Copyright Board maintains tariff on blank CD sales

The Copyright Board of Canada said last week that it is not seeking to alter its levy on blank media, but one Sony executive challenges the relevance of the levy at all.

The tariff is collected by the Canadian Private Copying Collective and distributed to artists and publishers based on a formula derived by music sales and airplay minutes.

The measure is unpopular among members of the Canadian business community who use blank media for reasons other than music copying, but is in danger of missing its target altogether, said Rick Bourrier, general manager of corporate planning for Toronto-based Sony of Canada. (Sony is also a member of the Canadian Storage Media Alliance.)

Audio cassettes as a music medium are heavily in decline and sales of most of the media the levy addresses have dipped, said Bourrier. “The legislation was outdated when it was introduced. Nobody’s using audio cassettes to record pre-recorded music. That passed years ago, but the levy’s still with us,” he said.

It would take a concerted effort and some expense on the part of cassette manufacturers to fight the levy, said Bourrier. “Nobody’s doing enough audio cassette business to make that worthwhile.”

The retailers that sell the media are still prepared to air their concerns, said Howard Knopf, a lawyer at Ottawa-based Macera & Jarzyna, who represents the Retail Council of Canada. “Are people using CDs any more to copy music? I don’t know. It doesn’t seem that logical when the technology has changed so much.”

Anna Bucci, executive director of the CPCC, said the Copyright Board will hear complaints from levy objectors later this year, but “I must say, we haven’t had a lot of contact from industry groups over the last 12 months.” In October, the Copyright Board will retroactively set levy rates for 2005 and 2006. The Board has been operating under an interim tariff while the regime was subject to a court review which has since been set aside.

The fact that rates can be set retroactively at all is perplexing for retailers, said Knopf, since they would have no means to reimburse people who have purchased blank media in the last two years. But, according to Bucci, it’s unlikely the levy rate will fall. “It’s never happened before,” she said. “Certainly, it would be an unusual situation.”

So far the CPCC has distributed about $61 million to artists and publishers in proceeds collected by the levy. The CPCC also has a zero-rating program through which some organizations can gain exemption from the levy. Those include education institutions, law enforcement agencies, software companies and about a dozen other types of organizations that might use blank media for reasons other than music.

Most of the organizations that have to submit to the levy have learned to live with it, said Bourrier. “This levy has been around for quite some time, so I think most businesses have found some way to adapt.”

The only way the levy would be completely eliminated would be through an act of legislation, since it is protected by the Copyright Act, said Bucci. The current Tory government made the levy’s elimination part of its pre-election platform but has yet to take steps.

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