Ringtone ruling will extend to ringbacks as well: SOCAN

Considering six is almost halfway between zero and 10, it’s fair to say the Copyright Board of Canada took the middle ground in its Aug. 18 decision on Tariff 24, which gives the Society of Composers, Authors and Music Publishers of Canada (SOCAN) a royalty of 6% on revenue from ringtone downloads between 2003 and 2005. "All things considered, we believe the board came up with a reasoned decision," says Paul Spurgeon, VP, legal services and general counsel for SOCAN. "We would prefer to have obtained the rate that we sought…instead they gave us 6%." In its original tariff filing SOCAN proposed a rate of 10% for the communication to the public by telecommunication of musical or dramatico-musical works. And while the comments offered by the objectors – a collective of the Canadian Recording Industry Association (CRIA), Canadian Wireless Tele-communications Association, Bell Mobility and Telus Mobility – likely swayed the board south of SOCAN’s 10% application, they are not happy with any medium the decision represents. "We didn’t feel that the tariff should be applied at all," Mark Choma, director of communications for the CWTA told Canadian NEW MEDIA on behalf of the collective. As reported in CNM affiliate publication Report on Wireless, determining whether ringtone downloads constitutes a communication ‘to the public’ was the critical ruling for the Copyright Board (RoW, Aug. 25/06). In fact, in its decision the board stated: "Unless the transmission of a ringtone involves a communication by telecommunication ‘to the public,’ we have no jurisdiction to fix the tariff." Ultimately, the board found that ringtones were such a communication and ruled in favour of SOCAN, which should set a heavy precedent as they look to extend the tariff to cover ringbacks for 2007. "Our belief is will cover ringbacks and, in fact, it covers the whole issue of digital communications via the Internet," says Spurgeon. Ringbacks, also known as caller ringtones, play a song to a caller instead of a standard ring while they wait for their call to be answered. SOCAN is proposing a royalty of 15% of the retail price of ringbacks for 2007. The rationale for the higher tariff proposal, according to Spurgeon: "Ringbacks a different use…With the ringback you’re hearing the music for a longer period of time." Spurgeon adds that a hearing to determine the royalty rate for ringbacks should be forthcoming. As for ringtones, since SOCAN filed its Tariff 24 proposals for 2006 and 2007 before the board ruled on 2003-2005, it was still asking for a 10% royalty. Spurgeon says SOCAN will be considering whether it will push for that rate in the future, or accept the 6% and concentrate on the ringback case. The objectors remain opposed to the tariff, but seem uninterested in investing any more time or resources to fight it at the moment. Indeed, they simply resubmitted their joint statement from the 2003-2005 filing as their objection to SOCAN’s proposal for 2007. "The argument remains the same," said the CWTA’s Choma. "Again, we’re disappointed that the Copyright Board saw it that way." With the ruling in place, those who objected to SOCAN’s proposal may continue to be disappointed. "The right to communicate to the public by telecommunication is a right in the Copyright Act," says Spurgeon. "First of all, the courts have pronounced on that particular issue and the Copyright Board has as well on a number of occasions….We’re confident based on the reasoning the board put forward to justify rate."

Ringtone ruling will extend to ringbacks as well: SOCAN

Broadcast | September 7, 2006

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