What’s the story with the iPod tax?

Watching some election speeches, I continue to see Conservative Party leader Steven Harper talk about the so-called “iPod tax” which he says the opposition parties want and which the Conservatives don’t want. While it is typical of the silliness during campaigns, the reality of this policy is more nuanced than the campaign speeches and partisan talking points are.

The short form is that this is not a new policy, but proposed changes to an existing part of the Canadian Copyright act. The Conservatives supported the status-quo in Bill C-32, the Liberals proposed replacing it, the Bloc supported expanding it, and the NDP supported finally having the necessary conversation to do something.

The longer form

The Private Copying regime was added to the Canadian Copyright Act in 1997 with a bill that was coincidentally numbered Bill C-32 (35'th parliament). This created an exception to copyright where is was no longer an infringement of the musical work, performers performance, or the recording if the work was copied onto an audio recording medium for private use. In exchange for this exception there would be a levy placed on blank audio recording media that would pay the composers, performers and makers of sound recordings.

The levy was placed on blank cassettes (remember them?), and more recently writeable CD’s (CD-R, CD-RW, CD-R Audio, CD-RW Audio).

As people moved from one mechanism of storing audio to another, the regime was not able to move with it. It risked fading out of existence if it was not updated as people moved from magnetic media to CDs and more recently to flash and other type of digital memory. Various attempts by the collective societies to apply the levy to modern storage media such as the memory in portable music players has been rejected by the copyright board and courts interpreting outdated legislation.

Whether someone supports the regime or not, it is clear that this regime is outdated and something needs to be done. A conversation is necessary to decide whether the regime will be expanded to clearly cover the way people currently store music, replace the regime with something different, or abolish it entirely.

When this regime was put in place in 1997 it was supported by all three copyright holding groups in the music industry, but since that time the recording industry (makers of sound recordings) has changed their position.

Conservative position

The Conservative party has for a long time suggested they opposed this regime in multiple platform statements and during multiple election campaigns, claiming it was an unfair “tax”. While the current campaign statements make use of a specific Apple branded product name, the underlying policy statements are the same.

The thing you get most clearly from Conservatives when you ask these questions is that they supported their Bill C-32 (40th parliament), and that it represents their detailed position on Copyright.

Bill C-32 did not propose to add new storage media to this regime, but clearly protected its current state.

In the proposed section 29.22 it would no longer have been an infringement of copyright to make reproductions for private purposes. This was different than the private copying regime in two important ways: it was not limited to audio recordings, and it was an addition to fair dealings which means that it did not involve any new levy.

The Conservative Bill C-32 clarified in 29.22(3) that this new Fair Dealing does not apply to circumstances otherwise covered by the existing private copying regime (private purposes involving an audio recording being stored onto an audio recording medium).

Passage of C-32 would have meant that truly private copying of all works would be an exception to copyright, but only for audio recordings would there have been a levy.

While section 29.22(1)(a) clarifies that the source of the material for this fair dealing must not be an infringing copy, this condition does not exist in the existing section 80 of the Copyright Act. This means that the new section 29.22 is not a complete replacement of what the existing private copying exception for audio covered, but since there is some overlap it would have meant lowering the amount of levy that is currently applied to audio recording media such as blank CD’s. Rather than allowing this reduction of the levy, the Conservatives decided to clearly protect the existing levy.

If the Conservatives were as opposed to this regime as they claim during election campaigns and in various platform documents, they would not have protected the regime in Bill C-32 as they did.

It should be noted that ratification of the two 1996 WIPO treaties, also a goal of Bill C-32, would have made the private copying regime subject to national treatment. This would mean that music copyright holders all over the world could demand an increase to the levy on blank media. In other words, while C-32 didn't expand the levy to devices, it did expand the existing Canada-only regime to become worldwide. The Conservative bill would have resulted in a massive increase to something they claimed to have felt was a unfair "tax".

Note: To be clear, carving truly private activities out of Copyright as expressed otherwise in C-32 is the right policy. This good policy is, however, made unnecessarily complex by including protection for the music levy and non-owner digital locks.

Liberal position

The most recent detailed commentary from the Liberal party came in a December 16, 2010 news release where they clarified that “The Liberal Party does not support the iPod levy”.

The press release and comments I heard at committee suggests that they are proposing replacing the existing private copying regime with a government program. It is unfortunate that they believe this government program should be in the “Copyright Act” as opposed to more appropriate enabling legislation, but that is a detail that would have to be presented in an actual bill tabled in the house. The devil is often in the details.

The Liberal platform repeated this unclear proposal by saying, “Liberals have worked to pass effective copyright legislation, including a private copying compensation fund instead of any new tax on consumers”.

The Bloc Position

I need to rely on statements made by Carole Lavallée and Serge Cardin during the C-32 hearings. They offered strong support for expanding the existing regime to clearly cover all media and devices onto which audio could be stored. Statements from Bloc representatives were the clearest support for something that could be called an “iPod tax” from any MPs.

The NDP position

I have heard a few things from NDP Charlie Angus in relation to this issue. In the previous parliament he tabled a private members bill Bill C-499 which proposed expanding the existing regime to audio recording devices. He suggested that this was done to push the debate forward, given the existing regime was no longer fulfilling its intended purpose

It would have been interesting to have heard more details from Mr. Angus during debate of that bill, and whether he would have supported a replacement of the existing regime as an alternative to expansion. We won’t know until later if this issue, or anything else relating to copyright or a digital strategy, will be included in the NDP platform.

My position

My position on this regime was included in my BillC-32 FAQ.

I oppose the existing regime, as well as its expansion. From a wide variety of interviews I've done over the years it is obvious that Canadians don’t understand how the regime works. This confusion has caused people to carry out infringing activities which they believed were covered. I believe if an independent study were done it would confirm that the regime has resulted in more lost revenues to composers and performers than the regime brought in to these copyright holders.

I feel that a government program modelled after the existing Public Lending Right should be replace the regime. Like the PLR this would be something outside of the copyright act that is clearly a government program, and does not add unnecessary and counter-productive complexity to the copyright act.

This would be in addition to something similar to what we saw in Bill C-32's proposed section 29.22 which would have carved truly private activities out of copyright. Copyright has no place in the bedrooms of the nation.

Who to support?

If this were a major issue for me, and I voted along party lines, who do I think handles this issue the best?

I obviously disagree with the Bloc position which I consider to be harmful to the interest of both musicians and technology/media owners. I don’t live in Quebec and can’t vote for them, but from what I heard from them during C-32 committee I wouldn’t vote for them if I did live in Quebec.

I’m sceptical of the opposition the Conservatives express during campaigns to the regime given they avoided a clear opportunity within C-32 to reduce the size of the levy. They opted to push forward a status-quo position, all the while trying to claim they are the strongest opposition to the regime. I wouldn’t be as sceptical if they weren’t so aggressively trying to make this into an election issue when their position within C-32 on this issue was so weak.

I’m hopeful about the position from the Liberals, but worry about the details. Why should the replacement of this regime be contained within the Copyright act? If it walks like a duck, talks like a duck, why not treat it as a duck? If it is a government program, then it should be properly created as a government program. Government programs have no place in the Copyright Act.

This is a failed policy introduced by Liberal Heritage Minister Sheila Copps in 1997. The suggestion that the replacement government program for this failed government program should also be added to the Copyright Act suggests the policy makers in the party might not have learned any lessons in the past decade and a half.

I am also hopeful about the position from Charlie Angus (uhm.. NDP :-). He wants to get this issue dealt with in front of parliament some time before digital computers and current storage mechanisms are a thing of the past, replaced with something new. Some say the singularity is coming upon us :-)

I’m glad this isn’t an important issue for me, and that I don't vote based on parties, given there isn’t any clear winner from a party policy point of view. If anyone representing the parties wishes to publish something more detailed, please let me know as I am interested. If you are a candidate willing to offer your own views, I am even more interested to be in touch!

On IT property rights things are a bit more clear. While the Conservatives have property rights as part of their founding principles, recent Conservative Copyright bills suggest they are the weakest of the parties when it comes to protecting the rights of technology owners. Who would have guessed that when they rose to power in 2006?! My only hope is that this is a misunderstanding about how many classes of owners would have been negatively impacted by their bills, and that this critical mistake will be corrected in any future policy from the Conservatives.

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NDP platform

The NDP platform does not include any statements on the private copying regime.

This is not surprising, given the only people wanting to talk about it is the Conservatives. It is odd given the Conservatives can be said to have the weakest position on the private copying regime of wanting to retain the status-quo over the various options to update or replace it.

For more on the NDP position on issues of concern to this community, see the following sections:

"5.2 Ensuring Canada’s Arts and Culture Thrive"

Promoting production of CANCON good (details?), but not sure what promoting broadcast would involve. We need to move away from the separation of whether to regulate or not being tied to the specific technology used to distribute. It is incorrect to regulate one way if communications by wired or wireless is used, but another if shiny round disks are used.

CANCON regulation should be tied to scenarios where there is editorial control. This would mean that an on-demand digital streaming service with millions of titles for Canadians to choose from would not need regulation, but a WALMART dedicating limited shelf space to selling an edited subset of titles would be. The point should be that Canadians should have access to the content that they want, and that there isn't any intermediary filtering their access to Canadian programming.

"5.3 Building Home-grown Film and TV Production"

The NDP would party like it's 1899 with maintaining Canadian "ownership" restrictions in an era where it is clear that appropriate regulation of activities is more effective. Regulation of ownership is simply corporate protectionism that has the overall effect of reducing choices for Canadians wanting to communicate with other Canadians.

"5.4 Investing in our Shared Cultural Heritage"

"5.14 Ensuring all Canadians Have Access to Broadband
and a Robust Digital Economy"

Mixed bag.

Relying on market forces is a good thing, and it was how the 2006 Conservative CRTC directive was being interpreted to disallow market forces that was the problem. It is the lack of a free market in Canada that needs to be corrected -- deregulation in a government granted monopoly scenario does not accomplish goals of those who promote market forces.

While I disagree with UBB on non-Internet connections, prohibiting usage based billing for *Internet* services would be inappropriate.

An example of a non-Internet service that shouldn't have usage billing is the Gateway Access Service (GAS). This is a data connection between ISPs and customers over regulated last-mile and phone/cable internal networks. This data connection can be used for a wide variety of services including IPTV, VoIP, VPN's, as well as Internet. It should never be claimed to be a reselling of residential ISP services from phone companies as it is not.

"We will introduce a bill on copyright reform to ensure that Canada complies with its international treaty obligations, while balancing consumers’ and creators’ rights."

This is a vague statement that is the same as what every party has said. The defferences are always in the details: what obligations do we have (IE: there is no legal obligation to ratify any WIPO treaty, participate in ACTA, etc), and what does the word "balance" mean in Copyright given even the most one-sided bills over the years have claimed to be balanced.

It is a way to mention copyright without actually saying anything that would upset anyone during an election.

"5.15 Restoring the Long-Form Census"

Our community tends to support evidence-based policy making, so this is a positive in two ways. It recognises that the "privacy" claims about the long-form census were backwards (more privacy problems without long-form tan with), as well as recognising the value of the long-form as a statistics-multiplier for nearly every other study done about Canadians.