Administrative issues, appeals remain for Tariff 22

While the Copyright Board of Canada certified the Society of Authors, Composers and Music Publishers of Canada's (SOCAN) Tariff 22 (Internet - online music services) last week, those who opposed the tariff feel the issue is far from resolved for multiple reasons. "The overall impact of the tariff is still certainly very much up in the air," says Jay Thomson, assistant VP of broadband policy at Telus Corp. "The objectors to Tariff 22 are going to be talking together very soon to determine what our options are and what next steps if any we may take. So no decision has been made but we certainly will be gathering to assess what if anything we should do." Making such a decision now may prove difficult given the lack of clarity in the Tariff 22 ruling and the issues surrounding it. For starters, the board only issued a partial ruling on Tariff 22. SOCAN was seeking to collect a percentage of the sales of downloadable songs from the SOCAN repertoire as well as payment for music uses on websites from 1996 to 2006 as they can be considered a "communication to the public by telecommunication of musical works by means of Internet transmissions or similar transmission facilities," but the board felt it was presently only able to certify the tariff that pertains directly to downloads. In delaying part of its ruling, the board acknowledged that the bulk of Tariff 22 royalties will be generated by music downloads, and added that "dealing with the other uses targeted in Tariff 22 raises administrative and wording issues that will require extensive consultations with the parties. The tariff for these uses will be certified at a later date."Claude Majeau, secretary general at the Copyright Board, tells Canadian New Media that the board can't predict how long it will take to finalize the wording of Tariff 22, and no timetable has been set for the issuing the entire tariff. For now, the effected parties have the following tariff rates to digest: 3.1% of the amount paid by the customer on permanent downloads with a minimum of 1.5 cents per file in a bundle and 2.5 cents per file in all other cases; 5.7% of the amounts paid by subscribers for limited downloads with minimums of 54.8 cents per month, per subscriber, if portable limited downloads are allowed and 35.9 if not; and 6.8% of the amounts paid by subscribers for on-demand streams with a minimum fee of 43.3 cents per month, per subscriber."We're still assessing the financial impact of this decision and the rates that were set, and how those rates are going to flow through to customers ultimately and what impact it will have on the fees the customers will have to pay for the online music services they are getting," says Thomson. "It's still early days so we're still looking at what kind of impact the actual rates will have."Although it is early days in terms of the Tariff 22 decision, its certification is in part related to a battle the objectors have been fighting for more than a year. When the board set the tariff for downloaded cell phone ringtones last year, its ruling was based on the determination that ringtone downloads constitute a communication "to the public." It was a ruling that seemed to set a precedent for this latest tariff ruling. "Our belief is will cover ringbacks and, in fact, it covers the whole issue of digital communications via the Internet," VP of legal services and general counsel for SOCAN Paul Spurgeon told CNM last September. However, the objectors, including Telus and its collective partners in opposition - Bell Canada, Rogers Cable Communications Inc. and Shaw Cablesystems Ltd. - continue to argue that downloading over the Internet is not a communication to the public by telecommunication. In fact, they appeared before the Federal Court of Appeal this week to appeal the ringtone decision. But as that appeal is still ongoing, the direction of the Copyright Board on Tariff 22 was almost inevitable. Says Thomson, "Not surprisingly, the board issued a decision that was consistent with its past approach on that very issue...but that certainly is an issue we're in disagreement with the board about." So as those in opposition to the tariff still work to resolve that issue, and the Copyright Board has yet to issue a comprehensive ruling, discussion on Tariff 22 seems far from over.

Administrative issues, appeals remain for Tariff 22

Broadcast | October 24, 2007

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