Decisions
Decision Information
This content was automatically created by Lexum using generative artificial intelligence (AI) technology, without editorial revision, and is not official. Users are responsible for checking its accuracy and completeness.
Overview
The decision concerns the royalties to be collected by the Society of Composers, Authors and Music Publishers of Canada (SOCAN) and the Neighbouring Rights Collective of Canada (NRCC) for the public performance or communication to the public by telecommunication of musical works and sound recordings by pay audio services in Canada for the years 2003-2006. Pay audio services are digital music services offered to subscribers of direct-to-home satellite or digital cable broadcasting.
- Federal Court of Appeal, July 17, 2003: Dismissed NRCC’s application for judicial review challenging the Copyright Board’s decision for the 1997-2002 tariffs on the allocation of royalties and the certification of a joint tariff.
Parties' Submissions
- SOCAN and NRCC: Proposed royalty rates for 2003-2006, with SOCAN initially proposing 12.35% for 2003 and 16.47% for 2004, and NRCC proposing 7.8% for both years. For 2005-2006, both collectives jointly proposed rates of 12.35% for SOCAN and 5.85% for NRCC, with a 50% discount for small systems.
- Objectors (Bell ExpressVu, CBC/SRC, Canadian Cable Television Association, Corus Entertainment Inc., Star Choice Communications Inc., and DMX Music Inc.): Objected to the proposed tariffs for 2003 and 2004, arguing for lower rates. DMX Music Inc. specifically objected to NRCC’s 2004 tariff.
Legal Issues
- Whether the proposed royalty rates for 2003-2006 are reasonable and justified.
- Whether the terms and conditions of the tariff should align with the joint proposal for 2005-2006.
Decision
- The Board certified the tariff for 2003-2006 in accordance with the agreement reached between SOCAN, NRCC, and the objectors, except DMX Music Inc. The certified rates were 12.35% for SOCAN and 5.85% for NRCC, with a 50% discount for small systems.
Reasons
The Board:
- Adopted the rates proposed for 2005-2006 for the entire 2003-2006 period, as they were agreed upon by SOCAN, NRCC, and the objectors, except DMX Music Inc..
- Modified the definition of "small systems" to ensure consistency with the approach used in SOCAN’s Tariff 17, addressing legal difficulties arising from the CRTC exemption order.
- Added a specific reference to NRCC’s Tariff 3 in subsection 4(2) to clarify uses covered by other tariffs.
- Included a new condition in paragraph 10(2)(iii) requiring collective societies to allow undertakings to request confidentiality for shared information, consistent with past practices.
- Removed transitional provisions from the tariff as they were no longer relevant.
Decision Content
|
Copyright Board |
|
Commission du droit d’auteur |
|
Date |
2005-02-25 |
|
Citation |
Files: Public Performance of Musical Works, 2003-2006 and Public Performance of Sound Recordings, 2003-2006 |
|
Regime |
Public Performance of Music Copyright Act, section 68(3) |
|
Members |
Mr. Stephen J. Callary Mrs. Sylvie Charron Ms. Brigitte Doucet |
Statement of Royalties to be collected by SOCAN and NRCC in respect of pay audio services, 2003-2006
Reasons for decision
On May 11, 2002, the Copyright Board published in the Canada Gazette the statement of royalties proposed by the Society of Composers, Authors and Music Publishers of Canada (SOCAN) for the public performance or the communication to the public by telecommunication, in Canada, of musical or dramatico-musical works by pay audio services for 2003, and the statement of royalties proposed by the Neighbouring Rights Collective of Canada (NRCC) for the communication to the public by telecommunication, in Canada, of published sound recordings embodying musical works and performers’ performances of such works by pay audio services for 2003. Pay audio services are digital music services offered to direct-to-home satellite or digital cable broadcasting subscribers.
SOCAN proposed a rate of 12.35 per cent of affiliation payments and NRCC, a rate of 7.8 per cent. SOCAN’s rate is higher than the one certified for 1997-2002 by an amount equal to the 10 per cent discount the Board applied to account for the fact that it was a new tariff, while NRCC’s rate is higher than the non- discounted rate for 1997-2002. For small systems, both collectives proposed a 50 per cent discount.
The proposed tariffs for 2004 were published in the Canada Gazette on April 19, 2003 and May 24, 2003 respectively. SOCAN proposed a rate of 16.47 per cent while NRCC maintained its proposed rate at 7.8 per cent.
For the years 2003 and 2004, Bell ExpressVu, CBC/SRC (Galaxie), the Canadian Cable Television Association, Corus Entertainment Inc. (Max Trax) and Star Choice Communications Inc. objected to both tariffs. In addition, DMX Music Inc. objected to NRCC’s tariff for 2004.
For the years 2005 and 2006, SOCAN and NRCC filed a joint statement of proposed royalties which was published in the Canada Gazette on April 17, 2004. The two collectives proposed rates of 12.35 and 5.85 per cent respectively, rates that are higher than the ones certified by the Board for 1997-2002 by an amount equivalent to the 10 per cent discount applied by the Board at the time. The rates proposed for small systems were again half of the main rates. The proposed tariffs were not opposed.
On July 23, 2003, NRCC (followed later by SOCAN) offered to objectors for the years 2003 and 2004, rates lower than previously proposed but equal to the ones proposed for 2005 and 2006. NRCC’s offer came after the July 17, 2003 decision of the Federal Court of Appeal to dismiss NRCC’s application for judicial review which challenged the Board’s decision for the 1997-2002 tariffs on two main accounts: the allocation of royalties between SOCAN and NRCC and the certification of a joint tariff.
On January 26, 2004, NRCC informed the Board that an agreement had been reached involving SOCAN and all objectors, except for DMX Music Inc. which, according to NRCC, did not operate a pay audio service in Canada and was not part of the agreement. All objectors have withdrawn their objections, under the condition that the terms and conditions of the tariff certified for the years 2003-2006 be the same as that of the joint tariff proposed for 2005 and 2006.
The tariff the Board certifies for the period 2003 to 2006 is in accordance with the agreement and thus identical to the one proposed for 2005 and 2006. The certified rates are as follows:
12.35 per cent and 5.85 per cent of affiliation payments for SOCAN and NRCC respectively, and
6.175 per cent and 2.925 per cent of affiliation payments for SOCAN and NRCC respectively, for small systems.
The tariff includes the following changes compared to the one certified for 1997-2002:
-
The 1997-2002certifiedtariff modifiedthewordingoftheDefinitionof“SmallCableTransmissionSystem”Regulations(SOR/94-755) totake intoaccount theExemptionOrder forSmall CableUndertakings(Appendix 1, Public Notice CRTC 2001-121,December 7,2001). Asthe BoardexplainedinitsdecisionofMarch19,2004withrespecttoSOCAN’sTariffs2.Aand17,thisapproachcreateslegaldifficulties.ThetarifftheBoardnowcertifiesadoptstheapproachused for SOCAN’s Tariff 17 (CanadaGazette,March20,2004,section2):section3 ensures that systems which may have losttheir status as small cabletransmissionsystems as a result of the CRTC exemptionorderwillcontinuetopaythesameamountof royalties as small cable transmissionsystems.Thisistheapproachproposedbythe collectives for 2005and 2006.
-
AspecificreferencetoNRCC’s Tariff3,which hadnot yetbeen proposedatthe timeof thelastcertification,hasbeenaddedtosubsection 4(2)which enumeratesusescovered byothertariffsandthusnotcoveredbythis tariff.
-
Paragraph 10(2)(iii)ofthetariffprovidesthata collective society wishing to shareconfidential informationinconnectionwithproceedingsbeforetheBoardmustfirstafford the undertaking that provided theinformationtheopportunitytorequestthatitbe treatedconfidentially. Partieshave agreedtotheadditionofthisnewcondition.Asthisisconsistentwithitspastpractices,theBoard agrees toincludeit inthistariff. TheBoardtakes notehoweverthatthisisa newwordingof aparagraphincludedin manyothertariffs.Whenappropriate,theBoardwillexaminethepossibility ofmodifying theothertariffsin order to ensure consistency.
-
Thetransitionalprovisionsarenolonger relevant and are deleted.
Claude Majeau
Secretary General