Industry groups appeal Internet tariff

The Copyright Board's October 18 release of the highly-criticized Internet tariff has already triggered the first round of legal appeals. Officially published in the Canada Gazette on Friday, Tariff 22.A allows the Society of Composers, Authors and Music Publishers of Canada (SOCAN) to collect 3.1% on the sale of each song downloaded from music sites such as iTunes or Puretracks. The new royalty rate has sparked criticism from both distributors as well as music producers. Appeals to the Federal Court of Appeal have been filed by Telus Corp., Bell Canada, Rogers Communications Inc., Shaw Cablesystems Ltd., Puretracks Inc., the Canadian Recording Industry Association, the Entertainment Software Association and even SOCAN itself, which takes issue with the treatment of music previews in the decision.The other challenges are not unexpected. The objectors were already appealing the Copyright Board's decision on last year's SOCAN ringtones tariff on the grounds that a downloaded ringtone did not, in their opinion, constitute a "communication to the public by telecommunication of musical works." As the online music tariff was certified based on the same rationale, the objectors were bound to launch a similar appeal. And to further drag out the process, as Canadian New Media reported in October, the board has yet to certify the remainder of the tariff, which relates to royalties for streaming audio-visual and audio content on websites. That decision, expected in the coming months, will likely result in subsequent appeals. As it stands, the following are the Tariff 22.A royalties officially set by the board on Friday: The royalties payable in a month for an online music service that offers only on-demand streams shall be A×B/C, where (A) is 6.8% of the amounts paid by subscribers for the service during the month, (B) is the number of plays of files requiring a SOCAN licence during the month, and (C) is the number of plays of all files during the month, subject to a minimum fee of 43.3¢ per subscriber.The royalties payable in a month for an online music service that offers limited downloads with or without on-demand streams shall be A×B/C where (A) is 5.7% of the amounts paid by subscribers for the service during the month, (B) is the number of limited downloads requiring a SOCAN licence during the month, and (C) is the total number of limited downloads during the month, subject to a minimum fee of 54.8 cents per subscriber if portable limited downloads are allowed, and 35.9 cents per subscriber if they are not.The royalty payable for a permanent download requiring a SOCAN licence shall be 3.1% of the amount paid by a consumer for the download, subject to a minimum fee of 1.5 cents per file in a bundle that contains 13 or more files, and 2.1 cents per file in all other cases.

Industry groups appeal Internet tariff

Broadcast | November 27, 2007

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