Taxes on CD Blanks Not Enough

According to Slashdot, there’s going to be an initiative to collect fees from Canadian ISP to compensate for copyright infringements: Canadian Music Industry Wants Royalties on Net Usage Citing SOCAN, this is all about something called Tariff 22.

So in 1995, to protect its members’ rights, SOCAN proposed and filed Tariff 22 with the Copyright Board.

Tariff 22 seeks to licence the royalties for the public performance of musical works by means of any telecommunication service whose transmission can be independently accessed. The primary target of this tariff is the Internet access providers.

The Copyright Board decided to conduct hearings for Tariff 22 in two phases. Phase one, completed in the fall of 1999, dealt with legal issues pertaining to the tariff such as who is liable and what actions are liable under the Copyright Act. Phase two will deal with the tariff structure and who specifically will be liable within the communication chain for the payment of fees and amount of those fees under the tariff. As yet, the date for the hearing of phase two has not been set.

The article cited on Slashdot suggests that SOCAN is going to the Canadian Supreme Court to get action on this tariff that is more to their liking.

Canada’s songwriters will ask the Supreme Court of Canada next week to force Internet service providers to pay them royalties for the millions of digital music files downloaded each year by Canadians.

[…] So far, SOCAN has had partial success in convincing a Canadian court of the justice of its cause. SOCAN had originally asked the Copyright Board of Canada to impose a royalty on Canadian ISPs but the Copyright Board ruled that ISPs ought to be granted an exemption from paying royalties because they were, like telephone companies, simply a carrier or transmitter of the music files. SOCAN appealed that decision to the Federal Court of Canada and, there, found some success.

The Federal Court agreed with the Copyright Board that ISPs were indeed carriers or transmitters of content except when ISPs engaged in caching content to speed up the performance of their systems. Caching (pronounced cash-ing) is a common procedure used by ISPs in which copies of popular Web pages are stored on a computer close to a group of end users. When an end user in Toronto, for example, requests the home page of search site Google, the Google search page is retrieved from a computer in Toronto rather than from Google’s main computers in California.

The Federal Court held that the act of creating a cache of content means that ISPs are moving from their role as carrier to a role in which they actively decide what kind of content will exist on their systems. And that means, under Canadian copyright law, they should be responsible for that content.

The ISPs disagreed with that interpretation of the Federal Court and were granted leave to appeal that ruling to the Supreme Court. […]

SOCAN is proposing that ISPs pay a royalty of 25 cents per subscriber per year as well as 10 per cent of any gross profit ISPs make through the sale of advertising.

A Setback for the Second Enclosure Movement

From Scrivener’s Error: We Want Information — a discussion of the decision in Applied Technologies of Wisconsin, LLC v. WIREData, Inc., No. 03-2061 (7th Cir. Nov. 25, 2003) (Posner, J.)

This case is about the attempt of a copyright owner to use copyright law to block access to data that not only are neither copyrightable nor copyrighted, but were not created or obtained by the copyright owner. The owner is trying to secrete the data in its copyrighted program—a program the existence of which reduced the likelihood that the data would be retained in a form in which they would have been readily accessible. It would be appalling if such an attempt could succeed.

[…] From the standpoint of copyright law all that matters is that the process of extracting the raw data from the database does not involve copying Market Drive, or creating, as AT mysteriously asserts, a derivative work; all that is sought is raw data, data created not by AT but by the assessors, data that are in the public domain.

Plus, in dicta, we get some great Posner thoughts:

WIREdata is not a licensee of AT, and AT is not suing to enforce any contract it might have with WIREdata. It therefore had no cause to drag the licenses before us. But since it did, we shall not conceal our profound skepticism concerning AT’s interpretation. If accepted, it would forbid municipalities licensed by AT to share the data in their tax-assessment databases with each other even for the purpose of comparing or coordinating their assessment methods, though all the data they would be exchanging would be data that their assessors had collected and inputted into the databases. That seems an absurd result.

An FTAA Call to Arms

Recall that I cited a NYTimes op-ed on the FTAA negotiations a couple of days ago. IP Justice is circulating a rather inflammatory report on the recent meeting, entitled IP Justice Report from the FTAA Trade Ministerial Meeting in Miami. The story they tell is particularly distressing. I am in no way an expert on this treaty, but it’s clear that there’s some homework to be done here to see just how far the treaty goes:

The intellectual property rights chapter proposes that all signatory countries must adopt four different World Intellectual Property Organization (WIPO) agreements whose drafting is not finished and 2 WIPO Treaties whose drafting has not even been started yet (broadcasting and database protections). Many Southern countries have intentionally steered away from signing onto WIPO Treaties, which they view as stifling their development and ability to compete with the US in important technology sectors.

FTAA’s IPR chapter expands the subject matter of intellectual property rights, creates new forms of intellectual property rights, and eliminates exceptions and flexibilities to these rights. The chapter also contains significantly stronger enforcement measures such as criminalizing non-commercial copyright and patent infringements.

[…] One of the most controversial sections of the IPR chapter requires countries to outlaw the circumvention of technological restrictions. Similarly to US Digital Millennium Copyright Act (DMCA), FTAA would require all other countries to outlaw the bypassing of technological restrictions controlling copyrighted works, such as DVDs, CDs, and eBooks. It would also forbid anyone from helping another to bypass these controls, including outlawing tools, software, and technical information. One proposed FTAA clause contains an explicit basis against the development of free and open source software development by creating greater liability for those programmers than for proprietary programmers who write software capable of bypassing digital controls. These anti-circumvention measures have been widely used in the US to threaten freedom of expression and chill scientific research in the critical field of information security. Anti-circumvention laws have also served to prevent competition for after-market replacement parts and interoperability between systems. [emphasis added]

The treaty’s section on the enforcement of intellectual property rights proposes to criminalize non-commercial infringements, such as peer-2-peer (P2P) file-sharing. Another proposal would expand the scope of copyright to permit the copyrighting of facts and scientific data. The IP Justice White Paper “FTAA: A Threat to Freedom and Free Trade” discusses the IPR chapter’s dangers in greater detail.

Some Download For Fee Statistics

From The Register: Ten million Americans pay for music downloads in Q2

Ten million Americans paid to download music during the second quarter, according to the latest statistics from market research company Ipsos-Insight.

That equates to 16 per cent of the total number of US-based users who download songs, legal and illegal, the company said. Paying downloaders accounted for eight per cent of all US users in Q4, 2002 and 13 per cent in Q1, 2003.

Michael Speck: ARIA’s Bulldog

Slashdot reports that the Australian Recording Industry Association (ARIA) is preparing to sue ISPs over the downloading of copyrighted content. Michael Speck, who has made something of a name for himself by promoting a particularly stringent perspective on copyrights, is cited.

ARIA’s music industry piracy investigations manager Michael Speck said ISPs relied on illegal music downloads for 20 per cent of their revenue and were aware customers were flouting copyright laws but did nothing to stop them.

He said the failure of Internet companies to prevent copyright infringements left ARIA with no choice but to prosecute them.

But Internet Industry Association chief executive Peter Coroneos slammed Mr Speck’s comments as “provocative” and “inflammatory” and said ISPs were keen to work with copyright holders to prevent infringements.

A particularly interesting bit, in light of his generally strident tone, appears at the close of the article:

Mr Speck said ARIA did not plan to prosecute individual music downloaders, as the US music industry had done.

A Little More Lessig

Seems like it’s just been that sort of day. From BoingBoing: Fiber to the People

The answer, as Cornell economist Alan McAdams argues, has nothing to do with Karl Marx and everything to do with basic economics. AFNs are natural monopolies. That doesn’t mean that there can be only one, but rather that if there is one, then it is far cheaper to simply add customers to the one than to build another. The electricity grid in a local neighborhood is a good example of a natural monopoly. Sure, we could run four wires to every home, but do we really need four electricity companies serving every home?

The question is not who installs the wire, but who provides the service. Provocative, at least.