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Music Canada at the Copyright Review: “Illegal Content is Drifting Away”

Michael Geist Law RSS Feed - Thu, 2018/06/14 - 10:25

Music Canada was one of several witnesses that appeared before the Standing Committee on Industry, Science and Technology this week as part of the copyright review. The group continued its campaign on the so-called value gap, largely ignoring huge increases in streaming revenues with claims about legislative reforms that bear little resemblance to the Canadian experience. While those arguments will be old news to the committee members, it was the discussion of piracy and government handouts that merit attention.

With respect to piracy, the industry acknowledged that unlicensed streaming has largely disappeared. When asked about the YouTube music channel Vevo, Music Canada’s Graham Henderson responded:

“98% of everything that’s on YouTube is licensed now, right, because we’re all remunerating it. The days of it all being illegal content is drifting away.”

Henderson went on to say that he wasn’t exactly sure who Vevo is, an odd comment given that it is owned by music labels Sony Music Entertainment, Universal Music Group and Warner Music Group. In fact, Vevo recently struck an advertising deal with YouTube that highlights how the industry is capitalizing on the potential of ad-based streaming services.

Yet even more remarkable was the committee discussion on one of the four main “asks” from the music industry. After Henderson opened with a specific request for an annual $40 million handout from the government for private copying (the lack of payment being implausibly characterized as “an unfair subsidy”), committee members asked for specifics. It started with MP Frank Baylis:

Baylis: I’m going to talk, then, about private copying. I think, Ms. McAllister and Mr. Henderson, you brought that up. When we used cassettes, discs, and blank CDs, there was a levy put on them. That doesn’t exist, I believe you said, due to a court case. It doesn’t exist, let’s say, when iPod came out, or my phone that has music. Do I understand and maybe you could elaborate that you’d like to see it applied to these mediums, and what amounts? Do you have any amounts that you’re thinking of? How would you see that being distributed among the artists? I’ll ask both of you.

Henderson: What’s being asked by the community, and I think we’ve all aligned on this, is not to
impose a levy on consumers but to seek a fund, a temporary four-year fund. The number that has come up is about $40 million per year. That is, therefore, not a levy. It becomes something that comes out of Treasury, and it’s a decision that the Government of Canada will have to make as to whether it feels it’s important enough to remunerate artists and others for private copying, which, by the way, is what happens elsewhere in the world, often through levies. But that’s not our proposal.

After Henderson called it temporary and another witness reiterated that the fund would be a short term measure as the government developed new legislation to apply the tax to all devices, MP Dane Lloyd questioned the fairness of a broad based device tax:

Lloyd: If it’s just a blanket levy on a device, wouldn’t you admit that there are people who could buy these devices who won’t be infringing on any copyright?

Henderson: I think the important thing is if you were to go the fund route, then we’re not worried
about impacting consumers.

Lloyd: That’s the short-term route.

Henderson: Yes, but it could be the long term. The point would be that the government is recognizing the importance of performers and others getting paid for this type of copying.

In other words, despite having said it was a temporary measure minutes earlier, Henderson switched gears to argue it could be long-term. In fact, as Lloyd continued, Henderson acknowledged that he opposes a levy on devices:

Lloyd: So in my last 30 seconds, you would say there’s no better way that you can think of to implement a levy than to put a levy on devices?

Henderson: Well, I personally think it should be a fund.

Having now acknowledged that he does not support a levy on devices and would like the government handout to run on a long-term basis, MP Mary Ng wanted more details and Henderson desperately wanted to change the subject:

Ng: So beyond the four years then, we talked about moving towards a system where there could be levies, and then the levies would actually generate the income. If I think about it at the macro level, the income of the content creators has been so disrupted because of the overall disruption following the emergence of the Googles, Youtubes, etc., right? So how do we get to a place, then, where in that rebalance the content that is created by the creators then has a fair compensation in the new world? Right? A fund is a fund but presumably, somewhere down the road, you’re going to
have to increase it because there’s more content generated, etc., so that’s not sustainable.

Henderson: No, I think that this is absorbing a lot of attention here today, but it’s actually a minor
piece in the puzzle.

What message did the Music Canada appearance leave the committee on the issue of a device copying tax or massive government handout? Presumably with the view that it is asking for $160 million for copying despite acknowledging that in a streaming world “illegal content is drifting away”, admitting that it actually opposes a levy, and that what it originally billed as a “short term” solution is really a long-term expectation that taxpayers will spend hundreds of millions of dollars for non-existent copying.

The post Music Canada at the Copyright Review: “Illegal Content is Drifting Away” appeared first on Michael Geist.

Off the Rails: How the Canadian Heritage Copyright Hearings Have Veered Badly Off-Track

Michael Geist Law RSS Feed - Wed, 2018/06/13 - 11:52

The Standing Committee on Canadian Heritage has conducted several weeks of hearings as part of its study on Remuneration Models for Artists and Creative Industries. While the copyright review is the responsibility of the Standing Committee on Industry, Science and Technology, the heritage committee was asked to conduct a study to help inform its work. The mandate was described in the following motion:

That the Standing Committee on Industry, Science and Technology request that the Standing Committee on Canadian Heritage conduct a study, in the context of copyright, on remuneration models for artists and creative industries, including rights management and the challenges and opportunities of new access points for creative content such as streaming and emerging platforms.

That Standing Committee on Canadian Heritage call upon the expertise of a broad range of stakeholders impacted by copyright to ensure a holistic understanding of the issues at play.

That Standing Committee on Canadian Heritage provide Standing Committee on Industry, Science and Technology with a summary of testimony and recommendations related to the items mentioned above for the parliamentary review of the Copyright Act.

The study still has a long way to go as the committee is accepting requests to appear until September 28, 2018 and briefs until December 14, 2018. Yet to date, the committee has done little to meet its actual mandate of hearing from a broad range of stakeholders to explore remuneration models and emerging platforms. Instead, it has largely provided a forum for some creator groups, particularly copyright collectives, to get a duplicate opportunity to present their case for reforms.

The recent witnesses bring few new ideas or even updated data on new business models. For example, on May 29th, the committee did hear from one musician from the Jerry Cans, but more of the time was allocated to the Canadian Private Copying Collective to argue for a $160 million handout as an alternative to taxing the sale of all digital devices in Canada. On May 31st, music groups emphasized reforms such as copyright term extension, a tax on all smartphones, the imposition of Cancon requirements on online music services, ISP licensing, and ISP liability for the activities of their subscribers. It was more of the same the following week with many more music collectives including Re:Sound and SOCAN raising the same issues that will come before the Industry committee.

Over a two week period, the committee heard from one artist appearing on his own behalf and 17 copyright collectives, publishers, rights management companies, and other music associations:

  • Society of Composers, Authors and Music Publishers of Canada
  • Canadian Independent Music Association
  • ole
  • Society for Reproduction Rights of Authors, Composers and Publishers in Canada
  • Artisti
  • Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ)
  • Re:Sound Music Licensing Company
  • Songwriters Association of Canada
  • Canadian Music Publishers Association
  • Guilde des musiciens et musiciennes du Québec
  • Professional Music Publishers’ Association
  • Alliance nationale de l’industrie musicale
  • Canadian Federation of Musicians
  • Canadian Private Copying Collective
  • Conseil québécois de la musique
  • Music Canada
  • The Jerry Cans
  • Société professionnelle des auteurs et des compositeurs du Québec

Committees should hear from a wide range of stakeholders representing all perspectives, however to date, there has been no user representation, no innovative business, and few artists appearing on their own behalf. In the music context, where are the streaming services? Where are the other businesses that are finding innovative ways to use music in the digital environment? Where are the artists with experience in the digital marketplace?

The problem with the study is not limited to the one-sided perspectives. The hearings have also directly overlapped with the work of the Industry committee raising questions of the need for a duplicate set of hearings. Rather than supplementing the Industry committee with a focus on remuneration models for artists and creative industries as required by the mandate, much of the Heritage committee discussion emphasizes tired reform proposals such as term extension or copying taxes. In fact, witnesses at Industry have referenced their Heritage appearances, suggesting there is little reason for both if the Heritage committee veers far from its mandate. There are still many months to go, but getting back on track requires repositioning the hearings consistent with the original motion and taking the instructions calling for a broad range of stakeholders seriously.

The post Off the Rails: How the Canadian Heritage Copyright Hearings Have Veered Badly Off-Track appeared first on Michael Geist.

Canadian Music Industry Wants Government to Pay Copying Fee for Every Smartphone Sold in Canada

Michael Geist Law RSS Feed - Mon, 2018/06/11 - 10:10

Last fall, months before the start of the Canadian copyright review, the Canadian Private Copying Collective, the collective that administers the tax on blank CDs that has long advocated for extending the payments to iPods and other electronic devices, met with senior officials at Canadian Heritage including Deputy Minister Graham Flack and Melanie Joly’s chief of staff Leslie Church (over two days the collective also met with politicians such as Dan Ruimy, Peter Van Loan, and Pierre Nantel). According to documents released under the Access to Information Act, the collective arrived with a startling demand, asking the federal government to pay $160 million over the next four years to compensate for music copying.

The demand, which now forms part of the platform of demands from the Canadian music industry, is based on a $40 million annual handout. While the industry has not provided details on how it arrived at its figure, notes (likely from Graham Flack) reveal the basis of the demand.

 

CPCC meeting notes, obtained under Access to Information Act

First, the industry argues that legislative reform will take too long, so rather than changing the law to apply to all smartphones and similar devices sold in Canada, it wants the government to pay what it believes would be the equivalent revenues directly out of tax revenues. Second, the source of the $40 million is revealed in the notes. The CPCC wants a copying payment for every device sold in Canada. It estimates that in Europe there is a per device copying fee of $3.50. In Canada, that would yield $40 million.

The demand is striking for several reasons. First, private copying of music has gradually diminished as Canadians gravitate to subscription services such as Spotify or ad-based streaming services that remove the need for copying. The government memo notes that “a functional, fully-licensed music streaming marketplace reduces the practice of unlicensed copying by consumers.” Second, the government also notes in the preparatory materials that private copying revenues are declining in many countries including Japan, Poland, and Portugal, which recognize the diminishing relevance of music copying in a subscription-based world.

As I wrote in a piece on the broader music industry demands, the Canadian music market is growing much faster than the world average, with Canada jumping past Australia last year to become the sixth largest music market in the world. Music collective SOCAN, a coalition member, has seen Internet streaming revenues balloon from $3.4 million in 2013 to a record-setting $49.3 million in 2017. Yet despite the success stories, the CPCC and the broader music industry wants a $160 million handout based on the premise that every device sold in Canada should have a music copying fee attached to be paid by taxpayers.

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The CRTC’s Fundamental Flaw: Broadcasting May Be the Internet, but the Internet is Not Broadcasting

Michael Geist Law RSS Feed - Fri, 2018/06/08 - 10:52

Canada’s communications regulator last week reversed decades of policy by recommending that the government implement new regulation and taxation for internet services in order to support the creation of Canadian content. The report on the future of program distribution, which will surely influence the newly established government panel reviewing Canada’s telecommunications and broadcasting laws, envisions new fees attached to virtually anything related to the internet: internet service providers, internet video services, and internet audio services (wherever located) to name a few.

My Globe and Mail op-ed notes with the remarkable popularity of services such as Netflix and YouTube, there is a widely held view that the internet has largely replaced the conventional broadcast system. Industry data suggests the business of broadcasters and broadcast distributors such as cable and satellite companies won’t end anytime soon, but it is undeniable that a growing number of Canadians access broadcast content through the internet.

The foundation of the Canadian Radio-television and Telecommunications Commission report, which garnered applause from cultural groups that have been asking for internet regulation since the 1990s, was aptly summarized by NDP MP Pierre Nantel, who tweeted “the internet IS now the broadcast system.”

Yet Mr. Nantel and the CRTC have it backward. It may be true that the broadcasting system is (or will soon be) the internet, but the internet is not the broadcasting system. Indeed, the decision to treat the internet as indistinguishable from broadcast for regulatory purposes has sent the CRTC down a deeply troubling path that is likely to result in less competition, increased consumer costs, and dubious regulation.

The CRTC maintains that internet access is “almost wholly driven by demand for audio and video content.” However, its own data contradicts that conclusion since it also notes that 75 per cent of wireless internet traffic is not audio or video. The reality is that internet use is about far more than streaming videos or listening to music. Those are obviously popular activities, but numerous studies point to the fact that they are not nearly as popular as communicating through messaging and social networks, electronic commerce, internet banking, or searching for news, weather, and other information.

From the integral role of the internet in our education system to the reliance on the internet for health information (and increasingly tele-medicine) to the massive use of the internet for business-to-business communications, internet use is about far more than cultural consumption. Yet the CRTC envisions the internet as little more than cable television and wants to implement a taxation system akin to that used for cable and satellite providers.

There are several significant problems with viewing the internet through the prism of a broadcasting system. First, the CRTC mistakenly thinks that since (a) it regulates broadcast and (b) broadcast is now the internet, then (c) it must now regulate the internet. However, given that the internet is much more than just broadcast, the CRTC’s proposal would attempt to regulate far more than the broadcasting sector.

The CRTC recommendation covers any audio or video services that touch Canada, presumably including foreign media organizations, podcasters, and video game makers. There is no reason to conclude that the commission should be entitled to regulate these entities, but that is precisely where its logic ultimately leads. Further, faced with the prospect of Canadian regulation, some of those services could decide to geo-block Canada, concluding that a relatively small market was not worth the regulatory costs and hassles.

Second, the taxation (or mandated contributions) for cable and broadcast to support Canadian content production are at least premised on the fact that a cable subscription provides little other than access to broadcast content. The internet offers a limitless array of possibilities that have nothing to do with broadcasting, however, rendering the policy link far more tenuous. Governments can (and do) support the creation of Canadian content through grants, tax credits, and other subsidies, but foisting support on a monthly internet or wireless bill stretches the definition of the conventional broadcast system beyond recognition.

Third, precisely because the internet is such an integral part of our daily lives, ensuring universal, affordable access is a competing policy goal that should not be so easily discarded. But the CRTC provides little more than an unconvincing assurance that the impact of new internet taxes will be “cost-neutral”, even though Canadians who only rely on internet access will clearly pay more under the proposed approach. The government has handed this policy conflict to its review panel, asking it to consider new ways to support the creation of Canadian content while at the same time confirming that it opposes an “approach that increases the cost of services to Canadians.”

The CRTC report suggests that the government and its review panel think they can have it both ways with new taxes but no new costs. Yet its proposed approach is grounded in the past, with an ill-fitting solution that wrongly expands the CRTC broadcast regulatory mandate and new taxation into every corner of the internet.

The post The CRTC’s Fundamental Flaw: Broadcasting May Be the Internet, but the Internet is Not Broadcasting appeared first on Michael Geist.

Math Not Magic: If Melanie Joly Mandates Internet Taxes, Consumers Will Foot the Bill

Michael Geist Law RSS Feed - Wed, 2018/06/06 - 09:59

The government launched its telecom/broadcast review yesterday and the discussion immediately turned to Internet and Netflix taxes. Despite the wide array of issues ranging from net neutrality to the CBC before the newly established panel, for many the focus of its recommendations and the government response will ultimately come down to whether there are new Internet regulations and taxes established to support the creation of Canadian content.

Canadian Heritage Minister Melanie Joly and Innovation, Science, and Economic Development Minister Navdeep Bains both commented on the issue, suggesting divergent priorities. Bains told the Toronto Star:

For me, a critical issue is making sure that Canadians do not pay more. This is really around quality, coverage and price, and price is something that Canadians have expressed as a concern.

Joly’s emphasis was not on consumers, but rather contributions from any service connected to the Internet, telling the Wire Report:

All players in the system must contribute. So if you’re part of the system, you have to contribute, and there’s no free ride. But that can’t be at the expense of Canadians.

I have argued that there is no need for new Internet taxes to fund Cancon as there is no Canadian content emergency. The Canadian production industry has experienced record investment in recent years, demonstrating that Joly’s initial instinct to focus on export markets and the discoverability of Canadian content was the right approach. But after facing criticism over a Netflix deal that brought hundreds of millions into the industry, Joly has been consistently inconsistent on the Internet tax message, fomenting uncertainty and lingering suspicions that the end-game is now Internet taxes and regulation.

In fairness, it should be noted that Prime Minister Justin Trudeau has been steadfast in opposing new Internet taxes. For example, when the Canadian Heritage committee recommended an Internet tax seemingly out of the blue last June in its report on local media:

The Committee recommends to expand the current 5% levy for Canadian content production on broadcasting distribution undertakings to broadband distribution.

Trudeau unequivocally rejected the recommendation an hour later while the committee was still presenting its findings at a press conference:

We respect the independence of committees and Parliament and the work and the studies they do, but allow me to be clear: We’re not raising taxes on the middle class – we’re lowering them. We’re not going to be raising taxes on the middle class through an Internet broadband tax. That is not an idea we are taking on.

Months later, the official government response explained the policy rationale for rejecting Internet taxes:

The Committee’s recommendation to generate revenue by expanding broadcast distribution levies so that they apply to broadband distribution would conflict with the principle of affordable access. The open Internet has been a powerful enabler of innovation, driving economic growth, entrepreneurship, and social change in Canada and around the world. The future prosperity of Canadians depends on access to an open Internet where Canadians have the power to freely innovate, communicate, and access the content of their choice in accordance with Canadian laws. Therefore, the Government does not intend to expand the current levy on broadcast distribution undertakings.

Despite clear messaging from the Prime Minister, for the past year Joly has sent mixed messages about Internet taxes. Her launch of Creative Canada last September assured Canadians there would be no new taxes:

When it comes to content, Canadians want choice. But we know that access and affordability of Internet and wireless are real issues for many. Broadband coverage is uneven across the country. We pay some of the highest rates in the world. Our government won’t increase the cost of these services to Canadians by imposing a new tax.

A week later, Le Devoir reported that Joly was targeting Internet providers, noting Joly’s tweet to  Pierre Karl Péladeau asking why Videotron wasn’t paying cultural contributions and comments that a new system would be developed to ensure those benefiting from the Internet provide cultural funding.

 

Melanie Joly tweet, 1 October 2017, https://twitter.com/melaniejoly/status/914635791313272832

 

In February, Trudeau was asked about making “web giants pay their fair share” during Question Period in the House of Commons. His response:

We explicitly promised in the 2015 election campaign that we would not be raising taxes on Netflix. People may remember Stephen Harper’s attack ads on that. They were false. We actually moved forward in demonstrating that we were not going to raise taxes on consumers, who pay enough for their Internet at home.

Yet two days later, Joly was asked the same question, but offered a different response:

Mr. Speaker, the Prime Minister was very clear on this. We made a promise and we plan to keep it. That being said, we recognize that in the long term we need to develop a comprehensive solution for taxing digital platforms. We are not going to take a piecemeal approach.

In fact, just yesterday, Joly’s press release on the review panel included the quote “the principle guiding this review is clear: if you profit, you contribute—there is no free ride.” Hours later, a department official qualified the quote by telling Cartt.ca that “the government will reject all proposals that increase what Canadians pay.” The same tension arose during a Joly appearance at the Senate in the afternoon, where she alternately told Senators “all the players who benefit from the system, including Internet giants, must contribute. There are no free passes” and “I will also be making affordable Internet access a priority.”

When asked how to reconcile the competing goals of mandated contributions with no additional consumer costs, Joly responded to the Wire Report that “the panel will find solutions.” The panel led by Janet Yale features some of Canada’s leading experts, but they are largely lawyers, not magicians. The simple reality is that for all the talk of cost-neutral schemes, forcing Netflix to pay its share, or demanding that ISPs contribute to the system, if Joly mandates new Internet taxes, basic math suggests Internet costs will go up and Canadian consumers will ultimately foot the bill.

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Government’s Telecom/Broadcast Review Sets Up Internet Taxes and Regulation As a 2019 Election Issue

Michael Geist Law RSS Feed - Tue, 2018/06/05 - 12:39

The government unveiled the members of its telecom and broadcast review panel this morning setting the stage for Internet access taxes, Netflix regulation, and the imposition of cultural policies on telecommunications to emerge as a 2019 election issue. The new panel will be chaired by Janet Yale, who brings experience from both telecommunications and broadcasting to the role. The remaining six panel members line up nicely as telecom nominees (Hank Intven, my colleague Marina Pavlovic, and Monica Song) or broadcast nominees (Peter Grant, Monique Simard, and Pierre Trudel).

The leaked coverage this morning paints the panel as an effort to redraft broadcasting regulation with Internet companies such as Netflix and Facebook firmly in the government sights. Yet the reality is far more complex with terms of reference that touch on a wide range of telecom and broadcast issues. The Canadian Heritage perspective may be focused on broadcast and Internet regulation (despite repeated assurances that there is no support for new Internet taxes), but the ISED view will be focused on competition, consumer issues, and net neutrality. Last week’s CRTC report provides momentum for Internet taxes and regulation, however, the government has yet to provide much of a response. Indeed, the instructions to the panel reflect the departmental tensions with language that supports both sides and questions that touch on everything from consumer protection to the CBC.

Given the timelines – the panel is expected to release an interim report in a year – there will be no legislative changes during the current government. However, the timing virtually guarantees that this will be an election issue in the fall of 2019. With the CRTC report and the panel’s interim recommendations, the government will have to take a position on Internet taxation and regulation. While the digital sales tax issue is relatively easy to address, the broader recommendations of widespread Internet regulation and taxation on Internet access will require all parties to adopt a clear policy position.

My general perspective on the potential combination of the two statutues was articulated in an April 2017 op-ed in the Globe and Mail, namely that broadcasting and telecom policy serve different purposes and objectives. The key section in the op-ed:

Revisiting Canada’s twin communications laws is regarded by the cultural lobby as the opening to treat telecommunications regulation as a matter of cultural policy in what would amount to the Broadcasting Act taking over the Telecommunications Act, with the Internet treated as little more than a giant cable-television system.

Few Canadians would view their wireless or Internet connections as a matter for cultural regulation, but that is precisely what the cultural groups envision. Indeed, in light of an earlier Supreme Court of Canada decision that rejected attempts to impose cultural taxes on Internet service providers owing to the separation of the two statutes, creating a combined culture-focused Communications Act would establish a fundamental change in Canadian Internet regulation.

Yet, the reality is the policy objectives of telecommunications and broadcast do not mesh well, making it difficult to craft a single communications statute. Telecommunications regulation is fundamentally about competition and consumer protection. The rules are designed to foster affordable network access, effective consumer rights through transparency and redress and to prevent the temptation of vertically integrated telecom giants to grant their own content preferential treatment.

Those rules must be adapted for the Internet – decisions scheduled for release this week by the Canadian Radio-television and Telecommunications Commission on net neutrality that address equal access for Canadian content and applications are the Internet’s version of old battles over common carriage – but the twin policy goals of competition and consumer protection remain largely unchanged.

Broadcast policy, on the other hand, is primarily a cultural policy document designed to maximize the benefits of broadcast spectrum in a world of scarcity. In that analog world, the “broadcast system” features policies such as licensing requirements, Cancon contribution mandates, public-broadcaster support and simultaneous substitution policies as a means to encourage the creation of Canadian content and to safeguard broadcast space for domestic content.

The broadcast world of scarcity has given way to a world of abundance, however, with no channel limits nor restrictions on the ability for anyone to “broadcast” or distribute their content to a national or international audience. Instead, the key ingredients to encourage cultural choice and to provide incentives for creativity include equality of network access, marketing, distribution and ease of discovery in a world of seemingly unlimited content.

Given the seemingly endless reviews and reports, there is considerable fatigue on this issue. Yet given what is at stake, Canadians will need to pay attention and speak out in the months ahead.

The post Government’s Telecom/Broadcast Review Sets Up Internet Taxes and Regulation As a 2019 Election Issue appeared first on Michael Geist.

Why the Government’s Copyright Board Plans Threaten to Spark Another Lobbying Battle

Michael Geist Law RSS Feed - Tue, 2018/06/05 - 09:09

Copyright reform has long been viewed as one of the more contentious policy issues on the Canadian agenda, pitting creators, education groups, innovative companies, and a growing number of individuals against one another in processes that run for years and leave no one fully satisfied. Indeed, my Hill Times op-ed notes the copyright review currently underway before the Standing Committee on Industry, Science and Technology promises to run for months with MPs hearing from a broad range of stakeholders presenting perspectives that will be difficult to reconcile.

Given the somewhat messy politics, last fall the government identified a short term solution that appeared to have wide-ranging support. Innovation, Science and Economic Development Minister Navdeep Bains and Canadian Heritage Minister Mélanie Joly announced the substantive policy questions would be left to the copyright review, but that the government would move quickly to address the administration of copyright by introducing long-overdue reforms to the Copyright Board of Canada.

The strategy was a political slam-dunk since both creator and user groups have expressed frustration with the slow processes at the board, which are said to foster marketplace uncertainty and leave creators waiting years to be paid. A public consultation identified the solutions: more funding for the board, a clear articulation of the its mandate, the introduction of case management techniques commonly used in litigation, and strict time limits to stop delay tactics. My submission to the consultation can be found here.

Yet despite an easy political and policy win, the issue is now mired in internal disputes that threaten to sideline the broader copyright review process as parties gear up for a battle over board reform. The source of the dispute is not the administrative changes to the board. Rather, some are also pushing for substantive changes that would have significant implications for broader copyright policy that threaten to create massive liability risks for some copyright stakeholders. The substantive change at issue is described as “tariff harmonization”, which sounds innocuous but would result in a radical change to copyright policy and pre-empt much of the work of the Industry committee.

Canadian copyright law features two different approaches to the use of tariffs determined by the copyright board. Some tariffs, such as those for music collective SOCAN, are mandatory owing to concerns over competitive practices. This means the collective must file tariffs with the board, which determines the appropriate rate. Since the filing with the board is mandatory, the law provides for the possibility of a statutory damages multiplier, meaning that users that fail to pay the prevailing tariff may owe several times more than the actual licence fee.  This helps foster compliance, sets a cap on statutory damages, and represents a quid pro quo for the mandated filing approach.

Alternatively, for some tariffs, such as those involving Access Copyright, the use of the board is optional. This leaves it to rights holders to determine if they want to privately negotiate their rates or have the board establish a rate for the market. Since the process is optional, there are no statutory damages multipliers in effect.

Despite the obvious differences in approach, the government is considering “harmonizing” the two approaches, by granting statutory damages multipliers for both tariff systems. Not only would the approach undo the policy rationale behind multipliers for statutory damages within Canadian copyright, but it would also have a dramatic impact on substantive copyright issues such as fair dealing.

Access Copyright, which supports the measure, argues that the massive escalation in potential damage awards are needed for three reasons: deterrence, promotion of settlement negotiations, and efficient use of court resources. Yet as I argued in this post, none of the arguments ring true.

More can be found at the Hill Times op-ed. However, with a framework in place to win broad support on the administration of copyright and a process at the Industry committee to grapple with the substantive issues, the government established a viable reform process that seems suddenly set to go badly off-track. In doing so, it may turn an easy win into a political quagmire that once again leaves stakeholders largely dissatisfied.

The post Why the Government’s Copyright Board Plans Threaten to Spark Another Lobbying Battle appeared first on Michael Geist.

The 1980s CRTC: The Commission Turns Back the Clock with Old-Style Regulation and Privileged Insider Access

Michael Geist Law RSS Feed - Mon, 2018/06/04 - 10:08

The CRTC was long perceived by many Canadians as a captured regulator, largely inaccessible to the public as it dispensed decisions that safeguarded incumbents from disruptive competition. That reputation was buttressed by initial decisions on regulating Internet telephony, permitting Bell to engage in Internet throttling, and supporting a usage based billing approach that hampered competition. In recent years, some policies changed with the adoption of net neutrality regulations and the efforts of former chair Jean-Pierre Blais to prioritize consumer interests. Yet over the past few months, the CRTC under new chair Ian Scott seems determined to turn back the clock with a commission more comfortable with industry stakeholders and their priorities than consumer groups and facilitating competition.

Last week, I wrote about this trend with respect to lost transparency and privileged access for the industry. My post argued that public trust in the CRTC “is in danger of being frittered away as stakeholders fear a return of privileged access for industry that leaves the public interest stranded far from the centre of the Canadian communications system.” That post focused on the significant increase in lobbyist meetings, the presentation of the FairPlay site blocking proposal to commission staff months before it was available to the public, and meetings with the NFL while the issue of simultaneous substitution of the Super Bowl broadcast was before the commission.

The concerns about changing rules of access are matched by the equally troubling trend of CRTC decisions in which the consumer perspective is practically nowhere to be found. In just a matter of months, the CRTC has rejected policies that might foster greater wireless competition, dismissed calls for an inquiry into questionable telecom sales practices, and placed limits on cost awards for public interest organizations. The combined effect of those decisions points to a commission seeking to restore an old-style regulatory environment with less disruption both in the market and at hearings in Gatineau.

Last week’s CRTC report on “harnessing change” of programming distribution represents an even more dramatic return to the pre-digital days of old. While the report may be “digital-first”, its thinking is distinctly pre-Internet. In the commission’s view, the Internet is barely distinguishable from cable television and should be regulated and taxed as such. Despite ample evidence to the contrary – the CRTC’s own data says that 75% of wireless Internet access is not audio or video – it claims that Internet access is “almost wholly driven by demand for audio and video content.”

With that starting point, it is no surprise that it envisions regulating any audio or visual service that touches Canada and taxing all Internet services as if they were cable or satellite. In fact, the CRTC sets the stage for an unprecedented level of intervention, bringing digital news organizations, podcasters, and streaming audio services wherever located into its regulatory ambit. Moreover, it opens the door to Canadian households paying additional fees for all of their broadband and wireless subscriptions.

Rather than adopting a forward-looking approach, this proposed framework has the feel of something out of the 1980s, in which the interests of consumers are barely addressed, the production of Canadian content is assessed primarily through the prism of regulated support mechanisms, and the CRTC views its regulatory power as virtually limitless.

What might this new (or old) commission foreshadow for several outstanding policy issues?

The future of the Super Bowl simultaneous substitution decision is surely in doubt. The weak response from the major wireless companies on affordability might still be enough for a commission that is untroubled with increasing wireless costs for consumers. The FairPlay site blocking proposal, which should be dismissed on jurisdictional grounds alone, gets new life from a commission that thinks it can “harness change”. And though net neutrality is now firmly entrenched as government policy, as new issues emerge the CRTC may be less receptive to extending or fully enforcing the principle.

In short, this is the 1980s pre-Internet CRTC with a pro-consumer approach seemingly a thing of the past.

The post The 1980s CRTC: The Commission Turns Back the Clock with Old-Style Regulation and Privileged Insider Access appeared first on Michael Geist.

my brief for the Copyright Review

Fair Duty by Meera Nair - Fri, 2018/06/01 - 13:14

As submitted to the Standing Committee:

Thank you for this opportunity to contribute to the examination, and potential revision, of the Copyright Act. This subject has occupied my attention for nearly fourteen years, through life as a graduate student, teacher, researcher, administrator, and parent.

Copyright is a seemingly straight-forward provision; a measure within law that allows a copyright owner to monetize intellectual effort, by controlling (among other things) the right of reproduction. This control is not absolute; it is limited in time by expiry and in space by some rights of use (those statutory exceptions defined in the Copyright Act). Taken together, rights of control and rights of use form the system of copyright and might foster future creativity.

An impediment to fruitful operation of the system is the misunderstanding that authors lie at the heart of the system. Whereas the system was only designed to bring some stability among feuding 18th century publishers. Nevertheless, for over three centuries, control via copyright expanded in depth and breadth, always through the plea that authors were living in poverty. One may rightly ask: if authors are still in dire straits after 308 years of copyright expansion, is copyright their real problem and can it provide a meaningful solution?

The rhetoric escalates with every revision of the Copyright Act; copyright is deemed essential to the very existence of Canadian culture. But copyright is a blunt instrument; it cannot distinguish between literary superstars and novice writers, between fostering a homegrown operation and an international publishing conglomerate, and, between writing for an audience and writing for financial gain. Revision of the Act must be carefully handled, with the commercial trade imbalance kept uppermost in mind.

On the following pages are my recommendations for action the Federal Government could undertake, with (and without) change to the Copyright Act. Four themes are addressed:

  • Preserving Canadian content.
  • Deterring copyright abuse.
  • Fostering Canadian creativity, exceptions and other means.
  • The system of copyright, in support of reconciliation.

Regards,
Meera Nair, Ph.D.
Edmonton, AB

 

Regulate Everything: The CRTC Goes All-In on Internet Taxation and Regulation

Michael Geist Law RSS Feed - Thu, 2018/05/31 - 14:48

For two decades, a small collection of cultural groups have been pressing the CRTC to regulate and tax the Internet. As far back as 1998, the CRTC conducted hearings on “new media” in which groups argued that the dial-up Internet was little different than conventional broadcasting and should be regulated and taxed as such. The CRTC and successive governments consistently rejected the Internet regulation drumbeat, citing obvious differences with broadcast, competing public policy objectives such as affordable access, and the benefits of competition. That changed today as the CRTC released “Harnessing Change: The Future of Programming Distribution in Canada“, a difficult-to-read digital-only report (as if PDF is not digital) in which the CRTC jumps into the Internet regulation and taxation game with both feet.

The report is the Commission’s response to Canadian Heritage Minister Melanie Joly’s report on Canadian content in a digital world, released less than a year ago which asked for a CRTC review. That report – as well as the Commission’s own Let’s Talk TV report – emphasized the benefits of the Internet and sided primarily with an export-oriented, competition focused strategy in which Canadian content and broadcasters would succeed based on the quality of their programming, not regulatory schemes designed to provide millions of dollars in support.

The CRTC has reversed that approach with a regulation-first strategy that envisions new fees attached to virtually anything related to the Internet: Internet service providers, Internet video services, and Internet audio services (wherever located) to name a few. The CRTC’s report now goes to the government, but this has the feeling of theatre with a review of telecom and broadcast legislation set to get underway with a panel that will undoubtedly include several proponents of an Internet regulation strategy. In fact, one wonders if the CRTC would not have embraced prioritization of Cancon on in the Internet if not for the government’s clear support for net neutrality.

The foundation of the CRTC report is fundamentally flawed in at least four respects. First, Canadian broadcasting regulation is essentially regulation on speech. In a world of scarcity – limited channels or spectrum – that regulation is viewed as necessary to ensure that a scarce resource is well-used. In the Internet world of abundance, the rationale for conventional broadcast regulation withers away as there are few limits to the ability for anyone to use the Internet to express themselves, whether with text, audio or video.

Yet in the CRTC’s worldview, much of this is “broadcasting” that requires regulation. The potential scope of CRTC regulation is dizzying as it states:

if legislative change is to take place, it should clearly and explicitly make any video or audio services offered in Canada and/or drawing revenue from Canadians subject to the legislation and incorporate them into the broadcasting system. This should apply to traditional and new services, whether Canadian or non-Canadian.

Is the CRTC suggesting that all podcasters that draw revenue from Canada are now subject to its regulation?  All news organizations that invariably include audio and video?  Where is the line on CRTC regulation when your scope is the Internet?

Second, there is no Canadian content emergency. Notwithstanding the doomsayers who fear that the emergence of digital services such as Netflix will result in less money for production in Canada, the most recent annual report by the Canadian Media Producers Association on the state of screen-based media production in Canada confirms that financing of Canadian television production continues to hit new heights. Last year, the total value of the sector exceeded $8 billion, over than a billion more than has been recorded over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production. Canadian television, which some claim is at risk due to services such as Netflix, posted the largest expenditure ever (or least over the past two decades looking back at older annual reports).

In fact, the increase in foreign investment in production in Canada is staggering. When Netflix began investing in original content in 2013, the total foreign investment (including foreign location and service production, Canadian theatrical, and Canadian television) was $2.2 billion. That number has doubled in the last five years, now standing at nearly $4.7 billion. While much of that stems from foreign location and service production that supports thousands of jobs, foreign investment in Canadian television production has also almost doubled in the last five years. The data makes it clear that Netflix isn’t a threat, it’s an opportunity with new money entering the sector.

The CRTC report isn’t based on this reality, however. Instead, it provides a handy interactive slider that shows the reduction in mandated funding for Cancon depending on how much spending drops on cable and satellite services. Its own chart shows how that aspect of funding is a small part of the overall ecosystem, but nevertheless it calls for taxation of the entire ecosystem.

Third, an Internet tax is largely premised on the argument that ISPs and Internet companies owe their revenues to the cultural content accessed by subscribers and they should therefore be required to contribute to the system much like broadcasters and broadcast distributors. In fact, the CRTC says exactly that in the report:

there are numerous services in Canada that connect Canadians to content, whether through the Internet or broadcast networks, such as cable or satellite. Demand for these services is almost wholly driven by demand for audio and video content, yet the Canadian market for this content is only supported by BDUs, television programming and radio services.

The reality, however, is that Internet use is about far more than streaming videos or listening to music. Those are obviously popular activities, but numerous studies (CIRA, Statistics Canada) point to the fact that they are not nearly as popular as communicating through messaging and social networks, electronic commerce, Internet banking, or searching for news, weather, and other information. From the integral role of the Internet in our education system to the reliance on the Internet for health information (and increasingly tele-medicine) to the massive use of the Internet for business-to-business communications, Internet use is about far more than cultural consumption. Yet the CRTC envisions the Internet as little more than cable television and wants to implement a taxation system akin to that used for cable and satellite providers.

Fourth, the CRTC suggests that the new fees will be consumer-cost neutral, with reduced broadcast fees offsetting new Internet access fees. In other words, it believes that the current consumer costs are a benchmark against which future fees can be measures and that consumers don’t get to retain the benefits of lower costs and more choice from the Internet. Rather, the CRTC views this as an opportunity to impose new fees or taxes.

There is little reason to believe that the costs won’t have an impact on Internet and wireless pricing that is already some of the highest in the world. Indeed, there is no way around the fact that an Internet tax would make access less affordable, expanding the digital divide by placing Internet connectivity beyond the financial reach of more low-income Canadians. The tax would be particularly damaging in indigenous communities.

The government itself rejected this proposal just last year on precisely the same affordability grounds:

The Committee’s recommendation to generate revenue by expanding broadcast distribution levies so that they apply to broadband distribution would conflict with the principle of affordable access. The open Internet has been a powerful enabler of innovation, driving economic growth, entrepreneurship, and social change in Canada and around the world. The future prosperity of Canadians depends on access to an open Internet where Canadians have the power to freely innovative, communicate, and access the content of their choice in accordance with Canadian laws. Therefore, the Government does not intend to expand the current levy on broadcast distribution undertakings.

The CRTC believes that there is no difference in taxing the same connection, whether used for cable broadcasts or to access the Internet. However, the two can be very different. Cable contributions can be rationalized because the only thing you can do with cable is watch programming. Not so with the Internet, yet the CRTC wants to impose taxes on both in much the same manner.

The CRTC report seemingly views the Internet as an ATM with the ability to withdraw cash from providers and services to fund Cancon or other social programs. It acts as if a reduction in mandated support from broadcasters is the end of Cancon and as if the Internet is little more than cable television rather than the most important communication system ever created. As the title of the report suggests, its recommendation to the government is that the Internet can be “harnessed” from Gatineau for its own policy purposes. The CRTC wants to convince the public it understands the digital world with its digital-first report, but as Canadians struggle to parse through the myriad of links and an unreadable presentation they find a Commission with its gaze firmly fixed in the rear view mirror.

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Separating Fact From Fiction: The Reality of Canadian Copyright, Fair Dealing, and Education

Michael Geist Law RSS Feed - Thu, 2018/05/31 - 09:10

This week, I had the honour of speaking at a packed event at the World Intellectual Property Organization titled How WIPO Can Contribute to Achieving the Right to Education. The panel featured speakers from around the world focusing on the copyright-related education issues. My talk, which used emerging data from the copyright review, focused on the reality of Canadian copyright, fair dealing, and education. A recording of my remarks embedded into my slide presentation is posted below in a YouTube video.

The presentation drew on my recent blog series on the issue (1, 2, 3, 4), noting that three things have taken place in Canada since the 2012 copyright reforms and the Supreme Court of Canada’s copyright pentalogy that affirmed the need for a broad and liberal approach to fair dealing.

First, education spending on copyright materials has increased over the past five years, citing evidence from Dalhousie University, Ryerson University, and Statistics Canada.

 

Dalhousie Library Expenditures, https://www.dal.ca/dept/financial-services/reports/budget-advisory-committee–bac–reports.html

Ryerson Library Acquisitions, https://library.ryerson.ca/info/collections/budget/

Ryerson Library Expenditures, Detailed, https://library.ryerson.ca/info/collections/budget/

Statistics Canada Library Acquisitions, http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3121

 

I also noted that there is far more transparency with respect to copyright spending with open data from CRKN and universities such as the University of Alberta.

CARL CRKN Licensing Costs, https://f7f51e08-941e-11e7-aad1-22000a92523b.e.globus.org/1/published/publication_33/submitted_data/SUMMARY_TABLE_CARL_CRKN_2016-17_LICENSING_COSTS.pdf

 

Second, Canadian publisher profit margins have increased over the past five years, citing Statistics Canada data on both profit margins and increased revenues for Canadian publishers from the educational market.

 

 

Third, I emphasized that licensing remains the foundation of access in Canadian education. While fair dealing is essential, it remains a relatively small part of access strategies, with the vast majority of access coming from licensing and open access. I cited specific data from the University of Guelph, which examined its course e-reserves and found that 54% comes through direct links from licenced materials, 24% open and free Internet content, 6% via transactional licences, and the remaining 16% under fair dealing.

 

 

The University of Calgary examined thousands of course materials and found that only 8% relied on fair dealing.

 

 

I earlier posted on the University of Ottawa’s investment in e-books, with 1.4 million licensed e-books with a great emphasis on Canadian e-books.

 

 

The full presentation can viewed here.

The post Separating Fact From Fiction: The Reality of Canadian Copyright, Fair Dealing, and Education appeared first on Michael Geist.

Who Needs an iPhone Tax: Canadian Music Industry Instead Calls for $40 Million Annual Handout

Michael Geist Law RSS Feed - Wed, 2018/05/30 - 11:22

As the Standing Committee on Industry, Science and Technology continues its copyright review, the Canadian Heritage committee has launched its study on remuneration models for artists and creative industries. Yesterday, Music Canada’s Graham Henderson appeared before the committee to make his case for copyright reform (the organization will presumably make the same case in the coming weeks at the Industry committee). The industry is garnering record-setting Internet revenues, but it reverted to claims of a “value gap” that doesn’t fit within the Canadian legislative experience and demands for a copyright term extension that would cost Canadians millions of dollars and that was rejected by the government in the TPP.

Most notably, after privately lobbying for a new tax on all smartphones and other devices, the group is shifting toward an even bigger cash haul. Rather than apply a tax on all smartphones, the industry is spinning for a tax on everyone by simply calling for an annual $40 million handout:

The private copying levy, originally intended to be technologically neutral, has been limited by various decisions to media that are effectively obsolete.  This important source of earned income for over 100,000 music creators is now in jeopardy unless the regime is updated. Music creators are asking for the creation of an interim four-year fund of $40 million per year. This will ensure that music creators continue to receive fair compensation for private copies made until a more permanent, long-term solution can be enacted.

This represents a brazen request for an annual $40 million handout for no reason other than the industry wants it. Indeed, as the industry predicted, the consumer shift to subscription services such as Spotify means there is a less and less private copying taking place. Music Canada (formerly the Canadian Recording Industry Association) was once the lead proponent of the private copying levy, but it dropped its support on the expansion of the levy to iPods in 2007, fearing it “broadens the scope of the private copying exception to avoid making illegal file sharers liable for infringement.” The industry was similarly reluctant to embrace private copying in 2010.

The demand for an annual $40 million taxpayer handout makes sense from the industry’s perspective when you review how the CPCC, the collective responsible for administering the system, distributes its revenues. First, last year a hefty 28% of its revenues went toward administration, meaning that more than $11 million would go toward administrative costs, not musicians. Second, the CPCC’s distribution framework allocates 18% of the remaining revenues to record companies, not authors, publishers or performers. That means millions to record labels, not musicians. In fact, the percentage allocated to record companies has grown significantly: it was 11.3% in 2000, 15.1% from 2001-2007, and now 18%. One hopes the committee will recognize the annual $40 million handout request – $160 million over four years – has nothing to do with business models or the state of industry, which has been growing dramatically in recent years.

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A Matter of Trust: What Is Happening at the CRTC?

Michael Geist Law RSS Feed - Mon, 2018/05/28 - 09:10

As the term of former CRTC Chair Jean-Pierre Blais came to an end, I wrote a post arguing that he left behind an enviable record, commenting that “a new commissioner may bring a different perspective, but there is no reversing a more open, accessible CRTC.” Less than a year later, it is becoming increasingly clear that I was wrong. Apparently, reversing an open, more accessible CRTC was entirely possible.

Blais understood at least two things with respect to Canada’s communications laws and the CRTC. The first was that in the digital environment the commission should eschew protectionism in favour of a regulatory approach premised on competition. The second was that the CRTC would never gain the trust of the public unless it was seen to operate in the public interest in a transparent manner that offered everyone an equal opportunity to shape Canadian policy.

New CRTC chair Ian Scott has only been in the position since last September, but it feels as if both principles are under threat. The recent CRTC wireless decision rejected the government’s strong hints for more competition, effectively telling Innovation, Science and Economic Development Minister Navdeep Bains that major reforms were the government’s responsibility. This week the CRTC will release its decision on broadcasting and Canadian programming titled “Harnessing Change: The Future of Programming Distribution in Canada”, which suggests the regulator thinks it can harness the Internet and a global programming market.

Yet it is not differing policies that strike at the core of public trust of the CRTC. It is not the odd – if inappropriate – tweet last week in which the CRTC promoted Bell’s CraveTV service (the tweet was subsequently deleted), the discouraging reluctance of the CRTC to launch an inquiry into questionable telecom sales practices, or the approach to cost awards that seem to place new limitations on support for public interest organizations.

Rather, it is the shift in CRTC approach that has opened the door to a resumption of privileged access lacking in the transparency needed to assure the public that the commission still places Canadians at the centre of their communications system. The most obvious manifestation is the presentation of the FairPlay site blocking proposal to commission staff (aided by a commissioner) months before it was available to the public. The documents obtained by the Forum for Research and Policy in Communications show the country’s largest telecom company enjoys easy access to commissioners, who then promote the company’s agenda internally within the regulator.

Not only was the advance internal promotion of the proposal troubling, but so too was the response from both Bell and the CRTC. Bell tried to wordsmith away its privileged access, saying it had not met with CRTC commissioners. Meanwhile, the CRTC may have violated its own Code of Conduct, which states:

Because of the confidentiality of CRTC decision-making and the importance of not only being, but also being seen, to be fair and impartial at meetings with parties before the CRTC, we may not discuss matters before the Commission. To make it clear to all participants that such matters are not to be discussed, we prepare an agenda for meetings with parties and intervene during the meeting if the conversation appears to be moving to a topic before the Commission. Information from such meetings that may be relevant to any future proceeding must be filed on the record of that proceeding in order to be considered by the Commission. Otherwise, other parties to the proceeding would not be aware of or have the opportunity to comment on the information.

To my knowledge, the information from that meeting was not placed on the public record.

Moreover, the newly established (or revived) open door policy was not limited to FairPlay. According to the lobbyist registry, Bell did not meet with CRTC commissioners and senior executives from January 1, 2016 to August 31, 2017. Since September 1st, Bell has had five registered meetings, easily the most of any company in Canada. A new chair unsurprisingly sparks many “get to know you” meetings (I had one with Scott in the fall), but during that period Bell had as many registered meetings as Telus, Rogers, and Shaw combined.

In fact, since July 1, 2017, the organization with second most meetings is the National Football League, which has been active together with Bell on the issue of simultaneous substitution of the Super Bowl. On August 1, 2017, Bell asked the CRTC to reconsider its earlier decision and rescind the order removing simsub from the broadcast. While Bell is the applicant in that case, it is inextricably linked to the NFL, which owns the global rights to the broadcast and has much at stake over the outcome of the decision. But after Bell filed the reconsideration request, it granted the NFL two meetings, with Scott in December 2017 and with Scott Hutton, the CRTC’s Executive Director, Broadcasting in January 2018. It is not clear how the CRTC justifies meetings with the NFL while the matter of the Super Bowl broadcast is before the commission.

Meetings between the regulator and stakeholders outside of the formal hearing process are seemingly an inevitability. Yet the regulator must ensure both equal access and full transparency of access. In fact, the Federal Court of Appeal emphasized the importance of transparency when it upheld the simsub decision, stating “as long as the CRTC’s decision demonstrates ‘justification, transparency and intelligibility within the decision making process’ and ‘falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law’, the Court will treat it with deference.”

It is not enough to simply rely on the public to file access to information requests or for companies to register their meetings on the lobbyist registry. Consistent with its code of conduct, all information from those meetings should be filed on the public record. Moreover, the commission should proactively disclose the agenda and non-confidential documents of commissioner meetings as well as registrable meetings with senior commission executives. The foundation of public support for the CRTC is grounded in trust. In light of recent events and records, that trust is in danger of being frittered away as stakeholders fear a return of privileged access for industry that leaves the public interest stranded far from the centre of the Canadian communications system.

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Canadian Copyright, Fair Dealing and Education, Part Four: Fixing Fair Dealing for the Digital Age

Michael Geist Law RSS Feed - Fri, 2018/05/25 - 10:03

My series on Canadian copyright, fair dealing, and education has explored spending and revenue data at universities and publishers, explained the diminishing value of the Access Copyright licence, and conducted a detailed analysis of site licensing on Canadian campuses which demonstrates the foundation for accessing works are the site licences that offer greater flexibility and value than the Access Copyright licence. The series has also shown how some of the publishers who have been most critical of fair dealing are also the ones that have benefited the most from licensing their e-books to educational institutions.

As the Standing Committee on Industry, Science and Technology considers recommendations on fair dealing, the record is clear: Access Copyright distributions have declined, but the collective is hardly the only game in town. With increased copyright spending, new sources of revenue for publishers and authors, and greater flexibility for education, proposals to limit fair dealing for education are unnecessary and would be harmful to students and teachers. What the review has illustrated is that the problem lies not with fair dealing for education, but rather with the challenges of fully adapting fair dealing and educational access to the digital world. Those challenges point to four main areas for reform or policy initiatives.

First, there is a need to fix fair dealing by ensuring that it is not hamstrung in the digital environment. The Canadian test for fairness is consistent with those found in other countries, but there are barriers that exist for fair dealing in the digital world that are not found in the analog one. The most obvious example are Canada’s digital lock rules, which exceed the requirements at international law in the WIPO Internet treaties. As many warned five years ago, Canada has created a system that allows for unnecessarily restrictive limits on digital fair dealing. There is a need to fix this problem by establishing an exception within the anti-circumvention rules to allow for circumvention for any lawful purpose.

Moreover, the fair dealing purposes should be expanded, ideally by adopting a “such as” approach to its list of enumerated purposes that would ensure the law remains relevant in the face of new innovation. Alternatively, given Canada’s prioritization of artificial intelligence, there is a need for a fair dealing exception for text and data mining similar to that found in many other countries.

There is also a need to ensure that contracts cannot be used to override fair dealing rights. This is particularly important given the millions of dollars being spent by Canadians for site licensing with giant foreign multinational publishers. Those negotiations are difficult and a robust fair dealing provision not easily sidelined by contract would help Canadian educational institutions negotiate a fair deal with global giants.

Second, there is a need for greater transparency within the copyright system. MPs have regularly asked for data from stakeholders on all sides that is typically not available. Educational institutions have begun to implement open data initiatives – the University of Alberta is an excellent example – so that everyone can see precisely how much is being spent on subscriptions and copyrights. The copyright collectives and publishers are far less transparent, with limited information on distributions from collectives and publishers loath to disclose alternate copyright royalties from site licensing. Mandating greater transparency would improve policy making and ensure that both creators and users have better insights into where the money is going.

Third, the government should increase its emphasis on open access and open educational resources.  In the case of open access, the public has already paid for the creation of research at least once (sometimes twice) and should not pay a third time. Ensuring open access for research publications reduces costs, gives taxpayers a better return on their investment, and clearly addresses any concerns about copyright payments for use. Open educational resources, which has been embraced by provincial governments, offers greater flexibility for education and an alternate model for payments for creators. Rather than relying on royalties based on the number of books or licenses sold, funded OERs fully compensate creators at the time of creation. The Ontario and B.C. investments in OERs should be adopted federally and in other provinces, consistent with recommendations from the Finance committee last year.

Fourth, the government should ensure that current programs that support publishers and authors function equally well in the digital environment, which correspondents note, would be consistent with the updating of the public lending right to e-books that recently occurred. The Canada Council conducted a study on the issue in 2011. The government should also consider programs to support digitization of books so that publishers can offer digital versions of their full backlists. The data indicates that educational institutions subscribe to the majority of books offered in electronic form by Canadian publishers. The government could support expanding the availability of e-books and should consider linking current publishing assistance to the inclusion of an e-book option.

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Canadian Copyright, Fair Dealing and Education, Part Three: Exploring the Impact of Site Licensing at Canadian Universities

Michael Geist Law RSS Feed - Thu, 2018/05/24 - 09:10

My series on Canadian copyright, fair dealing, and education has thus far explored spending and revenue data at universities and publishers as well as explained why the Access Copyright licence is diminishing in value. This post provides original data on the impact of site licensing at universities across Canada. It is these licences, together with open access and freely available online materials, that have largely replaced the Access Copyright licence, with fair dealing playing a secondary role. Site licensing now comprises the lion share of acquisition budgets at Canadian libraries, who have widely adopted digital-first policies. The specific terms of the licences vary, but most grant rights for use in course management systems or e-reserves, which effectively replaces photocopies with paid digital access. Moreover, many licences are purchased in perpetuity, meaning that the rights to the works have been fully compensated for an unlimited period. The vast majority of these licenses have been purchased since 2012, yet another confirmation that fair dealing has not resulted in less spending on copyright works.

Unlike Access Copyright, which provides minimal detail beyond aggregate numbers on distributions, some universities have provided full open data sets on budgets, acquisitions, and line-by-line costs of subscriptions. For example, recent data released by the Canadian Research Knowledge Network provided details on the subscription expenditures at 28 member libraries from the Canadian Association of Research Libraries. The spending on journals and e-books, even with the benefit of consortium-based negotiations, is enormous. The summary table for 2016-17 licensing costs shows expenditures from those 28 university library alone exceeding $80 million for the year for access to journals, some e-books and other databases.

 

CARL CRKN Licensing Costs, https://f7f51e08-941e-11e7-aad1-22000a92523b.e.globus.org/1/published/publication_33/submitted_data/SUMMARY_TABLE_CARL_CRKN_2016-17_LICENSING_COSTS.pdf

 

Other open data sources provide further insights into spending and the breadth of alternative licensing for materials. For example, the University of Alberta’s open data project provides remarkable detail on all subscriptions and purchases by the university library. The data sets show year-by-year, work-by-work pricing, demonstrating that even a single university can spend hundreds of thousands of dollars annually to acquire access to works, many in perpetuity (thanks to University of Alberta’s Trish Chatterley for the assistance).

Those acquisitions extend far beyond journals. For example, last year the university purchased perpetual access to NewspaperARCHIVE Academic Library Edition Canada as part of a $381,617.03 purchase with Proquest that included access a range of materials such as the Washington Post and Los Angeles Times. The Canadian newspaper archive provides perpetual access to over one hundred Canadian newspaper datasets. I am advised that the licence permits copying reasonable portions for educational or research purposes, printing or inter-library loans of materials, and links to articles within electronic reserves or course management systems. The perpetual access includes access to newspapers such as the Winnipeg Free Press, Lethbridge Herald, and Medicine Hat News.

The inclusion of the Winnipeg Free Press is worth highlighting since its publisher, Bob Cox, has been outspoken on the need for copyright reform, yet neglects to mention that he has sold perpetual access to 141 years of the paper’s archives. In other words, licence holders such as the University of Alberta have fully compensated the Winnipeg Free Press for the potential copying of thousands of articles without implicating Access Copyright or fair dealing.

The investment in e-books is the most important trend as it represents a critical alternative to the Access Copyright licence. The committee has already heard from libraries confirming that they have shifted to digital-first purchasing policies, where the digital version of a work is preferred given the greater flexibility the licences typically offer for access and teaching. While some have claimed that the site licensing is largely limited to journals, the reality is that the e-books is a rapidly growing part of university purchasing. At the University of Ottawa, there are now nearly 1.4 million e-books under licence. The University of Alberta dataset shows massive investments in e-books from publishers around the world. For example, last year, it spent over $500,000 for the Springer e-book archive, which provides perpetual access to 110,000 books with the ability to use full chapters for course materials.

With regard to the Canadian component of e-book licensing, the data discussed below suggests that the expenditures and range of Canadian materials is significant (beyond newspapers and Canadian journals). For example, one of the largest Canadian e-book databases comes from the Canadian Electronic Library with a database known as DesLibris. It features thousands of Canadian e-books from Canadian publishers. Last year, the University of Alberta alone spent $24,000 on a licence to access to the database. Assuming that most other universities have done the same, the revenue for a single Canadian e-book database may approach a million dollars annually.

While it is challenging to identify precisely what is covered under the licence at each institution, the University of Ottawa also has a licence to the database. Working with University of Ottawa student Tamara Mascisch-Cohen, we tried to identify the scope of the university’s e-book licences for Canadian publishers within DesLibris (which is just one of several Canadian e-book databases licensed at the university). The University of Ottawa is particularly interesting in this regard since it licences both English and French books from dozens of Canadian publishers (thanks to librarians Tony Horava and Sarah Hill for the assistance).

We looked specifically for four metrics by publisher: number of licensed e-books, number of licensed e-books published since 1997, total number of e-books available, and total number of e-books published since 1997 available. The metrics were designed to provide a sense of licensed e-books from a single database along with a better understanding of how many e-books fell within the last 20 years (Access Copyright says books older than 20 years are rarely copied and are ineligible for its Payback system) and whether the university was purchasing access to the majority of e-books available for subscription. Data on the top 60 Canadian presses is posted below:

University of Ottawa DesLibris data

The data shows a huge investment in Canadian e-books with universities licensing access to thousands of them across dozens of Canadian publishers. In fact, the University of Ottawa approach suggests that universities will typically licence the majority of e-books that are made available by Canadian publishers. In other words, the only thing stopping more e-book licensing are publishers who fail to include them within their databases. Further, there are a sizable number of e-books that are licensed that were published before 1997. These e-books are typically not copied (according to data from Access Copyright) and would not return royalties from the Payback system for the authors or publishers, meaning that site licensing is a crucial way to obtain an ongoing economic return from these older titles.

Moreover, this is only one database. The University of Ottawa library advises that it has purchased perpetual access to more than 15,000 books from Canadian publishers. There are thousands of books from the largest publishers such as University of Toronto Press, McGill-Queen’s University Press, and UBC Press, but dozens of smaller presses have also sold perpetual access.

Interestingly, some of the publishers who have been most critical of fair dealing are also the ones that have benefited the most from licensing their e-books to educational institutions. For example, last December, Dundurn Press tweeted:

Dundurn Press tweet, December 1, 2017, https://twitter.com/dundurnpress/status/936626376651755521

What Dundurn Press doesn’t say is that it is compensated for educational use of many of its books.  The University of Ottawa has licensed access to over 98% of the Dundurn Press e-books that are available through DesLibris: 1,933 Dundurn Press e-books of a total of 1,965 available e-books through the database. Dundurn has also sold 459 e-books under perpetual licences to the university.

There is similar data for other Canadian publishers. ECW Press, whose site says it has published “close to 1,000 books”, told the industry committee last week that it has lost significant educational adoption revenues. The University of Ottawa has licensed over 99% of the available ECW e-books from DesLibris: 685 out of a total 690. ECW has also sold 339 e-books – about a third of its entire catalogue – under perpetual licences to the university.

Fernwood Publishing, a Canadian publisher that started in Halifax and expanded to Winnipeg, was also discussed during last week’s hearing. It says it has published over 450 titles over the past 20 years. Last week, the committee heard that the educational component of its publishing program has decreased from 70% of sales to about half. The University of Ottawa has licensed 86% of the available Fernwood e-book on DesLibris: 254 out of a total of 295. Fernwood has also sold 186 e-books under perpetual licences to the university. The data is replicated at many Canadian publishers, who criticize fair dealing yet remain silent on the new revenues from site licensing their e-books and on the fact that those licences typically mean that potential copying of their works is paid copying, not copying based on fair dealing.

The story is similar for many Canadian authors, who have had their works licensed under these site licenses. For example, Heather Menzies is an exceptionally accomplished Canadian author who received the Order of Canada in 2013. She is the author of ten books, the former chair of the Writers Union of Canada, and has written publicly about the state of Canadian copyright. Six of her books were published before 1997 and are therefore ineligible for Access Copyright’s Payback system since its data shows titles older than 20 years are unlikely to be copied. Of the remaining four titles, at the University of Ottawa electronic versions of Canada in the Global Village have been licensed through three different databases, No Time is licensed as an e-book, and Reclaiming the Commons has been licensed as an e-book. The library does not have a copy, either paper or electronic, of Enter Mourning.

Ms. Menzies is just one author, but the shift to e-licensing of her works is typically of the trend at universities across the country.  Fair dealing is an essential component of copyright law, but it is not the foundation for accessing works in Canadian educational institutions. More relevant is the hundreds of millions of dollars spent on licences that offer greater flexibility and value than the Access Copyright licence. As MPs search for answers, the data makes it clear that fair dealing for education is not problem in need of solving. If anything, there is a need to address ongoing restrictions and barriers in the digital world, a topic that will form the basis for tomorrow’s final post in this series.

The post Canadian Copyright, Fair Dealing and Education, Part Three: Exploring the Impact of Site Licensing at Canadian Universities appeared first on Michael Geist.

Canadian Copyright, Fair Dealing and Education, Part Two: The Declining Value of the Access Copyright Licence

Michael Geist Law RSS Feed - Wed, 2018/05/23 - 10:26

The Standing Committee on Industry, Science and Technology copyright review has focused exclusively on fair dealing and education to date, hearing from a broad spectrum of witnesses that education spending on licences has increased since 2012, that publisher profit margins have gone up during the same time period, and that distributions from the Access Copyright licence have declined. As discussed in yesterday’s post, the data points to the changing realities of access to materials with site licensing now constituting the majority of electronic reserves followed by open access or freely available online materials. Schools are also collectively spending millions of dollars on transactional licensing that grants access to specific works as needed. The role of fair dealing is relatively modest, reflecting a small part of overall access to materials.

The availability of alternative licences that offer better value than the Access Copyright licence lies at the heart of the decline in Access Copyright distributions. This was illustrated during an exchange at the Winnipeg hearing with Mary-Jo Romaniuk, the University Librarian at the University of Manitoba:

Mr. Dane Lloyd: You made an interesting comment, Ms. Andrew, about one of the reasons you are no longer with Access Copyright, as in the company, as Mr. Sheehan said, was because there was a lot of duplication and you were already paying for the rights of many things that access copyright was providing. Can you explain how that happens? How is there duplication? It seems to me that somebody pays for the right to sell a published work. How is somebody else also available to pay that? It seems like there is only one owner, or one licence holder, so how can you be accessing copyright protected materials by paying one person but not actually paying somebody who also holds the licence for that?

Ms. Mary-Jo Romaniuk: We’ll see how we answer this. I hope this answers your question. When we license material in the library, which is what she’s referring to, we pay a licence fee to the publisher, who again, we assume, divvies it out appropriately, so that is how we licence material. Once it’s licensed we have the right to use, and individuals use it. If we license five simultaneous users, five people can use it at the same time. If we license one, they take their turns. The fee for use is already paid in that fee. When we were paying access copyright, of course you pay by head count, so in essence we’ve already paid the fee for most of that licensed material and, as you can see, the amount of both our dollar value and kinds of licences have expanded greatly so the duplication would only be worse.

Mr. Dane Lloyd: Would you say that you’re paying for copyright? You’re just bypassing access copyright and paying the publishers directly?

Ms. Mary-Jo Romaniuk: That’s the model that’s there. Access Copyright is one mechanism. The other mechanism, of course, is for us to purchase material or licensed material from publishers, which we have always done.

Mr. Dane Lloyd: These publishers are publishing works that Access Copyright was also selling to you?

Ms. Mary-Jo Romaniuk: There can be multiple ways you can acquire a work or rights to use a work. Access Copyright is one.

Ms. Althea Wheeler: If I can add, I think part of the difference is if we’re looking at something that is born digital versus the print version, and we are increasingly purchasing those born digital versions of things. That’s I think where the difference comes between who is getting paid.

As Ms. Romaniuk rightly states, “there can be multiple ways you can acquire a work or rights to use a work. Access Copyright is one.” In fact, as noted yesterday, university data confirms that alternative licences are being used as the primary source for course e-reserves. For example, the University of Guelph told the committee:

Currently, 92% of the materials we acquire are digital, and the rights we negotiate provide for greater legal opportunities for the use of those materials. Students at the university access course readings in a variety of ways: they purchase textbooks from the university bookstore; they access materials placed on reserve in the learning management system, including 54% through direct links from licenced materials, 24% open and free Internet content, 6% via transactional licences, with the remaining 16% under fair dealing.

Not only are Access Copyright distributions declining, but the value of its licence is as well. This is due to at least two trends: (1) the availability of better value alternatives that cover the same material and (2) the declining size of the repertoire of materials that are likely to be copied. Note that these two trends are independent of the legal issue at the heart of the current committee discussion, namely whether fair dealing overlaps with the Access Copyright coverage for any remaining materials.

All sides agree that the Access Copyright licence would only apply in instances where education does not otherwise have the right to make a copy of the work. Even setting fair dealing to the side (it only represents roughly 16% of e-reserves content), education has acquired the right to use materials in the overwhelming majority of circumstances.  The most important source is site licensing, which will be fully explored in tomorrow’s post. However, with more than half of all materials in e-reserves covered by alternative site licences that generate millions on revenues for aggregators, publishers and authors, any application of the Access Copyright licence in such circumstances would mean double payment for the same materials.

In addition to site licensing, the 24% of e-reserve materials that are open and free Internet content points to the continuing diminishing value of the Access Copyright licence in the years ahead. The role of open access licensing is particularly important, since the public has effectively already paid for many of the publications by funding research and researchers. Further, the continued growth of open access reflects a desire of the authors/researchers to ensure their work is widely disseminated. In many disciplines – the sciences, health, engineering, and law to name several – open access is increasingly the standard, meaning that Access Copyright’s demands for licence payments would require hundreds of thousands of students to pay for copying that does not exist.

Yet the declining value of the Access Copyright licence is not solely a function of the availability of better value (or free) alternatives. Given copying trends identified by Access Copyright itself, its licence will continue to decline in value with each succeeding year. Access Copyright’s Payback system, which provides royalties to all writer affiliates, excludes all digital works. In terms of eligibility, its rules exclude “blogs, websites, e‐books, online articles and other similar publications. Only print editions can be claimed.”

 

Access Copyright Payback FAQ – Digital, http://www.accesscopyright.ca/media/115133/english_payback_faqs.pdf

 

Given the growth of digital content, the Payback system will steadily become less reflective of the full scope of publishing and user access to materials. Moreover, the Payback system also excludes all works that are more than 20 years old on the grounds that they are rarely copied. According to the Access Copyright FAQ:

 

Access Copyright Payback FAQ – 20 years, http://www.accesscopyright.ca/media/115133/english_payback_faqs.pdf

 

Limiting the Access Copyright Payback system to print publications from the past 20 years means that the amount of materials being copied would be shrinking even if education wasn’t already licensing 60% of e-reserves. As more and more print content is licensed under open access or born digital, the size of the repertoire is surely getting smaller. These works falls outside of the system and are not compensated under Payback.

Moreover, the works of publishers and many creators also fall outside of the Payback system as Access Copyright’s own analysis finds that their works are unlikely to be copied. For well-established publishers with large back catalogues, this suggests their pre-1997 works are rarely copied. In order to fully monetize those older works in the digital environment, the publishers must primarily rely on site licences – the same site licenses Access Copyright downplays – to generate incremental revenues from educational institutions.

The same is true for authors. For example, Sylvia McNicoll, who appeared earlier before the committee, has been an accomplished author for decades, meaning that many of her books are now ineligible for Payback payments given that they are unlikely to be copied. The same is true for Margaret Atwood, one of Canada’s best known authors, who published the majority of her books, short fiction, and poetry before 1997. Indeed, alternative licensing is the real story of access within education today as the Access Copyright licence steadily diminishes in value in the digital environment. The full impact of site licensing will be explored in tomorrow’s post.

The post Canadian Copyright, Fair Dealing and Education, Part Two: The Declining Value of the Access Copyright Licence appeared first on Michael Geist.

Canadian Copyright, Fair Dealing and Education, Part One: Making Sense of the Spending

Michael Geist Law RSS Feed - Tue, 2018/05/22 - 10:05

The review of Canadian copyright law continues this week with the Standing Committee on Industry, Science and Technology set to hear from Canadian ministers of education and the two leading copyright collectives, Access Copyright and Copibec. The committee review has now heard from dozens of witnesses, including a week-long cross-country tour. With the initial focus on copyright, education, and fair dealing, the MPs are grappling with three key trends since 2012: educational spending on licensing has increased, publisher profit margins has increased with increased sales of Canadian educational texts, and distributions from the Access Copyright licence have declined. This post, the first of four this week on copyright, fair dealing, and education, takes a closer look at the three trends and how they can be reconciled.

1.    What Has Happened Since 2012?

i.    Educational Spending on Licensing

Contrary to the doom and gloom, data from several universities and Statistics Canada confirm that educational spending on licensing has increased since the last copyright reforms in 2012. For example, the spending at Dalhousie University since 2012 looks like this:

Dalhousie Library Expenditures, https://www.dal.ca/dept/financial-services/reports/budget-advisory-committee–bac–reports.html

 

The spending at Ryerson shows a similar trend, with major investments in site licenses and e-books:

 

Ryerson Library Expenditures, Detailed, https://library.ryerson.ca/info/collections/budget/

 

In fact, Statistics Canada, which surveys the Canadian Association of University Business Officers on university spending, shows the increased spending on content since the fair dealing decisions and reform is national in scope.

 

Statistics Canada Library Acquisitions, http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=3121

 

An upcoming post will more closely examine the hundreds of millions spent on licensing every year by the educational sector and what it means for accessing materials in schools.

ii.    Canadian Publisher Revenues

The Canadian publisher data from Statistics Canada that shows the Canadian publishing market largely unaffected by fair dealing given the other changes taking place in the market. The data released in late March of this year shows that Canadian publisher operating profit margin has increased since the copyright reforms in 2012 as it stood at 9.4% in 2012, 9.6% in 2014, and 10.2% in 2016.

As for the education publishing market, the Statscan data shows sales increasing for educational titles from Canadian publishers: $376.6 million in 2014 to $395.1 million in 2016. The data shows similar increases for children’s books from Canadian publishers. Interestingly, there is a parallel decline for educational sales as agents, suggesting that the educational market overall has seen little change other than a shift toward Canadian titles. The success of Canadian authors is mirrored by the Statscan data on nationality of sales with Canadian authors seeing a significant increase in sales in Canada, whereas foreign authors have experienced a slight decline.  In considering new titles published, there is a slight decline among Canadian authors of about 6%, but the rate of decline is far higher – nearly 13% – for foreign authors.

The Canadian publisher trends mirror those found with publishers around the world. For example, Cambridge University Press reports higher operating profits with digital products now constituting 36% of revenues. Yet its latest annual report notes the changes in the academic market worldwide:

The Higher Education market is going though rapid change and challenges, including the rise of open educational resources, disruptive technologies and shifts in purchasing habits, which have hit particularly hard at the entry level undergraduate market.

Oxford University Press tells a similar story in its most recent annual report, with many challenges that have little to do with fair dealing or collective licensing:

This year market conditions continued to challenge academic and research publishers. Libraries continue to make evidence-based purchasing decisions, with their budgets growing very slowly. Higher Education (HE) rental models are growing in popularity, and there is an increasing demand from funders for Open Access or Open Educational Resources. Online piracy remains a significant threat in the academic market, and publishers continue to invest heavily in digital offerings to meet evolving user expectations. Despite these factors, the Press’s academic publishing achieved a solid turnover increase, with the academic book business returning to growth.

iii.    Access Copyright Distribution Decline

Given the shift away from the Access Copyright toward other licenses and methods of acquisition, the distributions from the copyright collective have unsurprisingly declined. Access Copyright’s latest annual report points to sharp drops in revenues from education and corresponding declines in distributions to creators and publishers.

The impact of the declines in distributions have been discussed by several witnesses and briefs. Broadview Press, which used its submission to the committee to urge it to retain the current copyright term of life of the author of plus 50 years (ie. do not harm the public domain), says that it generates approximately $3.5 million annually in sales. Its revenue from Access Copyright has dropped by $30,000 (from $50,000 to $20,000), or just under 1% of total revenues. The impact on House of Anansi is even smaller. Its submission reports its annual revenue is approximately $7 million with Access Copyright revenues dropping by about $17,000 (from $22,000 to $5,500) or 0.2%.

Authors have also pointed to the decline in Access Copyright royalties. For example, author Sylvia McNicoll, presenting for the Canadian Society of Children’s Authors, Illustrators and Performers, submitted a brief indicating that in 2012, she earned $46,000 with the Access Copyright royalty contributing $2,578.68. Last year, her income dropped to $12,000 and the Access Copyright royalty declined to $400. The decline of $2,100 in Access Copyright royalties is significant, though obviously there are other factors at play since she reports that her overall income dropped by $34,000.

2.    Reconciling the Data

The three trends have left MPs searching for answers about how spending is on the rise but Access Copyright distributions have declined. For authors groups, the answer is simple: they argue fair dealing is responsible for the education decision to shift away from the Access Copyright licence. They point to aggregate photocopying data from several years ago to suggest that there is still considerable copying taking place and that it is unfairly uncompensated.

Yet the data suggests that fair dealing is a very small part of the story. First, copying itself is a shrinking method of accessing materials. Access Copyright often talks about 600 million copied pages, but the Federal Court of Appeal has noted in a case involving K-12 schools that that number was actually less than 10 pages per student per month, suggesting that even in aggregate the amount of copying was not unfair:

In explaining why looking at the aggregate volume of copies was not helpful to its assessment of whether the copies were widely distributed, the Board reasonably applied the Supreme Court’s teachings in CCH and Alberta. I find no reviewable error on the part of the Board in this respect. In fact, this finding is reasonable even if one were to consider that the overall number of copies represents approximately 90 pages per student per year. I agree with the Consortium that this figure does not support the view that this factor could only tend to a conclusion that the dealing was not fair.

Moreover, the time of providing photocopied pages of materials to students is rapidly coming to an end. As Allan Bell, Associate University Librarian at UBC noted to the committee:

Our students are demanding more digital content, and more digital experiences. Selling photocopies to 19 year olds is something that does not work today, and certainly won’t work tomorrow.

In fact, Bell advised that books are increasingly being placed in storage and not copied at all:

The other thing is the circulation. Our books are being used less. Indeed, many of our books are being put into a storage facility, where they are safely not being copied.

Canadian universities have given the committee precise data on the sources for course materials found in learning management systems on reserve. The University of Guelph told the committee:

Currently, 92% of the materials we acquire are digital, and the rights we negotiate provide for
greater legal opportunities for the use of those materials. Students at the university access course readings in a variety of ways: they purchase textbooks from the university bookstore; they access materials placed on reserve in the learning management system, including 54% through direct
links from licenced materials, 24% open and free Internet content, 6% via transactional licences, with the remaining 16% under fair dealing.

Ryerson provided similar figures to the committee:

Through Ryerson’s copyright management e-reserve system and other commission services we spend more than $150,000 annually in transactional commissions for copies that are not within our licensed resources or are beyond fair dealing. Some of these transactional licences are direct publisher transactions or brokered through the U.S. copyright clearance centre and fees are returned to Access Copyright as Access Copyright does not currently permit direct transactional commissions, as far as Ryerson knows. More than 80% to 90% of the content we make over to our students in e-reserve is covered through licences for digital materials, links to legally posted publicly available materials and open access content.

The data points to the changing realities of access to materials with site licensing now constituting the majority of electronic reserves followed by open access or freely available online materials. Schools are also collectively spending millions of dollars on transactional licensing that grants access to specific works as needed. The fact that universities spend significant sums on transactional licenses also reinforces that no one thinks that fair dealing is a free-for-all. The role of fair dealing is relatively modest, reflecting a small part of overall availability of works.

For MPs seeking answers to the state of educational copying in Canada, the data tells us that schools continue to spend and publishers continue to garner growing revenues. The emergence of licensing alternatives to Access Copyright is the obvious reason for declining distributions at that collective, not fair dealing. Posts later this week will continue the focus on the declining value of the Access Copyright licence as education identifies more convenient and flexible alternatives.

The post Canadian Copyright, Fair Dealing and Education, Part One: Making Sense of the Spending appeared first on Michael Geist.

Judge For Yourself: Bell Says It Didn’t Meet CRTC to Review the FairPlay Application, But Here’s the Slide Presentation

Michael Geist Law RSS Feed - Thu, 2018/05/17 - 09:10

The revelation that Bell met privately with the CRTC to present its site blocking proposal months before it became public garnered considerable attention yesterday. The internal documents, obtained and posted by the Forum for Research and Policy in Communications, indicate that the groundwork for the site blocking proposal was laid in the summer of 2017, well before public filings or press reports. As far back as July 2017, Bell executives pressed CRTC commissioner Christopher MacDonald for a meeting with all CRTC commissioners and senior staff to make its case for a commission-backed site blocking system.

The CRTC and Bell were asked about the report yesterday by Mobile Syrup. The CRTC responded that there “is nothing procedurally unusual in this case”, noting that stakeholders can raise any issues that are not formally before the commission. In other words, the commission takes the view that companies are free to lobby without limit until the moment of filing, thereby laying the groundwork for a proposal with commissioners and commission staff without having to respond to public commentary. In this case, the presentation led to the drafting an internal legal memo on the issue well before the public filing.

As for Bell, it says that it “has not met with CRTC commissioners to review the FairPlay application.” Given that the calls and meetings took place months before the formal filing of the application, that statement is technically true [A Wire Report report indicates the meeting was with CRTC officials, not commissioners]. The presentation itself, however, largely mirrors the actual application, with a detailed review of the law and policy arguments. The actual Bell filing can be found here. The slides from the presentation, which follow the same line of argument and contain the same information, are posted below. Canadians can judge for themselves whether the CRTC was wise to offer a private meeting pitching the forthcoming proposal and whether there is a meaningful distinction between the proposal Bell secretly presented to the CRTC and its actual filing.

Bell presentation to CRTC, September 21, 2017, obtained under ATIP

Bell presentation, obtained under ATIP

Bell presentation, pg3, obtained under ATIP

Bell presentation, pg 4, obtained under ATIP

Bell Presentation, pg. 5, obtained under ATIP

Bell Presentation, pg. 6, obtained under ATIP

Bell Presentation, pg. 7, obtained under ATIP

The post Judge For Yourself: Bell Says It Didn’t Meet CRTC to Review the FairPlay Application, But Here’s the Slide Presentation appeared first on Michael Geist.

Fair Play for FairPlay?: Bell Presented Its Site Blocking Plan to the CRTC Months Before It Became Public

Michael Geist Law RSS Feed - Wed, 2018/05/16 - 09:03

The Bell website blocking coalition responded to thousands of interventions on its proposal this week, reiterating many of the same claims it has been making since it launched the request with the CRTC. While the commission should provide details on what comes next shortly, according to internal commission documents released under the Access to Information Act, the high profile public consultation only came after months of private discussions between Bell and CRTC officials on the site blocking plan.

The internal documents, obtained and posted by the Forum for Research and Policy in Communications, indicates that the groundwork for the site blocking proposal was laid in the summer of 2017, well before public filings or press reports. As far back as July 2017, Bell executives pressed CRTC commissioner Christopher MacDonald for a meeting with all CRTC commissioners and senior staff to make its case for a commission-backed site blocking system.

 

Bell call to CRTC commissioner, obtained under ATIP

 

McDonald followed up on the call by suggesting that Bell be given the chance to present its proposal to the full commission without a public filing.

 

CRTC email re: Bell presentation proposal, obtained under ATIP

 

The request ultimately led to a presentation dated September 21, 2017 that provided a detailed preview of the filing, complete with policy and legal arguments supporting the proposal. Bell raised the same issue before a House of Commons committee the day before, recommending that site blocking be added to the North America Free Trade Agreement.

The presentation, titled Anti-Piracy Coalition: Site Blocking Proposal, featured only the Bell corporate logo and made no references to other coalition members. Over several slides, it argued for site blocking and an anti-piracy agency, claiming the proposal is consistent with other countries and fits within the CRTC’s mandate. The final submission months later employed the same arguments and data.

 

Bell sends blocking PPT, obtained under ATIP

The Bell presentation appears to have sparked further action within the commission, including the crafting an internal legal opinion on piracy website blocking. Stephen Millington, the CRTC’s Acting Senior General Counsel, requested a copy of the opinion one day after reports of the site blocking plan leaked in Canadaland in December 2017.

 

CRTC legal opinion, obtained under ATIP

 

Moreover, on the day of the formal filing, Bell provided a separate copy to senior commission officials with the email indicating the additional copy was “as requested”.

 

Bell filing email, obtained under ATIP

 

The meetings raise serious fairness concerns regarding the regulatory process on website blocking. By granting Bell a private audience with CRTC officials, the company was able present its case without counter-arguments or a public airing. In fact, without a transcript of the meeting, there will be questions about whether the ultimate CRTC decision may have been influenced by evidence presented outside the formal hearing process.

Moreover, the private meetings clearly had their intended effect with commission officials developing internal positions and analysis without a formal filing or the benefit of the dozens of detailed submissions that carefully examined the legal implications of site blocking for freedom of expression, net neutrality, due process, and the CRTC’s jurisdiction.

The concerns are exacerbated by the fact that it appears the meetings were not disclosed in the lobbyist registry. The registry references five meeting between Bell and CRTC officials between October 2017 and February 2018, but there are no reports of a September meeting nor of earlier communications.

The five meetings over a five month period is notable since it points to a significant increase in the number of meetings between the Commission and Bell since CRTC Chair Ian Scott took over in September 2017. Bell did not report any CRTC meetings in all of 2016 and the first half of 2017.

There are benefits to active discussions between the CRTC and all stakeholders. However, granting Bell a private audience for its website blocking proposal months before launching a public process ultimately feeds fears of industry capture of Canada’s telecom regulator and calls into question the fairness of a proposal ironically branded “fairplay”.

The post Fair Play for FairPlay?: Bell Presented Its Site Blocking Plan to the CRTC Months Before It Became Public appeared first on Michael Geist.

Not So Fast: Digging into MEI’s Report on the State of Canadian Wireless Services

Michael Geist Law RSS Feed - Fri, 2018/05/11 - 09:10

The release this week of the Montreal Economic Institute’s telecommunications report has the feel of a last gasp for a dying argument about the state of Canadian wireless. Gone are the days of telecom companies and their supporters denying that Canadian wireless prices are high relative to other countries. In its place are arguments seeking to justify high prices on the basis of claims that Canada has better networks and challenging geography. What is striking about the latest report is how these arguments fail upon closer inspection with the MEI resorting to creating incomplete data charts on network quality and failing to grapple with countries that have better networks, better pricing, and less wireless density.

MEI relies on two sources for its comparative look at wireless speeds: Ookla and OpenSignal. It argues that Canada ranks 6th in the Ookla report among OECD countries and 9th in the OpenSignal report among the 34 countries surveyed. To illustrate its point, it created two charts to display the rankings. The report then claims that “international metrics have consistently shown that Canada has some of the highest quality wireless networks in the world.” Yet a review the latest source documents reveals that MEI has excluded many of the countries surveyed. In the Oookla report, Canada actually ranked 9th (not 6th) as the MEI report simply excludes non-OECD developed countries such as Singapore and the UAE. The MEI chart is on the left, the rankings it used on the right (Canada has dropped further in the current rankings to 10th).

 

Comparison of Ookla data, MEI chart at http://www.iedm.org/sites/default/files/web/pub_files/cahier0118_en.pdf, Ookla chart at https://web.archive.org/web/20180322190824/http://www.speedtest.net/global-index/

 

In the OpenSignal report, there are many more than 34 countries surveyed and Canada ranks 11th (not 9th) with Singapore and Bulgaria both excluded from the MEI rankings. The MEI chart is on the left, the actual rankings on the right.

 

Comparison of Open Signal data, MEI at http://www.iedm.org/sites/default/files/web/pub_files/cahier0118_en.pdf, Open Signal at https://opensignal.com/reports/2018/02/state-of-lte

 

When MEI is not inflating Canada’s global ranking by excluding countries, it is ignoring some rather obvious counter-factuals. For example, it raises the common claim that Canada’s geography accounts for high prices:

The Nordicity study does not take into account one key geographical factor affecting cost, which is the fact that Canada has a relatively small population on the second largest landmass in the world. Even if we subtract the substantial portion of the territory which is uninhabited, the density of wireless connections per square kilometer in Canada is the fourth lowest among 35 OECD countries, just above Norway, Australia, and Iceland.

Yet the three countries that are less densely populated than Canada – Norway, Australia, and Iceland – all rank ahead of Canada in the speed tests that MEI relies upon. In the Open Signal data, Norway ranks 3rd and Australia ranks 7th (Iceland is not included). In the Ookla data, Norway ranks 1st, Iceland ranks 2nd, and Australia ranks 8th. Not only do those countries provide faster speeds than Canada in less densely populated markets, but all also provide better consumer prices. According to the recently released Rewheel data, 30 euros buys 2 GB of data in Canada, 5 GB in Iceland, and 30 GB in Australia and Norway.

 

Re/wheel Research – The state of 4G pricing ̶ 1H2018 http://research.rewheel.fi/downloads/The_state_of_4G_pricing_DFMonitor_9th_release_1H2018_PUBLIC.pdf

 

In fact, a simple comparison for pay-as-you-go prepaid options shows how badly Canada compares to those countries with faster networks and less wireless density. Here’s Rogers pay-as-you-go plan for $50: unlimited texting, evening calls, and 500 MB.

 

Rogers pay as you go, https://www.rogers.com/web/content/wireless-products/plans?cm_sp=wireless-_-pay_as_you_go-_-plans_banner#,Tabset1–2

 

By comparison, here’s Telstra’s pay-as-you-go plan for A$50 (or about $48) in Australia: unlimited texts, unlimited calls, unlimited international calls to 10 countries including Canada, 15 GB of data, rollover data of up to 50 GB, and $15 credit for any additional charges.

 

Telstra pay as you go, https://www.telstra.com.au/mobile-phones/prepaid-mobiles/offers-and-rates

 

In Norway, Telia’s 299 kroner (about $48) pay-as-you go package: unlimited calls, unlimited text, and 3 GB of data.

 

Telia pay as you go, https://telia.no/privat/kontant/smart-kontant

 

In Iceland, Siminn’s 2900 krona (about $37) pay as you go package: 50 texts, 50 minutes of calls, and 5 GB of data. There is also a data-only package at the same price for 10 GB of data.

 

Siminn pay as you go, https://www.siminn.is/en/prepaid

 

In every case, Canada offers slower speeds and has greater wireless density, yet is far more expensive. The reason is obvious: it is not geography or fast networks that distinguish Canada. In a country that ranks dead last in the Rewheel wireless data, it is the lack of competition.

The post Not So Fast: Digging into MEI’s Report on the State of Canadian Wireless Services appeared first on Michael Geist.

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