. That decision could come as early as July 16. RoW will also continue to follow this issue as developments occur.

CRIA objects to SOCAN tariff on ringtones, calls for new hearing in February 2005

News | July 15, 2004

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