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December 14, 2016Alan Willaert - AFM Vice President from Canada
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Last month, I spoke of our renewed efforts to bring Status of the Artist legislation to Ontario. This month, it’s the CFM submission to the Committee of Banking, Trade and Commerce, part of the Senate of Canada, on the operation and practices of the Copyright Board of Canada. With Heritage opening the door to examine and revise so many aspects of the laws that affect culture—and musicians—we felt that it was best to separate our recommendations for the Copyright Board (which are procedural and regulatory in nature), and treat the 2017 s.92 Copyright review as a separate issue.
One of the major issues is the backlog of decisions, which can sometimes take years, as well as sometimes erratic rulings when setting new tariffs. I will skip many of the details of our submission, and focus on the four major recommendations.
One approach to relieve the board of the backlog of tariff certifications is to consider voluntary licensing, a regime used in countries such as Finland, France, Greece, Israel, and Mexico, which have no rate-setting procedures. In the UK, collective licensing for remuneration is voluntarily agreed upon by contract between the parties. When consensus cannot be reached, a tribunal is utilized to play a part in the process. In Holland, the tariff for performers’ rights are made by agreement with the users, and distributed to phonogram producers and performers on a 50-50 basis. Upon disagreement of share, the High Court in The Hague has exclusive jurisdiction.
We recommend that all tariff matters before the Copyright Board be subject to a prehearing mediation process, using the mediation programme and case management under the Ontario rules of Civil Procedure as a model.
An expedited process can be found in the Australian copyright law, which requires that “… proceedings shall be conducted with as little formality, and with as much expedition, as the requirements of this Act and a proper consideration of the matters before the Tribunal permit.” The UK and the US copyright tribunals provide for similar expedition in the case of simple matters.
Another avenue would be to set out specified timelines in the regulations for any matter before the board.
The CFM was among 70 music organizations that publicly opposed the Tariff 8 decision, which set royalty rates for noninteractive webcasting services in Canada. The decision also brought into focus the need for rate-setting criteria that includes consideration of existing marketplace agreements. The rate, in fact, ignored international standards that support the growth and development of the industry in world markets.
A report written by Marcel Boyer, Professor Emeritus of Economics, University of Montreal, for the C.D. Howe Institute entitled: “The Value of Copyrights in Recorded Music: Terrestrial Radio and Beyond,” concluded that the value of recorded music is approximately 2.5 times greater than the level of royalties certified by the Copyright Board. Boyer continued that the approach used by the board consistently undervalued copyrights in the context of the commercial terrestrial radio industry, and that this flawed approach has been carried over into the determinations for noninteractive webcasting tariffs.
The CFM recommends that specific criteria be used for rate setting, including recourse to comparative market value analysis under s.66.91 of the Copyright Act.
I would like to take this opportunity to encourage all members to embrace the spirit of love, compassion, and giving that is prevalent at this time of year. We sometimes take for granted how fortunate we all are, to have health, family, and relative peace in our time. I wish each of you a very Merry Christmas, and the best to you and yours for a wonderful and prosperous new year.