Tariff 22 decision hailed as victory for both sides though uncertainty remains

A May 1 decision by the Federal Court of Appeal on ISP copyright may not be the last the industry hears on the issue as the Canadian Association of Internet Providers (CAIP) mulls a Supreme Court of Canada challenge on the issue of caching. While ISPs were ultimately deemed not liable for paying royalties on content such as music passing through their pipes (CNM Update, May 2/02), the Federal Court judges have opened the door to blanket or similar tariffs on caches operated by ISPs, which the court has determined service providers exercise control over. CAIP has until June 29 to file a challenge to the court’s ruling should it desire. Both CAIP and its opponent on the issue – the Society of Composers, Authors and Music Publishers of Canada (SOCAN) – are claiming partial victory in the case. SOCAN counsel Paul Spurgeon says that while the copyright collective is disappointed to have lost in its bid to have ISPs held liable for copyright payment, it considers the caching decision and the finding that music stored on foreign servers and communicated into Canada are subject to a tariff as key wins. "We were hopeful that we would have a leg in on the interpretation, but the law is pretty straightforward…This doesn’t get the ISP off the hook if they’re doing more than providing the means," he tells Canadian NEW MEDIA. "One thing says is we have the rights. If we decide to grant our rights for Canada to a licensee outside the country, now we can do so…We can go to a foreign collective, for example, and say for Canada that we want you to clear the rights for U.S. or British or French web sites… " has raised a lot of interesting points, there, that the Board didn’t look at. That’s important to SOCAN. I think it would be glib to say that the Internet providers won." Spurgeon notes that it’s premature to discuss the mechanics of setting royalties for either foreign servers or for domestic caches. "There’s a lot of issues here that have to be canvassed by this board and it’s going to be a long hearing because it’s complicated." Broader implications For its part, CAIP believes the decision was wrong since caching activity is generally undertaken on an automated basis, pushing oft-requested content to the edge of networks. CAIP president Jay Thomson explains that more than copyright issues are potentially raised by the decision. "It deals with a very narrow part of the activity that ISPs undertake – correct – but it may open the door for others who have concerns over other types of content to come after the ISP and place the liability on them: for example, hate propaganda or child pornography or defamation or any other types of content where we take the position that ISPs are acting only as the conduit and shouldn’t have any liability because they have no knowledge or control over that content. Well, the court has said they have control over that content, at least with respect to the caching of it," he says. "We believe that the decision is incorrect as it relates to the defining by the court that ISPs have control over caching….If this decision stands, and ISPs face the potential for some kind of payment in respect of their caching activity, they may very well be motivated to stop caching. That could have implications for the efficiency of the Internet network. That’s not something that either we, or Canadians, or the government of Canada want to have happen to the Internet in Canada." Thomson says the Supreme Court would likely hear the case despite its technical nature. "If we go that route, we’d certainly have to decide that – because it’s an expensive route – on the assumption that we’d be well-received. I think it probably would be an area where the court would find interest in exploring because, hey, it’s the Internet. It gives them an opportunity to get into this new media."

Tariff 22 decision hailed as victory for both sides though uncertainty remains

Broadcast | May 16, 2002

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