Debating the SAC Proposal

My posting yesterday on the SAC proposal resulted in several emails that essentially asked – if you are against DRM and against levies, what do you propose to do?  That's a fair question, though I did not think that the post was meant to bash levies but rather those that dismiss alternative proposals as distractions.  I did note that I think the SAC proposals suffer from some significant flaws.  To reiterate and expand:

  • There are always competing policy priorities.  Given the importance of broadband access for commerce, communication, culture, and education, I think that any proposal must not unduly undermine the policy goal of universal access.  I think that a $5 monthly increase would represent a sufficiently significant price increase such that it might drive some away from broadband.
  • The SAC proposal only addresses music.  I expect that others – video, software, and cultural groups – will also demand their piece of the pie. In fact, that's already happening with the proposal for ISPs to contribute 2.5 percent of profits for creating Canadian new media content.  I think that any proposal must comprehensively deal with P2P and this one does not.
  • The $5 monthly fee strikes me as absurdly high given the revenues of the music industry.  Music continues to generate significant revenues and this additional billion in revenue bears little relation to any possible revenue decreases that might be attributed to P2P (which is itself debatable).
  • I am not convinced that this model requires government intervention at this time.  These are still early days and there is the possibility that the market could adopt this model – either by a voluntary consumer fee or a negotiated ISP license for its customers – without legislative intervention.
  • There are some doubts whether the proposal is consistent with Canada's international copyright obligations.
  • There are some doubts about the fairness of the distribution of a levy. 

Notwithstanding the doubts, I am not an absolute critic of levies. 

As I also noted, I am not at all persuaded that the cross-subsidization concern (non-copiers pay too much, copiers pay too little) is fatal as we all pay tax dollars that goes toward services and programs that we do not use.  While I'm not sure I have the solution, I think the SAC proposal could be improved at a minimum by leaving basic broadband service alone.  A levy would be better suited toward the higher tier offerings from ISPs that offer more bandwidth at higher speeds since those services are frequently marketed as enabling faster file sharing and arguably correlate most closely to music copying.  This tiered approach on the levy would address the digital divide concerns, target users who are less price sensitive, and (arguably) apportion the premium revenue in a fairer manner.  This alone would not solve all the concerns, however.  I think the proposal needs to be viewed as the start of a conversation, not the final say and it was for that reason that I called out the attempt to marginalize it as a distraction.


  1. Darryl Moore says:

    Levies distort the market
    I would also argue that levies in general distort the market place and make for a far less efficient economy. Perhaps we should have put a levy on VHS tapes 25 years ago to compensate TV producers, or on automobiles 100 years ago to compensate blacksmiths.

    I think we have to acknowledge there is a fundimental change in the industry which will neccessarily mean there will be less money going to creators. Is this a bad thing? The CRIA would say so, but they are protecting their old business model.

    Was it a bad thing when new technology made it so we had to spend less money of food? We get more choice in food now too, dispite the fact that fewer people make a living from producing it.

    If we accept file sharing as a given that cannot be controlled in a free and democratic society, then there will be less money going to profession producers to be sure. But that will be offset by a huge increase in amature producers. There will still be room for income for a few professionals in licencing performances, souvenirs, embedded advertising, etc..

    We need to change our copyright laws to reflect the reality of the world we live in, (Millions of people file share and see nothing wrong with it.) then allow the market place to make that new economy efficient. The world will not end. The sky will not fall. Yes, there will be fewer professional producers, but there aren’t too many blacksmiths left either.

  2. Thr intetrviews
    There were a few interviews on the news here in Hamilton.

    The Songwriters basically are saying that the dollar amount isn’t fixed in stone, and it seemed reasonable amount. IN that the people that are eligible will get compensated fairly.

    I think the suggestion was that its very open to debate, and that a good part of the reason that it was so high, is to create the debate, and that is exactly what it is doing.

  3. lets all laugh
    Now what about the ISP who throttles and caps the account?

    in essense the ISP is the delivery mechanism and storage facility for this 5$ per month proposed levy. What cut are they going to demand?

    As is most canadians are on a throttled account which limits how much they can download.

    In addition most canadians are on a capped account which again limits how much they can download w/o paying gross amounts in over-usage.

    How does this address anything. People are still hung to dry with new limits imposed by the ISP.

    So to say this fixes everything and they can download all they want is completely false.

    If they want to charge that greedy 5$ amount then a piece should go to a book writters association, Movie association, the porn industry, and to the ISP itself for the bandwidth (delivery & storage mechanism).

    Lets no be fooled here the ISP controls exactly how much you can download w/o adding again another fee for overages.

  4. Crosbie Fitch says:

    A free market is necessarily without cop
    A free market is necessarily without copyright, and there’s nothing wrong with a free market eh?

    If you have a musician on the one hand with a great song that his ten thousand fans would gladly pay a dollar for, then why on earth do you need copyright?

    The fans simply stump up ten thousand dollars, the musician publishes the song and collects the money, the fans get a copy of the song each (and may freely copy it – not that copyright could ever stop them anyway – so abolish it).

    Why do you need a monopoly, or failing that, a tax?

    What’s wrong with a free market?

  5. Use Existing Internet Tax Revenue
    I purpose that before a new “tax” is considered how about we consider using a portion the taxes already collected by provincial and federal governments on Internet service? Minus of course the funds necessary for CRTC funding, etc.

    Adding a new fee for a specific industry is like loading a unlimited chambered gun. It will NEVER end. Every organization, group or business will be lining up forever whining for their share. Eventually the $5 fee will become the $10 fee then the $15 fee then the $20 fee and on and on and on.

    More taxes is NOT the solution. What’s required is a more honest and sensible approach by organizations like the CRIA – who’s demands seem to chance like the weather in St. John’s!

  6. The price of freedom
    Before paying $5 (which in my opinion it should be paid just to keep P2P legal no matter what kind of media is shared) there must be also content freely accessible. That is not the case since the best torrent sites were forced to shut down. If they shut down content and I have to pay a levy for that content It doesn’t make any sense. I do not use either Kazaa or eMule.

  7. Why they do not open a site, put their catalog on line, make it available by monthly subscription and then see what happens?
    If we all pay $5 in order to freely share music what is going to happen to services like iTunes and the like?
    Perhaps is this levy just to compensate artists for their “supposed” lost in revenue and sharing music will still be illegal?

  8. Agree with 12:30
    I’ve got to agree with the posting from 12:30, if they want money for it, start their own legal download site. If they own the rights, and want to make money from it, then sell it, either themselves or through a third party. If they don’t want to do that, then they can’t really complain too loudly about file sharing… after all, if they aren’t willing to sell the work, they shouldn’t expect to be paid for it. The 2006 report they cite indicates only 360 legal sites, so make it 361.

    The unfortunate bit I see on this is that the Internet is global, while laws are local. So even if we start paying the $5, if some other government shuts down access to the sites (for instance, like what happened with YouTube and Pakistan recently), then we are paying for nothing.

  9. The software industry would also ask for another $5 per month… I can\’t imagine paying something like $20 extra to the music, movie, software industries and e-book publishers!! My high-speed Internet connection is only $38 per month, and adding $20 would be like a 50% increase in cost for no added value!!

  10. If we pay 5% per month we should have full access to a made available site for unlimited free downloads.

  11. Levies are really a dumb, lazy, short-sited, wont fix anything, idea when the physical media (CDs, tapes) no longer plays a role in copying and distribution. I can get on a subway or sit in a cafeteria and exchange many songs over bluetooth, infrared, etc. (without any involvement of ISP or celluar provider). I can print out a bar-code representing a song on a roll of toilet paper and give it to a friend. Are we going to put levies on cellphones, subways, cafeterias and toilet paper?

    Why can’t I get compensated by everyone who attends schools. Schools create copies of me by training people in the same field as mine. I don’t get compensated when employer chooses one of those copies instead of paying me.

    I have a feeling that even in a state with no copyright laws creators would still create and be compensated for it. On top of fans paying their “free” music, they would find innovative ways to generate income themselves or partner with other businesses. I’ve seen people buying $2 botteled water from a machine situated next to a free drinking fountain. Consumers do pay for things they can get for free.

    I would say get with the times and if you don’t like it find another job to make a living and create on the side. That’s what I’ll have to do when my employer replaces me with a “copy”. That’s what all the blacksmiths had to do.

    You are not special so don’t make me pay just because YOU think you are.

  12. If I was a government policy person checking this blog (and they do) then I wouldn’t be very impressed by the calibre of this discussion. Basically, the mantra is we want it all, we aren’t prepared to pay, and we don’t want any DRM or other protections for artists. Frankly, guys, you are not going to get what you want. I find most of Professr Geist’s postings a lot of egotistical hot air, but he does at least recognize that extreme positions are not the likely outcome.

  13. happiness
    Why should government protect artists rather then lumberjacks or computer programmers? We live in an egoistic society indeed. Every day from any media the idea that happiness is something that you can buy is imprinted in our brain (a new iPod, a new car, the last movie or the last CD). It is all about “our” happiness and we do not give a shit about others “happiness”. We are sons of the same business model that now is crying for help. How you can convince someone now that if you download your “happiness” you will be less happy then if you buy it?

  14. A short story
    The basic thing is that nobody likes changes. It is over 10 years that people can freely download everything from internet. Now someone is saying \”things have to change\”. And people are saying to this one \”why don\’t you change instead\”. Nobody likes changes.

  15. Darryl Moore says:

    extremists are winning
    The post at 19:50 has it all wrong. Actually the extreme position has a very good chance of winning. It already is! Copyright is being extended to ridiculous terms line 95 or 150 years. People are being made criminals for removing digital locks put on their own property by third parties. Works with only the smallest iota of resemblance to other works are being sued out of the market place for perceived copyright infringement. People are being persecuted, NOT prosecuted, with hundreds of thousands of dollars in fines for sharing a half dozen songs. Students in the US are being blackmailed into thousand dollar settlements for minor copyright infringement.

    Oh no sir. The extremists are winning. And it is time we stop them! Do you really wonder why some of us have so little respect for current copyright law? Let’s put the right back into copyright!

  16. The Songwriters Association of Canada can suck it. NO ONE OWES YOU A LIVING AS A SONGWRITER! Can’t survive writing songs? Too bad, get a job at McDonald’s. There is a surplus of content creators right now. If you can’t make it, maybe you’re not good enough. So, quit your whining and get your hands off my $5.00 p/month. YOU AREN’T GETTING IT!

  17. The Songwriters Association of Canada can suck it. NO ONE OWES YOU A LIVING AS A SONGWRITER! Can’t survive writing songs? Too bad, get a job at McDonald’s. There is a surplus of content creators right now. If you can’t make it, maybe you’re not good enough. So, quit your whining and get your hands off my $5.00 p/month. YOU AREN’T GETTING IT!

  18. Not a matter of surviving writing songs, but surviving when people don’t pay for them. However, as for my point that these postings are childish and will not help your cause, I rest my case.

  19. I’d bet that the previous poster would also have to get a job at MacDonalds if people were openly allowed to steal whatever product he makes or sells. I also love people who can arbitrarily judge a “surplus of creators’ content.” How exactly does one determine that? I can see it now:

    Arbitrator: Oh yes, good sir, we have too much art.

    Songwriter: How did you determine that?

    Arbitrator: None of your concern, but frankly we determined it through the comments on a law professor’s blog. You should find something else to do. I hear Wal-Mart is hiring….

  20. For the anonymous 07:55 poster: In particular, when which people don’t pay for them? The recording artists? The music publishers? Or the general public?

    Do you get a cut of the revenues that a recording artist gets from album sales, concert tickets, etc? Of do you get a flat fee for the right to record a song? I actually would like to know, since it affects the issue.

  21. Many of the people posting here are saying that they shouldn\’t have to pay for downloads and P2P, directly or through a levy. They also say that a DCMA-type ban on circumvention is not acceptable. Then they say that somehow this is all the fault of creators and that if their business model doesn\’t work, they should get jobs flipping burgers. This is unrealistic and bordering on the immature. If the content is worth copying, it has value and the policy options for government are to find a way of directing payment to copyright owners, or introducing anti-circumvention laws, or both.

  22. Many of the people posting here are saying that they shouldn\\\’t have to pay for downloads and P2P, directly or through a levy. They also say that a DCMA-type ban on circumvention is not acceptable. Then they say that somehow this is all the fault of creators and that if their business model doesn\\\’t work, they should get jobs flipping burgers. This is unrealistic and bordering on the immature. If the content is worth copying, it has value and the policy options for government are to find a way of directing payment to copyright owners, or introducing anti-circumvention laws, or both.

  23. Darryl Moore says:

    how little is too little?
    To the post at 15:30. Just because something has value does not mean that someone is owed money for it. The public domain is full of works of great value, but no one is entitled to any payment for it. The Americans have a great thing called fair use which outlines many uses of works which are still covered by copyright for which the copyright owner is not entitled to payment.

    If we agree on this, then I think we can also agree that the term of copyright and the breadth (i.e. what costitudes a derived work without fair use exceptions) are fairly arbitrary parameters. Indeed the term of copyright as increase from an initial 7 years to as much as 150 years in some places.

    If we are still in agreement, then the debate boils down to how much and for how long copyright should protect a work. I am arguing that copyright protection is already far greater than it need be and it is time to roll it back.

    If the debate is about how much protection copyright should give, then how do you determine where the line is between what is reasonable and what is not? Clearly I may stand far away from others in my opinion, but I do have good and logical arguments for them.

    How little copyright protection is too little that it becomes ‘immature’ to argue for it? Please tell.

  24. I am involved in music and TV in my job and as a fan. I can ascertain, and so can anyone, that in terms of supply of new music hitting the market, there is a glut of supply. More now than ever before too I bet! Does every single album released deserve sustainable living earnings? Is every album released actually worthy of it? Most albums deserveably die a quick death. Same with movies (that’s why there are $2 DVD bins at Wal-Mart) and books (ever seen remaindered books on sale?). Not all art is destined to be around for long, AS IT SHOULD BE. In TV, we air programs that people can record off-air or cable/sat and skip all the commercials. Do we like it? No. We can’t really do anything about it. We look to other ways of getting by. Heck, we we even sometimes air programs before the US network does, and our version ends up on the torrent sites. There’s nothing we can do about that. It WILL happen regardless. Period. But we try other things and hope people will try them. If my comments are “immature” to you, perhaps YOU need to grow up and join me in the REAL WORLD.

  25. 2 cents please
    I wonder if Dr. Geist, as a content creator, is going to get a bit of that $5? I think he should. As a contributor to this blog, I am certainly going to ask for my 2 cents.

  26. Of course Dr. Geist gets book royalties. If he is a member of a collective, he gets money from there too

  27. About TV shows
    When you buy any product you pay the profit portion together with the production cost. Within the production cost there is also the promotion cost. That means that consumers at the end are paying for those commercials that sponsor TV shows. Furthermore consumers pay also for cable. Now if I am allow to record a TV show what is the difference in gathering that same TV show from a torrent site? There are also perfectly legit devices out there which once attached to a computer will record a show digitally on the computer’s hard disk. Finally when you are watching a show on TV you can still skip commercials (watching another channel, drink a glass of water, making popcorns, and so on). I believe that TV networks should provide downloads of their shows by their own, perhaps sponsoring that download with a short commercial you have to watch before the download starts (furthermore they could leave all the original commercials within the show, you never know).

  28. PorkBellyFutures says:

    The comparison between such a levy and taxes is flawed. Taxes are an inefficient way to pay for things, but we accept them as necessary because we believe certain services cannot be adequately provided by the private sector (transportation infrastructure, a justice system, health care, public education, licensing, etc etc). In the meantime, we develop a sophisticated tax code in an attempt to minimize the drag they cause on society and the economy.

    Arguing the levy in its unfairness is no worse than taxes in their unfairness completely ignores the fact that we accept the latter because of its necessity, while the former is not necessary at all.