So in order to restore this balance, SODRAC has 13 specific recommendations, with new wording. You have received a copy this afternoon. We feel that these recommendations are in keeping with the government’s wishes while avoiding any unnecessary disruptions to the business relationship between creators and users.
We are really talking about a business relationship between authors and those who use their works. And who can claim responsibility for the effects of a piece of legislation on the Copyright Act? It is not up to the Internet provider, broadcasters, professors or even rights holders, it seems.
The Copyright Act protects the economic life of a work, by ensuring maximum exposure, in exchange for reasonable compensation.
When we talk about economic value, we are not talking about taxes or double payment. We are talking about payment for the value of music use by those who, in most cases, make music a major component of their business model.
But Bill C-11 in its current form interferes with this private business relationship, by creating numerous exceptions that are sometimes expressed in terms that go beyond the government's clear intentions, or that result in unintended consequences.
Let me illustrate this by focusing on two of our recommendations. The first one pertains to the new section 30.71 that deals with the so-called temporary reproductions for technological processes. The government has specified that this section has no copyright implications because it covers technical and temporary reproductions made as part of a process that is technical in itself, such as cached transmission over the Internet, or cache.
However, the wording of the section deals only with facilitating a technological process, which is so broad and vague that it could be misinterpreted as encompassing numerous digital reproductions whose value has already been established in a free market.
It is therefore necessary to clarify that those reproductions, as intended by the government, are technical and have no real value. If the use of those temporary and separate reproductions and—that is not the final solution, but the reproduction that is separate from the temporary reproduction—leads to a quantifiable benefit for the user, the exception should not apply.
In addition, the title of the section refers to a temporary reproduction, but the word “temporary” does not appear anywhere else in the wording of the section. Instead, reference is made to the duration of the technological process, which is extremely vague. The current meaning of the word “temporary” is “momentary” and “limited in time”. We therefore recommend that this notion be reflected by specifying that the reproduction is temporary or transitory.
Our second recommendation addresses the exception for ephemeral recordings. We talked about that a lot last week. Of course, SODRAC is not sure why there is a need to withdraw the requirement to obtain a license from a collecting society for this type of reproduction, when we can see that the use of all reproduction rights by commercial radio stations accounted for barely 1.4% of their annual revenues in 2009, compared to using—which is still true to this day—80% of the music in their programming. So we would prefer that subsection 30.9(6) of the current remain unchanged.
But the government still wants rights holders to be duly compensated for copies of works kept for more than 30 days. We just want to point out that it is possible today to create automated systems for recopying and destroying recordings, which would make it possible to do indirectly what the legislation prohibits from being done directly—for example, destroying the recording on the 29th day only to recopy it two days later, resetting the clock over and over again every 30 days.
Let me remind you that a recording kept for more than 30 days can barely be described as ephemeral. It is not a simple transfer. It is a multi-purpose reproduction. SODRAC has been seeing this since 1992, for over 20 years. The radio industry has not collapsed during that period, quite the contrary. Its profit margin has increased from 1% to 21% during the same period.
SODRAC recommends incorporating the proposed minor modifications to subsection 34(2) of the bill, as you can see in our brief, in order to eliminate the possibility that this provision might be bypassed contrary to the government’s intent.
I would like to thank the committee members for their attention and I encourage them to read the other proposed technical modifications in our brief that are meant to reflect more specifically the government’s intentions.