Tuesday, April 17, 2007

Tariff 22 Opening remarks

Today Copyright Board hearings began into Tariff 22, SOCAN's proposal (scroll down to 'Tariff 22') to charge royalties for the use of music on the Internet. Tariff 22 has been before the Copyright Board before, in a case that went all the way to the Supreme Court of Canada. The SCC ruled in 2004 that SOCAN could not charge ISPs for the use of online music insofar as they were only the conduit for communication of the music. That decision was part of what SOCAN is calling Phase I of their efforts to get royalties for online music.

While most ISPs may fall outside of this tariff, there are still lots of people that SOCAN wants to charge. They are now pressing ahead with Tariff 22 in what they are calling Phase II, the attempt to set the rates of the tariff for various types of uses, including "permanent and temporary downloads, on-demand streaming, audio webcasts, webcasts of radio or TV station signals and communications via game sites".

At the hearing today, SOCAN and seven objectors presented their opening comments.

SOCAN outlined the proposed tariff (scroll down to 'Tariff 22'), and made several last-minute changes to their proposals:
  • for amateur podcasters whose programming is less than 20% music and who have no revenue, SOCAN proposed a $60 annual fee
  • they reduced their proposed $200 monthly fee for campus and community radio to a $90 monthly fee
  • they now propose that a low-use category be made available for simulcasters.

The Canadian Association of Broadcasters, the CBC, Iceberg (a music streaming service), a group of cable and telcos, the online gaming industry, and the National Community and Campus Radio Association all presented objections. Many objectors were concerned about SOCAN's methodology for calculating the tariff, its basis on percentage of expenses or percentage of revenue, and the types of uses it might encompass. Here are a few additional highlights:

The Cable and Telcos argued that downloading of music in online stores or onto cell phones constitutes a point-to-point communication, not communication to the public, and therefore should not fall under the tariff.

The CBC and the National Campus and Community Radio Association argued that they should not have to pay an additional fee to simulcast existing radio programming. They argue that they are using the same material to reach the same audience and should therefore not be charged twice; that they are simply transferring an existing practice onto a new medium; that they are simply following their audience onto a new technology, and that the tariff should be technologically neutral.

CRIA and Apple argued that no fees should be charged for previews of music in online stores and the like, since such previewing only increases the sales of songs and therefore pays for itself.

The Entertainment Software Alliance argued that the gaming industry prearranges all payments for any music they use in games and, especially, that games - even online ones - to not involve transmission of music to the public since the music is not transferred over the Internet but is loaded with the game software onto individual computers.

The National Campus and Community Radio Association argued that the original proposed tariff would amount to about $30 000 per station - far too much for small stations with budgets of $10 000, and even for bigger stations - and would simply cause those stations to stop broadcasting on the Internet.

There did not appear to be any representatives for amateur podcasters.


  1. The only internet broadcaster I've met personally was someone from Radio Free Peterborough. I was inspired by the project because it was started with very little resources and used all Free Software to run. Stations like this likely could not exist with the proposed tarrifs. I send them a link to your article. What upsets me the most about the possibility of this legislation is that those who would be hurt the most by it is likely to be the non-profit and independent media broadcasters.

  2. Yes, this tariff would not only eliminate small independent broadcasters online, but rob the artists they support of a very valued outlet (I have some of my own stuff on Radio Free Peterborough :-)). I'm also able to keep up on what is happening on Trent Radio (trentradio.ca) even when I'm out of the city.
    SOCAN is being absurd in their demands. I'm a member of SOCAN (I've emailed themas well as been outspoken in their recent survey) but I don't feel they represent my interests at all. I will probably terminate my membership with them if they are "successful" with this thing.
    They have the advantage of being the "only game in town" as far as being compensated for commercial broadcast, but even on that front, the way they calculate their payments is completely skewed towards major label acts- something I have no intention of ever becoming...

    Thank you very much Sara for keeping us up on these proceedings.

  3. Good to see someone reporting on the hearing. The $30,000 I mentioned is actually a retroactive fee for simulcasting which would go back to the mid-1990s. Our main concern is the minimum fee, which is not based on the economic reality of non-profit netcasting and will shut down the bulk of our members.

  4. Hello:

    Thank you for posting a link to my blog. I've moved the blog yesterday and the link has changed. The post is now at http://kevindaoust.com/?p=33 (SOCAN Podcasting Tariff). If you can update the link, it would be greatly appreciated.

    I apologize for leaving this in your comments, but I could not find an e-mail address for you. Feel free to delete this after updating. Thank you very much!

  5. Calls to mobile phones or other wireless devices/internet calling may be charged at higher rates than calls to traditional landline phones. Additional fees and taxes may apply. All rates, promotional or otherwise, are subject to change at any time without notice. Call times are billed in one-minute increments.

  6. This comment has been removed by a blog administrator.

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