Thank you very much, Mr. Chairman.
Good afternoon, members of the committee.
My name is Jay Kerr-Wilson. I'm a partner with Fasken Martineau and am appearing today on behalf of the Business Coalition for Balanced Copyright, or BCBC.
The members of BCBC include Bell Canada, Rogers, Shaw, Telus, Cogeco, Vidéotron and the Canadian Communication Systems Alliance. BCBC's members support a copyright regime that rewards and protects creators, facilitates access to creative content, encourages investment in technology and supports education and research.
The exceptions that were added to the Copyright Act in 2012 were necessary to eliminate uncertainty that would restrict or inhibit the development of innovative new products and services. Reducing or eliminating these exceptions will put at risk hundreds of millions of dollars in investments. It will cause disruptions in the rollout of legitimate new services that would otherwise provide copyright owners more opportunity to earn revenue by giving Canadians more access to more content.
The coalition does not believe that new copyright levies should be imposed on ISPs or other intermediaries in an attempt to create new sources of revenue for Canadian creators and artists.
First, requiring ISPs to make content-specific payments is a clear violation of the principle of network neutrality.
Second, and more important, the Copyright Act is not the appropriate statute for promoting Canadian cultural industries. Canada's obligations under international treaties require that any benefit that is granted to Canadian copyright owners must also be provided to non-Canadians when their works are used in Canada. As a result, most of the money collected from Canadians would go to the U.S.
Third, copyright owners are already paid for lawful online activities through commercial licence agreements, and in the case of SOCAN, tariffs approved by the Copyright Board. Forcing Canadians to pay another fee for receiving these same lawful services is a form of double-dipping, a practice that was rejected by the Supreme Court in ESA v. SOCAN.
The government has other, far more appropriate policy tools at its disposal to promote Canadian cultural content and Canadian creators. Using these tools enables measures to be specifically targeted to Canadian creators in a way that the Copyright Act cannot.
The BCBC supports the addition of a new exception for information analytics. A human being can access and read a document without having to make a new copy or reproduction. Automated processes need to make technical copies in order to read and analyze the content of documents. Just as Parliament recognized the need in 2012 to create exceptions to apply to the reproductions that are required to operate the Internet, the BCBC believes that a new exception is required to eliminate any uncertainty regarding the making of reproductions for automated information analysis.
The BCBC recommends an additional improvement to the existing “notice and notice” regime. In Bill C-86, the budget implementation act, the government introduced amendments to prohibit the inclusion of settlement demands and infringement notices. The BCBC strongly supports this proposal but believes additional amendments are necessary to protect consumers and to give ISPs the tools they need to stop these settlement notices.
Bill C-86 makes clear that ISPs are not required to forward settlement demands to subscribers; however, it contains no useful deterrent to dissuade rights holders or other claimants from including settlement demands in copyright notices. We believe the onus for excluding settlement demands from copyright notices must rest solely with the rights owner, not the ISPs, who currently face liability for failing to forward compliant notices.
The other needed change is to adopt regulations establishing a common standard for infringement notices. Canadian ISPs and the motion picture industry co-operated on the development of a standard format known as the Automated Copyright Notice System, or ACNS, which is freely available at no charge and reflects Canadian requirements. The government should enact regulations establishing the form and content of notices based on ACNS.
The BCBC is aware that the ministers have written to this committee and the heritage committee with respect to the changes to the Copyright Board and collective management of copyright. The BCBC supports many of the changes that have been introduced to improve the efficiency of Copyright Board proceedings.
The coalition is concerned that some of the changes will eliminate important protections for licensees and could result in monopoly copyright licensing practices that are no longer transparent or subject to regulatory oversight.
The coalition strongly supports amendments that will make it easier for copyright owners to effectively enforce their rights. The act should allow for injunctive relief against all of the intermediaries that form part of the online infrastructure distributing infringing content. For example, it should be explicit that courts can issue a blocking order requiring an ISP to disable access to infringing content available on preloaded set-top boxes or an order prohibiting credit card companies from processing payments for infringing services.
The BCBC recommends that the Copyright Act be amended to eliminate a potential conflict between a court order for ISPs to block access to infringing services and the CRTC, using its authority under section 36 of the Telecommunications Act, to prohibit that blocking.
The BCBC finds it unacceptable that an Internet service provider could be ordered by a court to block access to an infringing Internet service and prohibited by the CRTC from complying with that court order. This conflict must be resolved in favour of the court order.
Finally, the BCBC warns the committee against unfounded claims of a value gap between the music industry and Internet services. The claims made by the music industry and the amendment they're demanding ignore how rights are cleared through commercial transactions. If adopted, these measures would disrupt well-established commercial relationships and would ultimately result in substantial net outflow of money from Canadians to U.S. record companies. For example, the music industry wants the definition of “sound recording” revised so that record companies and performers get paid public performance royalties when sound recordings are used in soundtracks in film and television programs.
The music industry appears to suggest performers and record labels aren't paid for the use of recorded performances in soundtracks. This is simply false.
Record companies are free to negotiate the terms of using recorded music and soundtracks with the movie producer. Performers have to agree to the use of their performances in soundtracks and are entitled to demand payment through their agreements with the record labels. Furthermore, the Copyright Act already provides detailed provisions protecting the rights of performers to be paid for the use of their performances. Revising the definition of “sound recording” as suggested would result in record labels and performers getting paid twice for the same use.
If the committee is concerned about improving the financial fortune of performers, it could recommend that the division of royalties between record companies and performers in subsection 19(3) be adjusted. The simple change would immediately put more money in the pocket of every performer who's performance is played on the radio, streamed online, or played in bars and restaurants.
Thank you. Those are my comments. I look forward to your questions.