Why the Canadian music industry’s secret copyright protection plan is off key

[Len]

The long-awaited Canadian copyright review is set to kick off hearings next week as a House of Commons committee embarks on a year-long process that will hear from a wide range of stakeholders. According to documents obtained under the Access to Information Act, however, one stakeholder – the Canadian Music Policy Coalition, an umbrella group representing 17 music associations – got an early start on the review process last fall by quietly submitting a 30-page reform proposal to government officials.

The proposal, titled Sounding Like a Broken Record: Principled Copyright Recommendations from the Music Industry, calls for radical changes that would spark significant new consumer fees and internet regulation. The plan features new levies on smartphones and tablets, internet service provider tracking of subscribers and content blocking, longer copyright terms, and even the industry’s ability to cancel commercial agreements with internet companies if the benefits from the deal become “disproportionate.”

The coalition, which includes the Canadian Council of Music Industry Associations, the Canadian Music Publishers Association, and copyright collectives such as SOCAN, asks the government to follow three main principles as part of its reform process: real-world applicability, forward-thinking rights and consistent rules.

“Despite the vast popularity of Canadian music – both inside and outside of Canada – the musical works created and performed by our songwriters, composers, artists and music entrepreneurs are not protected to the same extent as other jurisdictions, are unjustifiably used to subsidize successful industries, and do not generate the appropriate remuneration that musicians deserve,” the coalition, which lists neither a website nor a spokesperson, states in the document.

But the proposal largely avoids discussing the current state of the industry, perhaps with the intent of leaving some with the impression that widespread file-sharing remains a significant problem. The reality is that the music industry in Canada, led by the massive growth of authorized music-streaming services, has enjoyed a remarkable string of successes since the last time copyright law was overhauled, in 2012.

The Canadian music market is growing much faster than the world average, with Canada jumping past Australia last year to become the sixth-largest music market in the world. Music collective SOCAN, a coalition member, has seen internet-streaming revenues balloon from $3.4-million in 2013 to a record-setting $49.3-million in 2017.

Moreover, data confirm that music piracy has diminished dramatically in Canada. Music Canada reports that Canada is below global averages for “stream ripping,” the process of downloading streamed versions of songs from services such as YouTube. Last month, Sandvine reported that file-sharing technology BitTorrent is responsible for only 1.6 per cent of Canadian internet traffic, down from as much as 15 per cent in 2014.

Despite the success of internet-streaming services and the marginalization of file-sharing activity, the coalition has crafted a reform proposal that would be more at home in 2008 than in 2018. For example, the industry is now calling for new fees to be set by the Copyright Board on all smartphones and tablets to compensate for personal copying. The revival of the so-called “iPod tax” would today go far further than just digital music players, as the coalition is asking the government to amend the Copyright Act to allow for fees to be imposed on all devices.

Since 2010, the Copyright Act has imposed a levy on manufacturers and importers of blank CDs, which the proposal notes are becoming obsolete. “With minimal revisions to the Copyright Act, the private copying regime would be restored to what it was originally intended to be,” the coalition says in the proposal. “A flexible, technologically neutral system that monetizes private copying that cannot be controlled by rights holders.”

The coalition also calls for an extension in the term of copyright beyond the global standard of life of the author plus an additional 50 years, claiming an extension of an additional 20 years would benefit Canada in international trade. The Canadian government recently adopted the opposite position, rejecting term extension in the Trans Pacific Partnership agreement.

Virtually all music users are targeted – the coalition wants more money from radio stations by eliminating a reduction in royalty payments for the first $1.25-million in advertising revenue and to narrow an exception for charities – but it saves its most far-reaching proposals for the internet. The coalition envisions internet providers assuming the role of digital police with respect to their subscribers, stating “we need ISPs to play a bigger role, for example, by implementing content recognition technologies that would track usage and, if need be, block unauthorized commercial uses.”

Coalition members did not play a significant part in the FairPlay Coalition effort, launched in January, to create a mandated website blocking system at the CRTC, but it appears that the music industry envisions much the same thing within the Copyright Act. While FairPlay website-blocking advocates insisted that it would only apply in limited circumstances, the music industry was secretly seeking to create a blocking system of its own.

In fact, the coalition would go even further by requiring ISPs to “provide feedback to the intellectual property community, the extent of which should inform stakeholders of the use of the licensed assets.” In other words, the industry envisions ISPs blocking content, monitoring subscriber activity and reporting its findings to the industry.

If that isn’t enough to worry the internet community, the coalition would also like the government to create a mechanism requiring internet services to renegotiate licensing agreements where ISPs derive “disproportionate” revenues and benefits. While it is not clear how this would be determined nor how the government could mandate the re-opening of private commercial agreements, the desire to change market terms are ironic given the industry’s insistence on Copyright Board reform to provide greater market certainty. As for who will shoulder all these new costs, the coalition calls for new regulations on ISP billing, seeking assurances that none of these additional expenses will be passed on to subscribers.

Innovation, Science and Economic Development Minister Navdeep Bains and Canadian Heritage Minister Mélanie Joly launched the copyright review late last year with a warning to the Standing Committee on Industry, Science and Technology Committee that efforts to use legal tools to impede changing dynamics in the marketplace may ultimately harm the very stakeholders the law is intended to assist. Given the demands for new smartphone fees, internet blocking and monitoring, as well as interference with commercial agreements, the ministers may want to send a similar message to the music industry.