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Sorting Through the Copyright Levy Proposals

The Canadian Private Copying Collective appeared before the C-32 Legislative Committee on Monday, leaving Access Copyright and the CACN with secondary roles as MPs devoted most of the discussion to the levy issue. While the levy vs. tax characterization discussion came up, it seems to me that there will be mounting confusion over the competing levy proposals.  The CPCC made their pitch, but there are now multiple proposals for extending the levy or creating entirely new levies (some varations are supported by the same organizations).  The key proposals:

1.    CPCC: The CPCC is arguing for an extension of the current levy to digital audio recorders (ie. iPods).  The collective applied the levy to iPods years ago, before it was struck down by the courts.  At the hearing, it noted that revenues from the blank CD levy are shrinking.  It says the levy on iPods would likely range from $2 to $25 per device.  When asked whether this meant that consumers would be asked to pay twice – once for the original CD and a second time via the levy – the collective unapologetically answered yes, maintaining that consumers should be asked to pay for every copy they make. Since the proposal is just an extension of the existing levy, it would only apply to sound recordings.

2.   CCC: The Creators’ Copyright Coalition, which includes ACTRA, SOCAN, the Songwriters Association of Canada, and the Writers Guild of Canada, published its position paper earlier this week.  In addition to seeking an extension of the current levy, it also supports the creation of an entirely new levy to cover reproduction for private purposes. Designed to compensate for copying such as time shifting and backup copies, the CCC argues for the creation of a “copyright levy to compensate creators of all types of works for private copying to any personal device or medium ordinarily used by consumers.”  This view is echoed by some of the member groups – the WGC says the “private copying regime must be extended so that it applies to all works on all distribution and storage devices.”  In other words, this seeks to cover everyone and everything – audio and video works for copying on all distribution and storage devices.

3.   SAC: The Songwriters Association of Canada, which is also part of the CCC position paper, has called for the creation of an Internet service provider levy in return for the full legalization of peer-to-peer file sharing.  Unlike the other proposals, the SAC levy would be an opt-in system.

Update: The SAC writes to add the following clarifications on its proposal:

1. we are working on a model that is now a business to business solution
2. we are talking about a licensing model – not a tax or a levy
3. we are hoping to have ISPs as partners
4. our model is an OPT OUT option

If taken together, the proposals would result in levies on all devices, media, and on Internet services. Separately, some groups are also calling for an ISP levy to fund Canadian content.

43 Comments

  1. CPCC – Yeah no. I paid for it once, you don’t need to get money from me again.
    CCC – Again, no. I should not have to pay an extra fee on a storage device I’m getting to transport my non-copyrighted data or computer backup because you want to make me pay for everything I want to use media for.
    SAC – So because I have the Internet, which I use for non-infringing purposes, I should have to pay a levy? Yeah no.

    Levies are nothing but a tax system that treats people as if they are breaking the law whether they are or not. If you want a levy, it should be on the media people buy (or have it priced appropriately for those uses) and not on the devices/services they use.

  2. You know, out of all the copyright “reform” ideas that have been cast, I can swallow one of these the easiest. A one time hit on my new hard drive of twenty bucks or whatever which would allow me to legally fill it with my MP3’s.
    I wonder how much a month to legally download P2P, a couple bucks or something I would be fine to keep big brother off my back. However, knowing the way corporate canada operates, it would likely be as much as the service in the first place.

    I never claimed to expect everything for free, I just refuse to purchase any digital media using the current delivery methods.

  3. A better question…
    If consumers aren’t buying CD’s anymore but buying directly to their Ipod aren’t they paying twice?
    I’m mean who’s buying cd’s anymore?


  4. @CPCC: iPod users buy their music directly in iPod format via iTunes.

    So what exactly is this levy for?

    @CCC: F… off.

    @SAC: Finally something sensible.

    Nap.

    Nap.


  5. @Chris: “So because I have the Internet, which I use for non-infringing purposes, I should have to pay a levy?”

    They mentioned an opt-in. I take it that if you don’t use P2P, you don’t need to pay the levy. But can be sued if you’re caught infringing in some way.

    If you want to use P2P then you can pay the levy and legally download all day long without the risk of being sued.

    Sounds fair to me.

    Nap.


  6. SAC should be talking to the ISPs too. If they come with a “Legal Full Speed P2P” package with no traffic shaping and legal filesharing, I can see how it can sell. Of course they’ll have to add to a base package the levy and some money for the ISP to not throttle P2P traffic. But it is a win-win-win proposition, for artists-customers-ISPs.

    Nap.

  7. No Levy
    Remember how we were discussing the absurdity that C-32 is being considered without any mention of eliminating the existing levy (“We are already paying for our piracy, how can they persecute us after we’ve already paid for it?”).

    Extending the levy just makes the problem worse for us down the road.

  8. imaginary
    taxes on proposed usage (according to figures they make up)
    assumes guilt. preemptive guilt.

    The populace will assume thattheir authority doesn’t exist, as they will pay two or three times for any given article.

    per usage.
    the new royality, indeed. NOT a viable political position.

    packrat

  9. How about other copryighted work?
    How about a levy for photographers, software authors, etc. After all, if we have to pay twice for the music, why shouldn’t we have to pay twice for the software, for the photographs you took, etc. It only make sense to apply the same regime. Copyright is copyright.


  10. Every now and then I buy a CD that is poorly recorded and mastered to the point of sounding atrocious. Since I cannot return it for a refund, how about a levy that “the industry” would pay to Canadians to compensate for such materials. I’d say $100/year/person would be OK.

    Nap.


  11. Agreed, the SAC proposal is the only one that makes any sense and the only one I would support. Most importantly, it’s simple and “Joe Public” can understand it. The other proposals are too narrow, not hitting ALL creator groups (Music, movies, photography, etc.) or create layers of levies, fees and regulations that the average person would not understand. I can’t find the article now, but some recording group in the EU (I want to say the Netherlands, but I’m not sure) proposed something similar.

  12. No, No Way, Maybe.
    The CPCC get’s points in my book for coming out and saying what they mean without all the doublespeak,

    kinda refreshing. Having said that, paying for shifting and even making a backup? Ummm .. no. Bill C-32,

    as well as 98% of the public, has already recognized those as fair uses.

    Regarding backups, how they think they deserve renumeration for that is perplexing. Especially with the

    inherent fragility of the physical A/V medium, I can scratch a book and it still works. And the obvious

    point that on digital players the bulk of the media is bought directly from services such as itunes

    there is no call for a shifting fee. To think the public is going to buy into this double dipping is

    quite naive.

    The CCC proposal suffers from the same problems with the addition of “it applies to all works on all distribution and storage devices”. Really? You want to ding my hard drive, memory sticks that I use mainly for business as well. So everyone who owns a ‘storage device’ is going to be loading it to the brim with your wares and thus must pay you homage? Such cognitive dissconnect and sense of entitlement here is a little hard to bear.

    The SAC proposal is another animal altogether. I doubt the content industry would buy into this sceme regardless of it all happening beyond their control anyways, because for the likes of the **AA it’s all about control. But it is an idea worth exploring, especially with the opt-in component. The logistics of such a system would be interesting but I think there would be an appitite for a lot of people for this type of service.


  13. @Crockett: “I doubt the content industry would buy into this sceme regardless of it all happening beyond their control anyways, because for the likes of the **AA it’s all about control.”

    Well, the problem is that “the industry” won’t see any money from this scheme. So obviously they won’t support it.

    If you look closer. “The industry” is concentrating on levies on physical media (cds, drives etc) because that’s what they do. If you remove the physical media from the equation and leave only artists-ISP-consumers into discussions, then CRIA is out of a job.

    Nap.

  14. I am the Taxman says:

    Why not tax electricity? People use it make private copies.

  15. Chris Brand says:

    SAC proposal
    Being opt-in makes a huge difference to the palatability of the proposal. What I don’t understand, though, is why it would need to be a levy at all. Isn’t this just a licensing deal between songwriters and the ISPs or internet users ? They could offer it to Canadians today, I would have thought…

  16. Sooo if this is about copyrights how come software and photography is not included? So if I start a PAOC (Photographers Association OF Canada) can I get in on this racket?

    I’ll set it up as non profit, collect the levies for copying of photographs, distribute the money or better yet pay off, I mean donate to politicians to pass more laws.

  17. ISP levy
    A while ago I outlined a mechanism that combined ISP preference/preemption of bittorrent, bandwidth measurements (caps), and a “levy” on P2P sharing of content based on tracking and bandwidth usage. (Alluded to by Nap above.) Although more akin to a radical business model than a proper levy, it did contain the seeds of a “fair levy” system.
    Although I received feedback on the idea, I never received any technical or social feedback that made the idea totally unworkable – except one.

    The one exception is that the current distribution channels could/would be cut from the loop entirely. Direct from copyright holder to ISP server(s) to audience, with money being returned from the audience to the ISP and then to the copyright holder. There was a built in “check and balance” throughout the system that allowed customers to bypass the ISP if they felt they were being unfairly treated. The more popular a particular content is, the more money the copyright holder would receive – based on direct measurements of downloading/popularity by the ISP. Pricing to the customer is based purely on the size/amount of copyrighted content downloaded. Other than size and popularity, content “value” is the same for everything (levy aspect of the proposal).

    This mechanism is unlikely to come into existence because it would completely change, or eliminate, the “big business models” built up around current copyright laws. They would never willingly accept the demise of their current business models. It could change everything about how society and creators view copyrighted content distribution. The idea is too “radical” for vested interests to accept.

  18. There are no two ways around it. The levy is utterly incompatible with Bill C32’s digital locks restrictions, as the presence of a digital lock would not allow a person to privately copy a work, and the decision to put a digital lock there is made by the content producer, not the consumer. Couple that with the profound additional economic incentive that Bill C32’s digital lock provisions give to content producers to utilize digital locks (the promise of legal consequences for people who break them), and the prevalence of media without any digital locks on them in the future if Bill C32 were passed is almost certain to be all but non-existent, and consumers will *NOT* have the private copying privilege on such works, making the notion of the levy utterly moot.

    I have no fondness for the levy, and I absolutely loathe Bill C-32’s digital locks provisions, but on this point in particular, the Conservatives are exactly right.

  19. *facepalm @ me*
    Doh, shows what I get for speed reading. The SAC proposal, while interesting, I don’t really see particularly feasible. It would require some sort of monitoring by the ISP, and some way to differentiate between non-infringing P2P traffic, and the kind that the levy would be designed to deal with. Since I don’t imaging that the information for P2P looks remarkably different between legal and illegal.

    Plus you’d need to get Bell, Rogers et all to actually agree that their networks can handle the load.


  20. @Chris A:

    “It would require some sort of monitoring by the ISP”

    Not really. What the ISP could do is remove the throttling for users paying the levy as to sweeten the deal. But it’s not mandatory, they can leave you on same policy as anyone else. Remember that the only purpose of the levy is to make you legit with the copyright holders so they don’t sue you.

    “Plus you’d need to get Bell, Rogers et all to actually agree that their networks can handle the load. ”

    They already handle the load, the P2P traffic is already there. Except the artists don’t get paid for it.

    Now someone would ask “if you agree with levy on internet why don’t you agree with levy on private copying”.

    Because private copying doesn’t add any new song or movie to your collection (that you already paid for).

    While P2P allows you to add new material to said collection, thus bringing in value.

    That’s the big difference.

    nap.

  21. @Naplam
    “Not really. What the ISP could do is remove the throttling for users paying the levy as to sweeten the deal. But it’s not mandatory, they can leave you on same policy as anyone else. Remember that the only purpose of the levy is to make you legit with the copyright holders so they don’t sue you.”

    The only problem with this is it leaves those of us who use P2P to download non-illegal things, like video game patches, throttled still for no real reason. That’s why you need the monitoring if you are going to do something like that because you need to be able to differentiate between them. I should not have to pay a levy just because I want un-throttled P2P traffic for reasons other than copyright infringement.

    Plus the main excuse for the low bandwidth caps in Canada is that their networks can’t handle the load, so that’s where that came from.

    As for the levy for private copying? I agree.

  22. @Chris A
    “The only problem with this is it leaves those of us who use P2P to download non-illegal things, like video game patches, throttled still for no real reason. That’s why you need the monitoring if you are going to do something like that because you need to be able to differentiate between them. I should not have to pay a levy just because I want un-throttled P2P traffic for reasons other than copyright infringement.”

    There is a problem with this though. Among other security tools I have set up, even for legit downloads, such as Linux Distros, in my installation of Vuse, I have encryption enabled and set to mandatory for both incoming and outgoing connections. This is not something most ISPs are capable of monitoring in real time and under current privacy laws it’s illegal for them to monitor encrypted traffic, even if they could.

    To achieve what you would like, under this scheme, you would have to leave your Bittorrent client completely unencrypted. Persoanlly, even for legit stuff, I would take the marginally slower protected connection over the unprotected connection any day…but I’m just paranoid.

  23. @Chris A
    …”The only problem with this is it leaves those of us who use P2P to download non-illegal things, like video game patches, throttled still for no real reason.”

    The mechanism I previously outlined handed this situation. Yes, the mechanism required that ISP become closely involved in monitoring and bandwidth management. But it turned the situation on it’s head and placed “P2P servers” (essentially big P2P storage/delivery systems) inside an ISP network. Now the ISP can monitor both client data usage and client access to specific copyrighted works. Some math and algorithms to develop appropriate billings and “copyright levies” for specific content.
    What my proposal did, was bring the ISP into the loop. Become part of a P2P distribution net within their networks. Bill by bandwidth usage combined with monitored specific content access. To do this, an ISP would need to be allowed, even encouraged, to carry such content within their network on ISP owned “P2P servers”.

    There are lots of technical details that need to be implemented to make it run smoothly for content owners and for customers. But it is all technically possible. It even seems to be socially possible, except for that segment of the industry that would be potentially eliminated.

    If there is enough interest, I could lay it all out again, along with many updates and suggestions I have received.

  24. Which is also part of the problem. Most people at this point have moved on to encrypted for various reasons.

    My problem with any levy is the assumption that you are doing wrong, even if it’s opt-in. While their proposal is interesting in that it legalizes the illegal downloading, it suffers from severe problems of how it should be actually implemented. Do ISPs still throttle people who didn’t sign up for it, or is all P2P now un-throttled? Do you try to set up monitoring to make sure that the people who are not signed up for the levy are not downloading illegally? How do you deal with them when it comes around?

    It’s an interesting idea and generally does go with the consumer expectation of what a levy is, but that doesn’t really make it feasible to actually implement.


  25. Well there’s another approach to it. ISP sets up a server with huge storage where users can upload/download files to their will.

    Those paying the levy get access to this server, those that don’t will get no access. Easy to implement as a whitelist on the server.

    So you don’t even need to use P2P. Sftp or something like that, and the connection to this server is not throttled.

    Would look pretty much like an user-maintained music store, with subscription access.

    Nap.

  26. No proponents of the levy would ever suggest that it existed to legalize illegal downloading, it is supposed to be a private copying levy only. Things that are being shared on the Internet are not being privately copied, a self-evident fact that emerges simply from the very definition of “private”.

    Nonetheless, there is a profound sense among the public that this is what the levy is for, and it’s caused (and is liable to continue to cause) a lot of problems with copyright in Canada.

    Personally, I think that the private copying privilege should simply not extend to copies of infringing content, so that people cannot use private copying as a defense when copyright infringement is actually very clearly happening.

  27. The SAC proposal is the only one that makes
    perfect sense to me. The Cons, their lobbyist
    buddies think that draconian measures within
    their bill, will eradicate piracy for good.A
    lot of people will work their way around their
    restrictions.

    In order to make sure the artists and creators get
    paid, is through some sort of levy system. Everyone
    gets their dough, then everyone is happy, right?

  28. Mark, there should be no private copying levy to begin with. Just price it in the original price at the point of sale. Having said that most people consider the price of media expensive enough already. The price if a CD (those that still buy them) should include the rights to put it on a MP3 player. Direct purchase from itunes for example do not need a shift levy because it was already sold directly to the MP3 player. The price of a DVD should include the rights to put in on your home media server and to make a backup against damage.

    P2P is a separate issue and there may be some way to monetize it, but the private copy levy is I think dead in the water. Creators should instead negotiate for better profit sharing in their contracts or better yet leverage direct to consumer models.

  29. @Mark
    …”the private copying privilege should simply not extend to copies of infringing content”

    Yet that is clearly the direction that society is heading. It was heading that way long before P2P sharing became commonplace. Witness the reasoning behind the original levy in the first place.

    Technology simply enables these changes in society, it does not create them. Just because most members were incapable of expressing that desire previously, does not mean it wasn’t there before.

    Copyright law and models must exist within the realm of society. It does not, and cannot, transcend society. Society has already “spoken” long before the advent of the internet and P2P, the trend just continues. As society changes, laws and business models are required to adapt. Sometimes the change seems radical, but it cannot be avoided.

    Like everyone else that has already has their old roles (and income) displaced by society and advancing technology, people and industries that depend on copyright must rethink and adapt and reinvent themselves. They aren’t the first, they won’t be the last. To even think they can mold or shape society to their desires is sheer fallacy. They might be able to influence governmental policy makers, but if that policy isn’t honored and respected by general society it will all be for naught. One need look no further than the Prohibition era(s) to see how society reacts when certain laws are perceived as unfair. Map those kinds of reactions into a modern digital world. We are already there, and we can see more and growing reactions all the time.

    So we, as a law abiding society including copyright holders, have to face the future and adjust. Find some channels and rules that accommodate our changed society *and* the copyright holders. Certainly we have to find a way that doesn’t involve turning a fast growing segment of society into self-perceived criminals. That path leads to anarchy. If that takes a major shift in the way we view and handle copyright issues within a lawful society, so be it. Get on with the job of rethinking copyright law and frameworks and business models from the ground up.

  30. 😉
    I wonder if the content industry even read this blog? If they do, do they just shake their heads or cringe in fear of obsolecense.

  31. john walker says:

    These collectives are not the democratically elected (and sack-able) government of Canada. They have a lot of form for self serving dishonesty – do you really want to give them a right to collect compulsory taxes so that they can continue the life of lobbying and Biz class travel to conferences?

    If there is a case for new sales/transaction taxes collection and distribution are only the business of legitimate democratic Government

  32. john walker says:

    Ps

    Purchasing things on the web is pretty easy- a sales tax on ‘recording media’ that only applied in Canada will simply shift even more retail sales to outside the domain of Canada.

  33. john walker says:

    The following is from the Review of Australian Copyright Collecting Societies conducted by Shane Simpson on behalf of the Federal Government in 1995:

    “The general attitude of WIPO to [compulsory] statutory licences is that they should be avoided wherever [voluntary] collective administration is feasible. In brief, it is considered that collective administration recognises that the individual copyright owner has the essential right to control usage – even though, for ease of administration, that individual may choose to license or assign that right to a representative organisation. When that right to control is taken away, all that one is left with is a ‘right to remuneration’, which is a quite different concept to the full rights of copyright” and, “not all rights of copyright benefit from collective administration. Many exercises of the rights are best dealt with on a one-by-one basis. The most simple indicator of this is that no group of Australian copyright owners has transferred all of their rights of copyright to a society for collective administration.”

    In reference to the argument that individual primary rights are obsolete in this modern digital age and should be replaced by compulsory statutory rights, Shane Simpson further states:
    “It is very doubtful that this response is in the interest of the general community, although it is certainly in the commercial interest of certain commercial would-be, rights-user groups.”


  34. John Walker said:
    “Purchasing things on the web is pretty easy- a sales tax on ‘recording media’ that only applied in Canada will simply shift even more retail sales to outside the domain of Canada.”

    Not if buying out-of-region movies becomes illegal, as C-32 promises to implement. Let’s be honest few people actually buy CDs anymore. So it’s the DVD and BluRay market that will be hardest hit. Both are region coded and at risk of being confiscated at the boarder as illegal contraband if imported from overseas. i.e. Not Region-1-NTSC DVD or Region-A BluRay.


  35. @IanME: “Both are region coded and at risk of being confiscated at the boarder as illegal contraband if imported from overseas. i.e. Not Region-1-NTSC DVD or Region-A BluRay.”

    Just checked my collection of European classical/opera. Good news, they are Region 0 / All Regions. So at least Decca and Deutsche Grammophon still have some common sense.

    BTW Deutsche Gramophon is offering downloads on their site. So you can buy the CDs or download the files (non-lossy compressed non DRM).

    So my question is. If I buy the files, what would “format shifting” levies be for?

    Nap.


  36. @Nap
    The Within Temptation one I recently bought, Black Symphony, came with a BluRay and a DVD. Both are set to region-free, but the DVD is in PAL format so still wouldn’t play on most player here. That’s GUN Records (A division of Sony BMG Germany). I knew this before buying though, I was primarily after the BluRay. I’ll have to check out the Deutsche Grammophon site. Thanks.

  37. Another chat with John …
    I have heard it said by some creator groups that copies have value and thus should be compensated. I can understand that reasoning, but I don’t want to make copies for simultaneous use, I just want to use what I purchased and have good value for my investment in your products.

    Now let’s apply it to a real world situation.

    I recently bought a DVD for my daughter called Tinkerbell. She just loves it and watches it often, I like it too (which is good as I have had to watch it with her a number of times). Inevitably, the DVD got scratched and now a section of the movie is not playable.

    Now the movie is only 3 months old and she has not tired or watching it, so to appease those tearing eyes I must replace it.

    I could:
    A) Buy another DVD of the movie.
    B) Reach for the backup I made.

    Option A is attractive to content creator as it will earn them more money. Option B is attractive to the consumer because it will save them money. So who should benefit from this situation? Which is fair?

    The creator could argue that if something breaks too bad, buy another one. The consumer could argue that the product is easily damaged, thus poorly designed and should include some type of warranty. Which is fair?

    Under Bill C-32 it ironically gives the right to the consumer to make that backup and then takes it away by giving that choice and control to do so to the creator. The movie has a digital lock, 99% of movies do. Is that fair? Is it logical?

    When Bill C-32 passes is the content industry going to all of a sudden stop putting digital locks on DVDs? I think not, so a ‘market solution’ is not in the cards, regardless of what Mr. Moore says.

    John, you have asked that there be more clarity in regards to educational fair dealing and feel the provision is too broad. Well, consumers also wish clarity on the use of the media they purchase and feel the provisions are too restrictive.

    You mentioned earlier that too narrow a focus on the consumer experience is not helpful, well sometimes it is. Case in point.


  38. @Crockett: “I have heard it said by some creator groups that copies have value and thus should be compensated.”

    Also being able to replace a part in your car has value. Does this mean that we need to have a levy on spare parts? Or should we have a law that makes it illegal to fix your car?

    Because when I look at $29.99 for a music CD where the physical plastic disc is $0.20, the plastic disc looks like a spare part to me.

    Nap.


  39. There’s also “value” in replacing cracked CD cases, maybe we should have a levy on those too…

    I mean, if we want to do this levy thing, lets do it thoroughly….

    Let’s look at all the parts of a CD an have levies on everything including paper and printer ink…

    Nap.


  40. “Update: The SAC writes to add the following clarifications on its proposal:
    […]
    4. our model is an OPT OUT option ”

    I am suspicious of any “opt-out” scheme.

    Nap.

  41. This still doesn’t sound any good.

    Though if they are willing to do something like this maybe they should offer a subscription service, or at least make it easier for them to start in this country. But that might actually make sense, so they can’t do that.

  42. Put a levy on everything! You will not have to pay, if you don’t want to.
    I can’t wait for levies on everything! The CPCC can’t catch me, they didn’t with the millions of CD-R’s we imported and sold levy free. CD-Rs are a fringe technology but iPods are everywhere! Please put levies on iPhones, please! Androids, BB’s – PLEASE!!! With no levy, I will be cheaper than Best Buy! The internet is amazing. We will have 1000 websites selling levy free storage devices. Woohoo! Another gold plated diamond encrusted Mercedes for me! You see, I am not a criminal if I choose not to pay the levy. We are not talking heroin here. That is the best part! How many cops are there in Canada (67,085 Statscan 2009)? How many people work at the CPCC (14?). Catch me if you can. You won’t.

  43. Corriador Chandri says:

    unimpressed/down right frightened
    I have been using gmail for a while.
    Stumbling across a travel description in the Star or Canoe news online about “tourist” type activities in Baffin Island, my curiosity was piqued and I found videos of people “base jumping” – parachuting from fixed objects- from a mountain on Baffin Island. Having sent the videos of You Tube links to several friends, I am now being sent targetted ads in gmail about skydiving opportunities.
    I have just sent them an email complaint that I find this an “unwarranted and unsolicited invasion of privacy” that they would be monitoring the content or subject headings if my emails!
    This information is obviously being sold to those companies! I did not sign up for this!