Copyright Board dismisses consolidation motion after flurry of opposition

A controversial proposal to consolidate three different Copyright Board of Canada processes dealing with digital music was denied by the board on May 11. On April 28, Bell Canada on behalf of itself and a group that includes the Canadian Cable Telecommunications Association and the Canadian Recording Industry Association, filed an application with the board to try to force a consolidation of several tariff hearings. The processes consist of the online music services tariff submitted last summer (CNM, May 14/04), and the webcasting tariff filed in late March this year (CNM, April 15/05), both filed by CMRRA/SODRAC, as well as the SOCANs’s recently re-filed Tariff 22. The Canadian Association of Broadcasters had supported the motion, as had Groupe Archambault in a separate filing. The motion drew heavy opposition from the rightsholder groups involved. In separate letters to the board, CMRRA/SODRAC and the Society of Authors, Composers and Music Publishers of Canada (SOCAN) had expressed strong opposition to the request to combine the tariff procedures as they said it would result in unacceptable delays to the finalization of several processes now before the board. In its filing, Bell writes on behalf of the parties that it believes a consolidated hearing would save everyone the time, effort and cost of submitting evidence it says would be overlapping through the various hearings. It says the beneficiaries of any royalties decided on in the separate proceedings would be the same – authors, composers and publishers – and that the users that would pay the rates will also be substantially the same. Further, Bell writes, the evidence that will be used to determine the royalties for both reproduction rights and for communication rights, and charged for both streaming and downloading, will be essentially the same. It notes: "The facts upon which the evidence will be based will be common to each of the proposed tariffs. While the interpretation given to this evidence may clearly differ, the consideration of the extent to which the communication and reproduction rights apply to the relevant activities and the appropriate royalties that should be paid will lead to the examination of many of the same facts. These would include, for example, the technical aspects of the operation of online music service providers, the extent and nature of music use by online music service providers and the competitive environment in which rights holders and users carry on business. "A determination of the value of both the reproduction right and the communication right of the same online music use should be considered at the same time. In this way, the Board will be able to consider in the context of a consolidated proceeding the total impact that these proposed tariffs together will have on the various targeted online uses of music. The online music services industry is an industry that requires the investment of significant resources and is still in a comparatively early stage of its development. The alleged implication of both the reproduction and communication rights in these three proposed tariffs is inter-related in that there is a common pool of revenue out of which royalty payments must be made. This, in itself, is a compelling reason why the Board should hold a consolidated hearing. In essence, there is only one pocket to pay each of the collectives." The board, which is master of its own procedures and has full authority to consolidate the tariff processes if it wishes, has already followed this course in other hearings, Bell says. For example, it notes that the distant television signal retransmission tariff, SOCAN and NRCC commercial radio tariffs, the SOCAN and NRCC pay audio tariffs, and the SOCAN 2.A commercial television and 17.A non-broadcast television procedures are each a precedent for combining hearings when there are "financial and administrative efficiencies for all concerned." The two collectives, however, disagreed. In its May 5 response to Bell’s motion, SOCAN argues that the differences between its new Tariff 22 procedure and the CSI tariffs on webcasting and downloading are too different to lump together. In its objection, SOCAN notes that it has already been through nearly a decade-long board and court proceeding on its Tariff 22, and that introducing discussions about mechanical rights can only further delay the advanced reproduction right process. "All the fundamental issues will have to be determined afresh for those tariffs, including that of a statutory base for the tariffs and its scope in the context of the reproduction right. These issues pertaining to the CSI tariffs are foreign to Tariff 22. Moreover, the fundamental issues for Tariff 22 have already been thoroughly canvassed in the Board’s initial decision and the judicial review by the courts. Tariff 22 should not be dragged into a process that will be focusing on issues which have nothing to do with Tariff 22, and SOCAN should not be subjected to the burden of such a process and its concomitant and inevitable delays to SOCAN having its right crystallized in Tariff 22." SOCAN’s peer CSI makes many of the same arguments in its objection to the consolidation proposal. CSI, which filed a proposed tariff on music downloads a year ago, says combining all the music tariff hearings into one will delay approval of a final rate for its download royalty indefinitely. It writes: "Over the past eight months in particular, CSI has committed very substantial time and resources to the proceeding before the Board concerning its Online Music Tariff. The Bell Group’s belated request to have CSI’s Online Music Tariff delayed for an uncertain time and to have it consolidated with SOCAN Tariff 22 is unjustified and prejudicial to CSI, which has been proceeding in good faith in consultation with both Objectors and the Board. The resources committed so far would be largely wasted; the hearing would be pushed indefinitely into the future – contrary to the Bell Group’s assertion – and CSI would be forced to mesh its narrowly focused tariff with the extraordinarily complex and broadly defined SOCAN Internet tariff. In the process CSI would almost certainly incur greatly increased expenditures related to the defence of its tariff." In its April 28 filing, Bell and its partners had suggested that a consolidated hearing could take place late in 2006 or early 2007. On May 11, the board dismissed the matter, writing succinctly: "Further to CSI’s letter of April 18, 2005 and the subsequent exchange of correspondence on Bell’s motion to consolidate proceedings on CSI’s Online Music Services Tariff, CSI’s Webcasting Tariff and SOCAN Tariff 22, the Board denies the motion. It reserves the right to re-examine the question of consolidation (or partial consolidation) of hearings at another time and in another context."

Copyright Board dismisses consolidation motion after flurry of opposition

News | 05/13/2005 4:00 am EDT

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