Songwriters, recording industry and ISPs square off over file-sharing levy

ISPs and Canada's major record labels oppose the Songwriters Association of Canada's proposed $5-a-month Internet levy as the solution to curtail free peer-to-peer downloading. Although the ISP levy concept has gained some momentum in other jurisdictions, the resistance from Canada presents a major roadblock for the SAC. "The proposal will replace or undermine market-driven business models," said Aaron Sawchuk, the Canadian Recording Industry Association (CRIA)'s director of enforcement and regulatory affairs at the Internet Law: the Second Wave conference in Toronto late last month. " we will legitimize illegal file sharing and undercut artistic control and choice." Rather, Sawchuk said CRIA is exploring a number of different business models to see what is the most effective way to distribute music online. Those business models include advertising, such as SpiralFrog, pay-per-download service such as iTunes, and subscription, such as Rhapsody, which includes a collection of four million songs. As Canadian New Media reported in November, SAC believes the best solution for fans and musicians is to attach a monthly levy (currently estimated at $5) per Internet household to be distributed to the music industry through a collective. "The content is now travelling through the pipeline for free," said Eddie Schwartz, director and acting president of SAC. "This is hurting the creative community, and the numbers in that community decrease on a year-to-year basis." He added that the vast majority, about 90% of all download and file sharing activity, is done illegally rather than through legitimate services. CRIA has also been outspoken about the damage P2P file-sharing is doing to the music industry, but Sawchuk said the SAC proposal runs counter to many international treaties relating to copyright law. ISPs reject the levy on other grounds, saying it spreads the liability of the minority across the entire base of broadband subscribers in Canada."This isn't a licence. It's a levy. People who don't download music and probably never will are paying for something that they are absolutely not using. Those who provide the connectivity should not be liable for copyright infringements," said Ken Thompson, director and counsel for Roger Communications Inc., which has free and for-pay online music services of its own Thompson likened the proposal to the Canadian private copying levy, which adds a fee to the price of a blank compact disc as a means to compensate music creators. If the levy represents an effort to curb piracy, ISPs voluntarily help to fight piracy in Canada, said Thompson. The CRIA also rejects the SAC proposal because it accepts P2P file-sharing as a fact of life in the digital world that can't be curtailed. CRIA believes developing Canada's for-pay download market will go a long way towards limiting the impact of P2P. Shwartz, however, noted that ISP levies are gaining momentum in other jurisdictions and Warner Music in the U.S. recently supported a similar ISP-based licensing program. And while the online music debate has been ongoing for years now, the fact that monetizing solutions are being debated puts it ahead of the film and television industry which is facing the same problems from downloading.

Songwriters, recording industry and ISPs square off over file-sharing levy

News | 04/08/2008 10:43 pm EDT

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