Broken record by Tomi Tirkkonen (CC BY-NC-SA 2.0) https://flic.kr/p/9GZZxM

Broken record by Tomi Tirkkonen (CC BY-NC-SA 2.0) https://flic.kr/p/9GZZxM

Columns

Broken Record: Why the Music Industry’s Secret Plan for iPhone Taxes, Internet Tracking and Content Blocking is Off-Key

The long-awaited Canadian copyright review is set to kick off hearings next week as a House of Commons committee embarks on a year-long process that will hear from a wide range of stakeholders. My Globe and Mail op-ed notes that according to documents obtained under the Access to Information Act, however, one stakeholder – the Canadian Music Policy Coalition, an umbrella group representing 17 music associations – got an early start on the review process last fall by quietly submitting a 30-page reform proposal to government officials.

The proposal, titled “Sounding Like a Broken Record: Principled Copyright Recommendations from the Music Industry”, calls for radical changes that would spark significant new consumer fees and Internet regulation. The plan features new levies on smartphones and tablets, Internet service provider tracking of subscribers and content blocking, longer copyright terms, and even the industry’s ability to cancel commercial agreements with Internet companies if the benefits from the deal become “disproportionate.”

The coalition, which includes the Canadian Council of Music Industry Associations, the Canadian Music Publishers Association, and copyright collectives such as SOCAN, asks the government to follow three main principles as part of its reform process: real-world applicability, forward-thinking rights, and consistent rules.

But the coalition proposal largely avoids discussing the current state of the industry, perhaps with the intent of leaving some with the impression that file sharing remains a significant problem. The reality is the music industry in Canada, led by the massive growth of authorized music streaming services, has enjoyed a remarkable string of successes since the last time copyright law was overhauled in 2012.

The Canadian music market is growing much faster than the world average, with Canada jumping past Australia last year to become the sixth largest music market in the world. Music collective SOCAN, a coalition member, has seen Internet streaming revenues balloon from $3.4 million in 2013 to a record-setting $49.3 million in 2017.

Moreover, data confirms that music piracy has diminished dramatically in Canada. Music Canada reports that Canada is below global averages for “stream ripping”, the process of downloading streamed versions of songs from services such as YouTube. Last month Sandvine reported that file sharing technology BitTorrent is responsible for only 1.6 per cent of Canadian Internet traffic, down from as much as 15 per cent in 2014.

Yet despite the success of Internet streaming services and the marginalization of file sharing activity, the coalition has crafted a reform proposal that would be more at home in 2008 than in 2018. For example, the industry is now calling for new fees to be set by the Copyright Board on all smartphones and tablets to compensate for personal copying. The revival of the so-called “iPod tax” would today go far further than just digital music players, as the coalition is asking the government to amend the Copyright Act to allow for fees to be imposed on all devices.

Canadian Music Policy Coalition, pg. 15

The coalition also calls for an extension in the term of copyright beyond the global standard of life of the author plus an additional 50 years, claiming an extension of an additional 20 years would benefit Canada in international trade. The Canadian government recently adopted the opposite position, rejecting term extension in the Trans Pacific Partnership agreement.

Virtually all music users are targeted – the coalition wants more money from radio stations by eliminating a reduction in royalty payments for the first $1.25 million in advertising revenue and to narrow an exception for charities – but it saves its most far-reaching proposals for the Internet. The coalition envisions Internet providers assuming the role of digital police with respect to their subscribers, stating “we need ISPs to play a bigger role, for example, by implementing content recognition technologies that would track usage and, if need be, block unauthorized commercial uses.”

Coalition members did not play a significant part in the FairPlay Coalition effort, launched in January, to create a mandated website blocking system at the CRTC, but it appears that the music industry envisions much the same thing within the Copyright Act. While FairPlay website blocking advocates insisted that it would only apply in limited circumstances, the music industry was secretly seeking to create a blocking system of its own.

In fact, the coalition would go even further by requiring ISPs to “provide feedback to the intellectual property community, the extent of which should inform stakeholders of the use of the licensed assets.” In other words, the industry envisions ISPs blocking content, monitoring subscriber activity, and reporting its findings to the industry.

Canadian Music Policy Coalition, pg. 27

If that isn’t enough to worry the Internet community, the coalition would also like the government to create a mechanism requiring Internet services to renegotiate licensing agreements where ISPs derive “disproportionate” revenues and benefits. While it is not clear how this would be determined nor how the government could mandate the re-opening of private commercial agreements, the desire to change market terms are ironic given the industry’s insistence on Copyright Board reform to provide greater market certainty. As for who will shoulder all these new costs, the coalition calls for new regulations on ISP billing, seeking assurances that none of these additional expenses will be passed on to subscribers.

Canadian Music Policy Coalition, pg. 27

Innovation, Science and Economic Development Minister Navdeep Bains and Canadian Heritage Minister Mélanie Joly launched the copyright review late last year with a warning to the Standing Committee on Industry, Science, and Technology that efforts to use legal tools to impede changing dynamics in the marketplace may ultimately harm the very stakeholders the law is intended to assist. Given the demands for new smartphone fees, Internet blocking and monitoring, as well as interference with commercial agreements, the ministers might want to send a similar message to the music industry.

7 Comments

  1. Devil's Advocate says:

    “The coalition… asks the government to follow three main principles… real-world applicability, forward-thinking rights…”

    Yet, they want stuff like this…

    “…new levies on smartphones and tablets, Internet service provider tracking of subscribers and content blocking, longer copyright terms…”

    Small wonder these dinosaurs become less relevant as time goes on.

  2. What is this “internet community” you mention? This should say “general public”.

  3. Pingback: Music Industry Pushed for Internet Censorship in Canada

  4. College students, all of those early mornings could pay off.

  5. Pingback: Canadian Music Industry Seeks New Fees, Content Blocking, and Right to Renegotiate Deals Despite Generating Record Digital Revenues - Michael Geist

  6. Pingback: Who Needs an iPhone Tax: Canadian Music Industry Instead Calls for $40 Million Handout - Michael Geist

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