Effective Copyright Online – Drawing from Tariff 22 and 22A

Illegal file trading will likely exist on the internet for the foreseeable future. As a result we are faced with the challenge of upholding the notions of copyright online or changing the scope of such laws and legalizing, to some extent, file trading. The former is an objective which I believe Tariff 22A falls short of addressing adequately and the latter has lead to unease at the Copyright Board and elsewhere. I argue here that the affirmation of copyright laws online is possible and that the principle elements of a working model can be found in the Canadian Copyright Board’s Tariff 22 decision as opposed to the recently approved Tariff 22A.

The impact of tariffs has lead many, including Michael Geist, to opine that downloading in Canada may be legal. A current version of their argument can be summarized as follows.

  1. Tariff 22A’s approval of a tariff on communication means that the transmission of the files over the internet, regardless of their copyright status, will be legalized.
  2. The Private Copying Levy would then allow individuals to lawfully copy those files to any personal medium.

Viewed in this light blanket tariffs are seen as legalizing the actions they target and they may therefore have unintended consequences. Any proposal for copyright reform must therefore address the question of legality head on.[i]

Tariff 22 would have seen ISP’s which make income via advertising pay copyright holders 3.2% of their gross revenues or 25 cents per subscriber, whichever was greater. Large media corporations (read ISP’s) vehemently opposed the scheme on the underlying basis that the model would destabilize the media playing field. They could no longer be certain of the costs they would need to pass on to users as expenses would be tied to revenue. Market neutrality is therefore another key consideration for any working model.

The SCC’s Tariff 22 decision also clarified that any version of copyright enforcement on the internet needs to hold those responsible for communication under s.3(1)(f) of the CCA legally responsible. Specifically, the decision held that the ISP’s could not be held responsible as they were merely conduits falling under the exception in s.2.4(1)(b).

More generally we can also say that any solution should be capable of easy implementation. To this end the proposals made in Tariff 22 are again of value. However, instead of targeting ISP’s we need to leverage their relationship with users. There are a small finite number of ISP’s and their networks clearly support illegal file trading. Furthermore, a solution working with ISP’s could target a stable relationship rather than a volatile technology. Over the past 20 years subscriber relationships with ISP’s have not changed appreciably despite substantial technology advances. In opposition Tariff 22A targets individual websites vastly increasing the number and instability of control points and doing little to stem the flow of illegal file trading. In fact the tariffs may only serve to further handicap legitimate operations.

The solution I propose has two principle components. Its first branch recommends that our existing legal solutions (i.e. physical enforcement) for resolving communication infractions should remain in place. This means that when illegal communications reach a level of public pervasiveness which is unacceptable the source of such actions can be conventionally eliminated. This occurs regularly today and has been compared to the war on drugs.[ii] Though far from perfect stemming the flow into popular society may be the best we can achieve.

The second branch addresses the fact that a lack of total elimination results in recognizable losses for artists. To this end the individuals (i.e. the communicators) in the network need to be fined based on the type and magnitude of their copyright transgressions.[iii] With the use of passive file tracking at the ISP level[iv] it would be relatively easy to establishing the actus reus component of the criminal activities taking place while at the same time respecting privacy rights.[v] This provides us with the legal grounding necessary to issue a fine. ISP’s would only be responsible for assessing and collecting fines which is in keeping with their exception right under s.2.4(1)(b) of the CCA. Finally, the fines can be established as set rates thereby eliminating any market imbalances.

The end result is that the arguments made by the ISP’s are quelled but the principle ideas and easy implementation of the original Tariff 22 proposals are retained through co-operative methods while avoiding the presumption of legality created by tariffs.

[i] This was also recognize by CRIA in its Tariff 22A arguments before the Copyright Board in which is suddenly reversed its previous stance on tariff viability.
[ii] Jack Goldsmith and Tim Wu, Who Controls the Internet? Illusions of a Borderless World (New York: Oxford Press 2006) at 179.
[iii] This is in accordance with s.42 of the Canadian Copyright Act – which creates the criminal penalty for copyright infringement.
[iv] In fact most of these technologies are already used by ISP’s to shape network traffic.
[v] For further clarification see the Canadian Privacy Act under “Collection, Retention and Disposal”

  1. The novel approach you take regarding Tariff 22 is interesting and worthy of further exploration. However, the idea of a blanket tariff should not be brushed aside so quickly, as it offers solutions to problems incurred when directly targeting individuals.

    I agree that, “any solution should be capable of easy implementation”, and this is where I find room for debate on your proposal. Your proposal could potentially add a layer of complexity to ISP operations and confusion to individual users. Under your proposal, ISPs would incur the added responsibility of assessing and collecting fines for millions of users, no simple task and one they would be reluctant to take on given their favourable treatment by courts. Users would also be wary of where to download media and what they could do with it, possibly curbing creativity. Furthermore, the US example shows that individual fines do a poor job of deterring illegal downloading.

    Implementing a blanket tariff such as the one proposed by The Song Writers Association of Canada, would provide a simple and straightforward solution. Users could pay a low monthly fee to ISPs which would allow them to download, redistribute and mash together however they wish. The revenue could be distributed to artists based on tracking data. Although you show that this could potentially lead to the legitimization of “illegal” downloading, I do not see this as a problem as artists are compensated, user freedom is maximized and complexity is minimized; all noble objectives in copyright law.

  2. In short then, it would appear that you are advocating for an adoption of Tariff 22’s flat fee approach (and discarding the additional ISP revenue calculations). I completely agree that this is a valuable approach but it faces the heavy burden of essentially re-arguing a failed proposal. More substantial changes might be necessary to rekindle the examination.

    As noted I think that charging a tariff through ISP’s is actually an extremely effective model for recouping losses for artists. We need to reinitiate this discussion. Nonetheless, in both of our proposed models ISP’s become responsible for collection and all of its associated costs. I think overcoming this is actually quite easy. ISP’s could be allowed, with proof of costs, to take a percentage of the tariffs or fines to pay for their implementation overhead.

    In terms of complexity, there is certainly a price to be paid at the ISP level by my proposal when compared with yours. However, I think you underestimate the end users sophistication. When faced with a flat fee or a fee based on actual use I know which one I normally prefer. Imagine paying a flat fee for your hydro or gas usage? Is this all that different?

    Turning to the question of legality I feel that recouping losses is very different from effecting legitimate sales. Even if we find an effective method for collecting money from end users it is highly doubtful that this money would find its way into all the appropriate hands. I believe that the models we are examining are designed to reduce copyright infringement though disincentives. Your model uses tariffs as a replacement revenue stream. Perhaps this is an approach which will become acceptable in time if we can distribute such revenue appropriately. At this juncture, however, I think creators fear the presumption of legality and feel a loss of control over the dissemination of their works for which they are rarely actually repaid.[i]

    Though as you state the model in the US of charging individual users has had little impact, they have not pursued many cases. Like plane crashes there have been merely a few high profile cases and the probability of being caught remains extraordinarily low.[ii] In opposition the model I proposed would target every internet user downloading from illegitimate sites. Furthermore, illegitimate sites themselves would continue to be targeted. The probability of being caught would therefore be very close to 100%.

    [i] As an example Access Copyright manages to distribute only about 66% of its revenue after expenses are deducted. See: http://www.accesscopyright.ca/docs/AnnualReports/Access%202006%20annual%20report%20Final.pdf
    [ii] 17,000 arrests were made in the US between 2003 and 2005. With a population of approximately 300M this meaning the chance of being caught is approximately 0.003% per annum. See: http://www.pcworld.com/article/id,123946-page,1/article.html

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