Telecom coalition asks government to wade into proposed memory card levy

A coalition of technology and telecom companies sent a letter to the federal cabinet last week seeking a regulatory exemption for a possible copyright tariff on the memory cards used in smartphones. The Canadian Private Copying Collective (CPCC), a copyright collective responsible for collecting and distributing private copying levies, filed an application with the Copyright Board last year for a levy on microSD memory cards to compensate rights holders for the music stored on them. The removable memory cards can be used in smartphones, digital cameras, and other devices to store data, music, and content. The coalition, made up of 17 groups and companies including SaskTel, Telus Communications Co., and Research in Motion Ltd., sent a letter to Heritage Minister James Moore and Industry Minister Christian Paradis on Feb. 9, saying the CPCC's narrow application for a music levy on microSD cards would apply to technology “overwhelmingly used to store photos in digital cameras, video recorders, and smartphones.” The coalition asked the government to implement a cabinet regulation to exempt memory cards from the definition of “audio recording medium” in the Copyright Act, which would remove the Copyright Board's authority approve a levy on the cards. The CPCC is seeking a levy of up to $3 per microSD cards equipped with 8 GB of memory or more. A statement of proposed levies on the Copyright Board website shows the CPCC has proposed a levy of 50 cents on a microSD memory card with a gigabyte of memory or less, $1 for a memory card with more than 1GB of memory but less than 8 GB, and $3 per card for those with 8 GB or more. The CPCC said in a release last December that it is seeking the levy because research “shows that as with the previous shift from cassette tapes to CD-Rs, technology is changing and Canadians are now using microSD memory cards to copy music.” Part VIII of the Copyright Act allows the copying of music for private use onto blank audio recording media, such as CDs and tapes. The act also permits the establishment of levies on blank media to compensate music rights holders. Those levies are collected and administered by the CPCC, which is now seeking to extend the levy to memory cards. Keith McIntosh, senior director of policy and regulatory affairs at the Canadian Wireless Telecommunications Association (CWTA), which signed the letter, said in an interview that the coalition's proposal is consistent with the Conservative government's opposition to a so-called “iPod tax.” He said the coalition is not seeking an amendment to the Copyright Act because it's not necessary to open up a debate about the private copying levy at the legislative committee that will study Bill C-11, the government's omnibus copyright legislation. During committee hearings in 2010 on former copyright reform Bill C-32, which did not pass due to an election, the NDP and Bloc Québécois proposed extending the levy to digital media players to compensate music rights holders. The Conservatives responded with a political attack ad branding the proposal as an “iPod tax.” The coalition letter said microSD cards are primarily used to store photos, videos, and data in smartphones, digital cameras, and camcorders. “An arbitrary and indiscriminate tax on microSD cards or other electronic media would raise the price of entire classes of electronic products that will never be used to store or play music,” the letter said. It added that extending the levy to smartphone memory cards may encourage illegitimate music downloaders to “reason that they are already paying for the music through the levy, so music piracy is acceptable.” David Basskin, president of copyright collective CMRRA/SODRAC Inc. and a board member and spokesman for the CPCC, said in an interview that the application is before the Copyright Board and it would not be appropriate for government to now “pull the rug out from under their feet” before evidence is presented at a board hearing. “It's manifestly unfair. We have a solid case to make, and we look forward to making it,” he said. “The matter is, as you might say, 'before the courts.' The Copyright Board has the power of a court.” A Copyright Board hearing on the CPCC's proposed tariffs, including a levy on microSD cards, is scheduled to start Oct. 9, 2012. The letter was signed by officials from ZTE Canada, Nokia Products Ltd., Microsoft Canada Inc., Panasonic Canada Inc., LG Electronics Canada Inc., the Information Technology Association of Canada, Intel Corp., and others. The Retail Council of Canada, which last year urged the Conservative government to scrap the private copying mechanism in the Copyright Act, also signed the letter to the ministers. sdoyle@thewirereport.ca

Telecom coalition asks government to wade into proposed memory card levy

Broadcast | February 16, 2012

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