Environics Research on Private Copying Levy

I have located the study quoted by Mrs. Lavallée yesterday in the House of Commons that claimed 79% of Canadians who copy would be fine with a $40 levy on 30GB or higher MP3 players. You can find it here on the CPCC's web site.


First, the study was funded by the Canadian Private Copying Collective (CPCC) so take it with a grain of salt.


Second, this same study also claims that:

Among those people who have made copies of pre-recorded music, a slim majority (54%) feel that individuals should be free to make private copies without paying any money to the creators of the music.

I would posit that what most people consider to be 'copying' would not be the same as the legal interpretation. If you say 'copying' in the context of media these days, most people think of file sharing, or perhaps the copying of someone else's content. Few people would equate 'copying' with 'listening to music on my iPod', when they are in fact the same.


There was also no attempt to dig into this seemingly blatant contradiction within the study's own findings. Once you consider that this study is already getting a bit dated, I would conclude that this study should not merit much consideration in the formulation of any serious public policy or legislation.

Private Copying Levy Debate Heats Up

On Thursday, Michael Geist appeared before the Heritage Committee to testify on a range of digital issues, including the motion and private bill to extend the private copying levy to "audio recording devices". This spurred quite an interesting debate in the HoC on the topic on Friday.
Mrs. Lavallée of the Bloc Québecois claimed:

Unlike what the Minister of Canadian Heritage and Official Languages claims, this has nothing to do with BlackBerrys, laptops or iPhones. The minister is using scare tactics. We are talking about MP3 players, and the most well-known brand is the iPod.

The bill proposes to extend the levy to include audio recording devices, extending the levy already placed on audio recording media. To determine whether any particular medium qualifies for the levy, the Copyright Board must determine if the medium is "ordinarily used by individual consumers for copying sound recordings". It does not matter if the medium is chiefly, mainly, or typically used for that purpose; it only matters if the use is considered "ordinary".


My BlackBerry comes with a set of earbuds that includes a microphone and a button for pausing the current song to answer a phone call. There are dedicated play/pause and skip track buttons on the top. The menu allows me to navigate and play all my videos and songs directly on the device.


It doesn't matter that the main purpose of the BlackBerry is to answer phone calls, check email, or surf the web. It is "ordinarily used" to listen to music that I have to copy on there from somewhere else. The levy or "iTax" would clearly apply. Mr. del Mastro is correct to claim that this bill seeks to separate MP3 players from BlackBerries, while these and other devices continue to converge in the real world. It's yesterday's battle, tomorrow!
Mrs. Lavallée went on:

A nation-wide poll conducted in June 2006 by Environics Research Group confirmed that ... 79% of Canadians who make private copies stated that a $40 levy on iPods—which is a lot—or other 30GB digital audio recorder would be fair and reasonable. We should remember that a 30GB iPod costs several hundred dollars and that a $40 levy on an iPod has never been considered. What had been suggested previously was an amount between $2 and $25.

I have a really hard time believing that many people would think a $40 iTax would be appropriate. I would really like to see who the sample population was in that study. Something tells me that "Canadians who make private copies" doesn't quite define the group properly.


Also, her credibility is severely impaired by claiming that $40 has never been considered. In fact, in 2007 the Copyright Board's proposed tariff on audio recording devices was as high as $75 for a device with more than 30GB of memory. It may not have been approved, but it was certainly "considered" enough to be included in the official proposed tariff by the government's own Copyright Board.


-- UPDATE: A 32GB microSD card, used by many MP3/Media players for storage (and so = a "audio recording device"), can be bought off the shelf for $87.77 at my local PCCyber. Alert the presses! "Several hundred dollars" has been redefined to mean "less than one hundred dollars". Also, the amount of the levy does not vary with the retail price of the medium. This approach has been explicitly ruled out by the Copyright Board. So, as that $87.77 chip trends down to $20, that $40-$75 levy will stay quite constant.


Need proof? The levy on CDs has remained unchanged at about $0.29 per disc, even as the retail price per disc has trended down to as low as $0.24 per disc - LOWER than the tariff alone!

City of Ottawa is going Open Access

Great news for Ottawa Open Access fans! Thanks to an update from my Councillor's office, I was directed to a report tabled with the Information Technology Sub-Committee for the City of Ottawa, concerning the City's plans to open up their data. An excerpt:

While the City does not yet have a formal policy on Open Data, it has been taking steps to align with the global trend.

In December 2009, Corporate Communications and Information Technology Services partnered to conduct a consultation with members of the public who have experience with the Open Data movement at other levels of government, as well as parties with an interest in the topic.  This session validated the direction the City wishes to take and was a first step to engaging the public in the definition of a way forward for Open Data in Ottawa.

Consultations are also planned with a view to raising awareness of Open Data within the organisation, introducing the notion of information governance, and identifying potential data sets for posting on the City’s Open Data website.

Communications and ITS have been working together to develop a beta release of a City of Ottawa Open Data website in 2010.  The site will serve as a tangible first step in the creation of infrastructure to enable the release of further data to the citizenry.

Finally, the review of the City’s Data Dissemination Policy is currently underway.  A report will be tabled at CSEDC on April 06, 2010 and subsequently Council on April 14, 2010 that will recommend changes that enable Open Data.

This process was begun by City Council in August 2008, in a directive to review the City's Data Dissemination Policy. While they will win no awards for speed (even among municipal governments), at least the direction seems positive. I will be anxiously looking forward to the report to the Corporate Services and Economic Development Committee (CSEDC) on 6 April.


More to come!

Bill C-499 and the Private Copying Tariff

I have a confession to make. I support Bill C-499, the private member's bill introduced by Charlie Angus to extend Canada's private copying tariff to include iPods and other music-playing devices. But not for the reasons that you may think.


According to the Copyright Act, private copying of music to an audio recording medium does not violate copyright.  In return, the government established a tariff on blank media that is included in the price we pay at the store. The tariff is currently $0.29 per blank CD-R, and does not currently apply to DVDs or iPods. The last time this tariff applied to iPods (before it was invalidated), it was set to $25 per device (over 20GB, which they all are by now). The last proposed tariff for iPods was up to $75 per device.


The whole premise of the levy is flawed.  It doesn't cover the dominant form of copying, downloading, while at the same time considering piracy rates in its deliberations over levy rates. It only covers music, while video and e-books are rising in popularity. It is payable by both consumers and businesses, regardless of the purpose.


Most importantly, its sole purpose is to compensate artists for an activity that most people believe should not require compensation in the first place. I'm sorry, CPCC, but if I want to rip my CD to my iPod or backup my music to my hard drive, artists don't deserve another penny, and you won't find many people who would believe they do.


So why do I support the bill? If it were to pass, and consumers faced the increased prices and reduced choices in consumer devices (MP3 players, smartphones, home entertainment, ...) resulting from the tariff distorting the market, there can be only one result. The government will face irresistible pressure from consumers, electronics retailers, and content providers to repeal the tariff, which is the only outcome that makes any sense.


EDIT: Russell has a good post on the topic, well worth reading

CRTC: Navigating Convergence Part 2

Continuing from my prior post on the CRTC's recent "Navigating Convergence" report, I'd like to move on to a subtle, but particularly troubling aspect of this report: language.


While this report attempts to paint an objective picture of the current state of the broadcasting and content market in Canada, the language used in the report provide an insight into the underlying beliefs driving the Commission's understanding of the situation. While reading the report, I was struck a number of times by a choice of words that implied a positive or negative effect, without any attempt at examining the underlying assumptions.


Some practical examples:

While subscriber growth has slowed, the growth in data revenue has remained strong. ARPU grew from $49 per month for wireless services in 2004 to $60 per month in 2008. Analysts credit much of the growth to increases in data usage for such services as e-mail, text, web surfing and, increasingly, the delivery of audio and audio-visual content. [emphasis added]

Growth, strong, grew, credit, growth - all positive connotations. And yet, we're ultimately talking about rising prices. (ARPU = Average Revenue Per User)

While the threat of competition has a disciplining effect on incumbent behaviour, the reality of non-facilities-based competition is such that for the majority of consumers, alternatives are not considered compelling.

Non-facilities-based competition has been implemented with far greater success outside of Canada, as Benkler and others have recently shown. With a single sentence, this report dismisses all such options as impractical.

It should be noted, however, that the broadcast distributors have foreseen the threat and are planning to leverage the Internet as an alternative way to distribute programming content; for example, in November 2009, Rogers Communications Inc. launched a broadband television portal where subscribers can access broadcast content online regardless of who their Internet provider is.

That's quite an optimistic claim for a completely unproven model from a company not known for its focus on customer needs. I haven't met a customer yet who appreciated their recent "upgrade" to their PVR guides, and this will be significantly more difficult to get right.

However, over time the content made available by unregulated sources and from outside of Canada may have the effect of depriving the regulated broadcasters of some of the advertising and subscription revenues that are the basis of many of the contributions listed above, including Canadian exhibition and expenditure rules.

 The word `depriving` is particularly interesting here. It actually appears twice in this paragraph, and gives a clear impression that these new sources of content are somehow less deserving of these revenues. There is no doubt that this migration of revenue would affect the Commission`s programs for encouraging the production of Canadian content, but there is no examination of alternative models of encouraging such production. Even worse, there is no attempt to look at new potential opportunities for CanCon outside the existing, traditional distribution channels.


I reacted strongly to language such as this throughout the report. Even if such wording or implications were unintentional, I believe they are still quite telling.

CRTC: Navigating Convergence

I've been meaning to read the CRTC's February 2010 report on "Navigating Convergence" for a few weeks now. This weekend I found the time to get through it all. At the end of it, I was left with a profound feeling that the CRTC simply, fundamentally, doesn't get it.


Let me begin with the CRTC's mandate:

"The CRTC’s mandate is to ensure that both the broadcasting and telecommunications systems serve the Canadian public. The CRTC uses the objectives in the Broadcasting Act and the Telecommunications Act to guide its policy decisions."

There is simply too much to discuss for a single post, so I will focus on one specific area: the intrinsically inward focus of this report on the domestic Canadian market.


Traditionally, the broadcasting of content has been both geographically and spectrally limited. TV and radio towers can only broadcast their content a limited distance, and satellites and cable only have so much usable spectrum. To ensure that the Canadian market is not saturated with American content, restrictions exist on both foreign ownership of broadcasters, and the amount of non-Canadian content that could be broadcast. In effect, the government is trying to ensure there will always be space on the broadcasting "bookshelf" for Canadian content.


The Internet changes everything. The "bookshelf" is practically infinite. Not only is it unnecessary to reserve space on the bookshelf for Canadian content, it's impossible without Chinese-style control.


This report cites competitive threats from unregulated sources of content as a significant threat to established funding models for Canadian content. The implication is that, absent protections from these 'threats', there would be no incentives for producing Canadian content.

"Content from unregulated non-professional sources and professional content from outside of Canada are increasingly available to Canadian consumers via the Internet in addition to traditional media. [...] the content made available by unregulated sources and from outside of Canada may have the effect of depriving the regulated broadcasters of some of the advertising and subscription revenues that are the basis of many of the contributions listed above, including Canadian exhibition and expenditure rules. [...] A migration of revenues out of regulated distributors and toward alternative systems could have the effect of reducing funding available from contribution regimes for content production and community television channels. Any reduction in that funding could have the consequence of making Canadian programming more expensive to acquire."

However, despite the focus on threats to existing sources of funding for the production of CanCon, there is no examination whatsoever on the potential opportunities that the Internet provides with respect to the distribution of CanCon around the world. Instead of worrying so much about Canadians choosing to look elsewhere around the world for their content, why aren't we even thinking about the opportunities to spread CanCon around the world?


I think this quote aptly sums up the general feeling throughout the report:

A Canadian capacity to reflect Canadian cultural values must be protected in the digital age.

Why such focus on protection, but none on genuine encouragement?

About this blog

I find myself reading and following a number of issues, particularly those around telecom policy, open access, and copyright. I have long been tempted to publish my thoughts, in an attempt to further discussion with other like-minded people.

I am excited about the transformation our society is undergoing with the rise of the Internet. The business models that will support the creation of new content are unclear, and in a constant state of flux. We will doubtlessly see many failures, and hopefully some successes. Whatever the outcome, I am sure of one thing: the future of content will look nothing like it does today.

This blog will serve as a vehicle for the productive exchange of ideas. Let's try to keep things civil; it is sometimes too easy to forget that a human being sits at the other side of the keyboard.