The Copyright Board of Canada issued its latest private copying decision [pdf] on Friday. The fourth major decision from the board on private copying, the decision addresses the levy for 2005 – 2007 (the Canadian Private Copying Collective attempt to extend the levy to iPods and SD cards would commence in 2008).
Interestingly, the levy will decrease slightly as a result of this decision, though the Copyright Board was actually inclined to increase the rate (note that all opposing parties dropped out of the proceedings, leaving only the CPCC to present evidence). The Board felt that 29 cents would be the appropriate levy for blank CDs, yet kept the levy at 21 cents since that is what the CPCC requested. At the same, it reduced the levy for other blank media – cassette tapes dropped by five cents to 24 cents per tape, while CD-R Audio, CD-RW Audio, and MiniDiscs all dropped from 77 cents to 21 cents.
The reduction in the levy leaves a significant surplus with the Board estimating that the CPCC will need to return $2.5 million in overpayment for the past three years. The CPCC has expressed disappointment at this result and indicated that it will develop a plan to reimburse importers and manufacturers for the higher levies that were collected from 2005 – 2007. Of course, assuming that the price of the levy was passed along to consumers, it is not the importers and manufacturers that should receive the reimbursement – it is Canadian consumers. The Board absolves itself of this issue by stating that "it is not for us to determine who, in the supply chain leading to the final consumer, will be the ultimate beneficiary of these refunds." In other words, Canadians have overpaid millions of dollars over the past three years for the private copying levy, yet that money will go into the pockets of importers, manufacturers, and possibly retailers (sounds like a class action lawsuit waiting to happen).
In addition to the overpayment issue, the decision contains several interesting revelations. First, the decision sheds some light on the CPCC's enforcement program. The collective has aggressively targeted those parties that do not pay the levy, with 21 claims over the past three years. In fact, the enforcement program has been so effective that the Board found that concerns about the emergence of a gray or black market for blank CDs has not materialized. Second, the Board indicated that it expects that revenues earned from the levy will steadily decrease in the coming years as the popularity of blank CDs gives way to other media. Of course, the CPCC has sought to address that by expanding the levy to iPods and SD cards. Third, despite claims that the levy does not apply to computer hard drives, the decision reveals that the Canadian Association of Broadcasters struck a deal with the CPCC in which it agreed that it would not collect a levy on computer hard drives used by broadcasters primarily for broadcasting purposes. Finally, readers may recall a CPCC survey which purported to find that Canadians think the private copying levy is reasonable. The retailers objected to the survey, but the Board went out of its way to state that it took no account of the findings in reaching its decision.