November 28, 2003

Taxes on CD Blanks Not Enough [4:15 am]

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.

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