Copyright Board Decision



	for immediate release Copyright Board Decision Is Aberrant and Unreasonable Rate-setting board should set rates, not policy Ottawa, October 17, 2005 – The Canadian Association of Broadcasters (CAB) is astonished by the departure from well established rate-setting principles demonstrated in the October 14 decision of the Copyright Board on two commercial radio tariffs. Rather than just approving rates based on the value of music, this panel’s decision seeks to appropriate a cultural policy making role, and establish its own economic order for the distribution of cultural subsidies. It is remarkable that this panel took the liberty of criticizing Parliament itself by gratuitously condemning the legislated tariff rate that Parliament granted small broadcasters. Unlike the CRTC, which has a legislative mandate to regulate and supervise all aspects of the Canadian broadcasting system, the Copyright Board is a rate-setting body that does not have a policy-making function. Regarding CRTC-mandated contributions by private radio, the panel states: “(T)he Board refuses to take into consideration the fact that commercial radio makes substantial contributions to the Canadian music industry or that it provides ongoing promotional support to Canadian artists in setting the tariff.” It is astonishing that this Board would explicitly attack its own enabling legislation, blatantly dismiss cultural subsidies required by the CRTC, and then confer onto itself the legitimacy to reengineer the relationship between the radio and music industries. In its decision, the Board made very significant increases in the tariff levels that radio stations have to pay to the Society of Composers, Authors, and Music Publishers of Canada (SOCAN), and to the Neighbouring Rights Collective of Canada (NRCC) for the use of their music. By the Copyright Board’s own accounting, this will represent a 30% increase in the amount of fees that private radio stations will have to pay. Some increases are as high as 46%. “These massive and historic rate increases are entirely unjustified, and are nothing more than a tax on efficiency, innovation and good programming,” said CAB President and CEO Glenn O’Farrell. “We are at a loss to understand how this panel – which did not include the newly-appointed Chairman of the Copyright Board – could be so certain that all previous Boards got it wrong for the past 50 years.” The CAB believes that the decision from the Copyright Board is both aberrant and unreasonable. The Board has based its arguments on immeasurable conjecture, such as its finding that past Boards have undervalued music. They also state that there has not been a rate increase in 25 years. This belies the fact that that these tariffs are “self-accelerating”. Without increasing the rates, the total amount paid by private radio in copyright fees between 1995 and 2003 has grown by 132%. Over the same period, with the new increases, that amount jumps to 185%. Meanwhile, over the same eight year period, private radio revenues have gone up by only 53%. Furthermore, the Copyright Board’s assertion that the efficiencies achieved in radio stations justify these increases demonstrates that these measures are punishing broadcasters for being competent and progressive, and contradicts an earlier Board decision dismissing the relevance of economic efficiencies realized by collectives. “Because this panel of the Copyright Board acted in such an undisciplined manner, there is now a clear and immediate need for the Government of Canada to rein in this renegade to ensure it complies with its legislated mandate,” says O’Farrell. The CAB is reviewing all courses of action to aggressively challenge this decision. The Canadian Association of Broadcasters (CAB) is the national voice of Canada’s private broadcasters, representing the vast majority of Canadian programming services, including private radio and television stations, networks, specialty, pay and pay-per-view services. - 30 - For more information, please contact: Susan Tolusso Director, Communications (613) 233-4035 ext. 331 (stolusso@cab-acr.ca)