Digital Copyright Canada

This is a summary of Tariff 22 I drafted for a presentation. Use it 
as you will.

There are three primary documents: 1) the tariff proposal from the 
Society of Composer, Authors and Music Publishers (SOCAN); 2) the 
Tariff 22 decision from the Copyright Board (two phases); and, 3) the 
appeal by SOCAN to the Fed. Ct. of Appeal, which is due any day (and 
has been for months).

What is a Tariff?
---------------
SOCAN proposes all kinds of tariffs to the Copyright Board for the 
performance or communication to the public of music. Other copyright 
collectives do the same for other rights. SOCAN's Tariff 1 is for 
music played on the radio, Tariff 2 is television, Tariff 3 is for 
cabarets, cocktail lounges, bars, etc. and so on. Tariff 22 is for 
music performed or communicated to the public via the Internet. SOCAN 
has been proposing this tariff for many years and continues to do so. 
A link to the latest proposal can be found at the bottom of this 
document.

The Copyright Board's decision on Tariff 22 is in two parts, Phase I 
and Phase II. Phase I was handed down in October 1999, and determines 
which actions trigger liability under section 3(1)(f) of the 
Copyright Act and which do not. SOCAN didn't like this decision much 
and appealed. The Federal Court of Appeal granted leave to appeal in 
July, 2001, but has not yet handed down a decision. The Copyright 
Board has not yet handed down Phase II and likely will not before the 
decision from the Fed. Ct. of Appeal on Phase I. However, when it 
does, Phase II will address the policy issues raised by the proposal, 
including the most appropriate tariff structure. Within the 
discussion of that structure, issues will be debated pertaining to 
the most appropriate target and whether blanket licensing is the most 
appropriate form of licence in the relevant market.

What does SOCAN want?
----------------------
SOCAN argued that a communication to the public occurs when the end 
user can access a musical work from a computer connected to a 
network. It also maintains that virtually everyone involved in the 
Internet transmission chain is liable for the communication, 
including those who provide transmission services, operate equipment 
or software used for transmissions, provide connectivity, provide 
hosting services or post content. SOCAN adds that no one is entitled 
to rely on the "common carrier" exemption in 2.4(1)(b) of the 
Copyright Act.

What do some of the other stakeholders want?
-----------------------------------------
Those who oppose Tariff 22 (Canadian Association of Internet 
Providers, Canadian Association of Broadcasters, etc.) contended that 
Internet transmissions involve a reproduction of data, not a 
communication by telecommunication and that such transmissions are 
not simultaneous and occur on an on-demand basis; therefore, they 
argue they are not communications to the public. They further argue 
that what is communicated is not a musical work but packets of 
compressed data which, in any event, do not represent a substantial 
part of the work. Finally, even if there are communications to the 
public of musical works over the Internet, liability should not be 
imposed on Internet Service Providers (ISP) or other entities acting 
as intermediaries, who are entitled to rely on the "common carrier" 
exemption.

The Canadian Association of Broadcasters (CAB) took the position that 
even if Internet transmissions trigger copyright liability, its 
members should not bear it either because they do not provide a 
telecommunications service or because they are already licensed to 
undertake such communications.

What does Tariff 22 say?
-----------------------
Any communication of a work occurs because a person has taken all the 
required steps to make the work available for communication. The fact 
that this is achieved at the request of the recipient or through an 
agent neither adds to, nor detracts from the fact that the content 
provider (the poster) effects the communication.

A person whose only act is to provide the means of communication, 
does not communicate that work to the public. Liability must be 
assessed as a function of the role the entity plays in that 
transmission, and not as a function of what it generally does over 
the Internet

To occur in Canada, a communication must originate from a server 
located in Canada on which content has been posted. The place of 
origin of the request, the location of the person posting the content 
and the location of the original web site are irrelevant. As a 
result, the right to authorize must be obtained from the person 
administering the right in Canada only when the information is posted 
on a Canadian server, and the right to communicate must be obtained 
from that same person only when the transmission originates from a 
server located in Canada.

On what grounds did SOCAN appeal?
--------------------------------
SOCAN appealed the Phase I decision because it was unhappy with two 
issues: 1) the "common carrier" exemption; and, 2) the finding that 
"communications occur at the site of the server from which the work 
is transmitted, without regard to the origin of the request or the 
location of the original web site. The latter restricts the scope of 
the tariff to content residing in Canada and since most potentially 
infringing content is located outside Canada, this will cost SOCAN 
most of their anticipated royalties under the tariff.

Other resources
--------------
Tariff 22 proposal (SOCAN) 
http://www.cb-cda.gc.ca/tariffs/proposed/m12012002-b.pdf
Tariff 22 Phase I decision (Copyright Board) 
http://www.cb-cda.gc.ca/decisions/m27101999-b.pdf
Articles on the decision and appeal (Decima) http://www.decima.ca 
Decima's Canadian New Media has published several good pieces on the 
process as it's unfolded. I know Jeff Leiper is on this forum and 
perhaps he'll be kind enough to post some of them. In particular:
"Landmark decision first in Canada to tackle copyright and Internet" 
Canadian New Media 2:16 (9 November 1999), online: Decima Publishing 
<http://www.decima.ca/publishing> (last modified: 9 November 1999).
"Federal court considers wading into complex issue of copyright and 
the Internet" Canadian New Media 3:3 (20 April 2000), online: Decima 
Publishing <http://www.decima.ca/publishing> (last modified: 20 April 
2000).
-- 
Jason Young
jyoung@lexinformatica.org
613.531.3442
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Digital Copyright Canada

Tariff 22 summary

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