Liberal amendment bad news for radio station fight for reproduction exception

Following the release of new Liberal party amendments to copyright reform Bill C-32 Thursday, radio broadcasters could see history repeated and again lose the fight to avoid paying digital reproduction fees. “We thought they understood this issue and we’re really surprised and disappointed that they decided to take this approach,” Gabriel van Loon, a lawyer with Hayes eLaw LLP in Ottawa and a spokesman for the Canadian Association of Broadcasters (CAB), said of the Liberal proposal. “They want to help artists. We understand that and we’re sympathetic to that, but we think it’s ill-founded to target broadcasters,” van Loon said in an interview. “We’re not part of the problem. We contribute huge amounts of money to Canada’s creative industries.” The Liberals released the list of amendments as the parties of the House finished studying the Conservative government’s Bill C-32 at a legislative committee. The study will resume in January. One of the amendments said the party supports a move to “re-insert the right of ephemeral recordings.” The wording of the proposal initially confused some stakeholders, but Liberal MP and industry critic Marc Garneau confirmed in an interview that the Liberals want to reverse a Conservative government proposal to remove the obligation for radio stations to pay rights holders a reproduction royalty for transferring digital recordings. The CAB says the obligation costs the industry $21 million annually. “It’s a form of recognition for artists, and we believe it’s justified,” Garneau said. “All decisions are difficult because there’s a trade-off.” Radio stations have argued they should not have to pay for reproductions in the course of the use of digital systems. Now, the stations may be poised to lose the fight for a second time. In 1997, the then-Liberal government’s omnibus copyright reform legislation, also named C-32, contained a reproduction right exception for radio broadcasters that would have eliminated the royalty obligation. But late in the legislation process, a provision now known as 30.9(6) in the Copyright Act was added to the bill. The provision defeated the exception by qualifying it so that it does not apply if copyright collectives seek compensation for reproductions—which they inevitably did. Now, the Conservative government’s Bill C-32 proposes to remove 30.9(6) from the Copyright Act so that the original exception introduced in 1997 will stand and radio stations no longer have to compensate collective societies for reproduction rights. “There’s an exception to the exception. That’s what broadcasters have been fighting all this time,” van Loon said, noting that broadcasters have been lobbying to change the bill since 1997. “The actual exception has been there all along. It’s just never been usable due to the exception to the exception.” The CAB issued a release Thursday that said rights holders in the form of “multi-billion dollar foreign companies” are benefiting from more than 80 per cent of the reproduction tariff that Canadian radio broadcasters pay. The radio industry paid $115 million in contributions and royalties in the past year, the CAB said, adding that direct contributions to artists are five times greater than they were nine years ago. The CAB said it supports Bill C-32’s effort to close “a loophole that forced radio broadcasters to make additional payments for purely technical digital file reproductions necessary to build on-air programming.” In line with the Liberal proposal, copyright collective CMRRA/SODRAC Inc. (CSI) has been lobbying to keep 30.9(6) in the Copyright Act. David Basskin, president of the Canadian Musical Reproduction Rights Agency Ltd. (CMRRA), a partner in the CSI, said by email that the NDP and Bloc Québécois fall in line with the Liberals. That means the three opposition parties could vote against the Conservative government to make the amendment to C-32. “The Liberals’ support joins that already expressed by the NDP and Bloc Québécois,” Basskin said, adding that the royalties broadcasters pay to make copies of music are “vital to their operations” and amount to less than one per cent of radio revenues. “These royalties are vital to the economics of songwriting and music publishing. As tabled, Bill C-32 would allow broadcasters to continue to make these copies but would eliminate compensation—clearly an unfair result.” The Liberals also proposed Thursday an amendment in lieu of a levy on iPods and other digital music devices to compensate artists. The NDP and Bloc support extending the private copying levy, administered by the Canadian Private Copying Collective (CPCC), so that it covers digital devices. The Liberals instead proposed that $35 million per year be directed from the government’s general revenues to the CPCC for redistribution to artists. The party said it supports writing the policy into the Copyright Act so that it is reviewed every five years and the funds increase at the rate of inflation. The Writer’s Guild of Canada said in a release Thursday that the proposed funding for the CPCC “might be a stopgap for the music industry but does nothing for authors of movies, TV shows and more.” The Liberals also proposed limiting the education exception in the bill with a clear definition of “education”; limiting the user-generated content exception; removing “the arbitrary 1988 statute on public expositions”; introducing a “new resale right on art, similar to European laws”; and amending the strict legal protection for digital locks so that they can be circumvented for personal uses. Garneau said the precise wording of the amendments had not yet been presented to the committee. The party wanted to express support for creators, consumers and industry, he said. “We all have different groups coming to us, pushing for different things,” Garneau said. “This requires the wisdom of Solomon. There are many things in the bill we support.” The Conservative party released a radio advertising campaign Thursday criticizing what it called “the Ignatieff-led Coalition for supporting an iPod tax.” “It’s a lie. We never, ever said we would go with a levy approach,” Garneau said. “It really is pathetic.” But Garneau acknowledged that some people ask him why the Liberals are supporting the levy. He said the party is working to correct that perception. “We’ll correct it,” he said. The Conservative campaign heightens the political atmosphere as parliamentarians break for the holiday and plan to return to business in late January—in what is expected to be a climate of election speculation and political standoffs. Industry Minister Tony Clement issued a statement Thursday that said, “One of the things I’m truly grateful for this Christmas is that, thanks to the efforts of our Harper Government, Canadian families won’t have a 75-dollar iPod Tax under their trees this season.” sdoyle@thewirereport.ca

Liberal amendment bad news for radio station fight for reproduction exception

Broadcast | December 16, 2010

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