Our total payments to copyright collectives? About $500m annually, Knopf says

Howard Knopf, a copyright lawyer with Macera & Jarzyna, LLP in Ottawa, called me this morning to point out that some general comments in the third paragraph of my Copyright Board story yesterday (“Experts call for sweeping review of Copyright Board“) did not reflect what he said. The story’s been clarified. Here’s precisely what he said in his email to us:

Canada has more collectives and a much larger copyright tribunal than any other country. The costs imposed by these collectives on Canadians are in the neighbourhood of $500 million a year. These costs range from the so-called “wedding tax” to tariffs on the education system to blank CD levies and are, in some instances, among the highest such costs in the world. In many cases, these types of tariffs don’t even exist in other countries in any form. The cost of hearings before the Copyright Board is enormous and now often goes into seven figures, even for objectors. The process takes years, the decisions are invariably retroactive and are often reversed. In all of this, economic efficiency and the public interest are getting lost.

I have long advocated for another “Parker Commission” that would revisit Canada’s copyright collective system and its oversight, just as Justice Parker did so brilliantly in the 1935. Such a Commission could also look at other controversial IP issues, such as the PMNOC regime. But given the current climate of copyright fatigue and fiscal restraint, such a project may not be feasible in the short term.

However, a lot can be done to improve the system though the simple process of implementing regulations, both as proposed by the Board pursuant to s. 66.6 of the Copyright Act  or the Government pursuant to s.66.91. Without opening up the act, such regulations could address many of the most pressing concerns about how collectives and the Copyright Board operate. For example, here are “baker’s dozen” issues they could address:

  1.  Timelines for holding a hearing
  2.  Timeline for rendering a decision following the hearing
  3.  The circumstances, if any, under which retroactive tariffs can be imposed
  4. The circumstances, if any, under which interim tariffs can be imposed
  5. The structure of a hearing and whether a hearing should follow the normal process in courts and other tribunals of setting out the essential legal and factual basis of a tariff before proceeding with the discovery/interrogatory process
  6. The scope and nature of the interrogatory/discovery process, including the circumstances, if any, in which an objector’s financial data may be relevant
  7. When only a sample of institutions needs to respond to interrogatories
  8. Basic requirements for the qualification of expert witnesses
  9. The handling of confidential information
  10. The procedure to be used to compel answers to interrogatories and to cite for contempt
  11. To what extent the Board should have regard to the internal affairs of collectives, e.g. re overhead costs and efficiency of distribution to creators
  12. Multi-year tariffs
  13. Case management procedures




The CRTC, a bellwether for government policy?

So, you work in media and telecom and you want to know which way the political winds are blowing, given the Harper government’s focus on the consumer agenda.

For clues and tips, and maybe even a bellwether on government policy, political observers may want to take a closer look at the Canadian Radio-television and Telecommunications Commission.

The Conservative government’s throne speech last week contained a few consumer-interest initiatives that the CRTC is either already looking at, or at least planning to in the near future.

Among them are wireless roaming rates, paper billing charges, and television channel unbundling.

As The Wire Report reported last week (subscriber-only story here), the CRTC is conducting inquiries into roaming rates and the fees consumers pay to receive paper bills for their communications services. Last month, Commission Chairman Jean-Pierre Blais identified television unbundling, also known as a pick-and-pay or an a la carte model for offering television subscriptions, as an issue to be explored in the regulator’s public consultation on TV services, which starts Thursday.

All three of those issues were in the throne speech last week, so there’s some overlap happening.

Blais has emphasized consumer interests since the Harper government appointed him to lead the commission last year, saying in October that the CRTC, under his leadership, will do a better job informing the public about their options in an effort to build a more “informed and empowered” constituency of consumers.

So are the Tories coordinating their consumer work with the CRTC, or are they just inspired by it? Who knows.

But as telecom and media issues become more political, consultants and other political watchers will be tuning in to the broadcast and telecom regulator.

Summa Strategies consultant Michele Austin, a former chief of staff to Conservative cabinet ministers at Industry Canada and Public Works, is aware of the trendlines between the government and the commission.

In an interview with The Lobby Monitor last week (subscriber-only story here), Austin said the conversation around telecom is still changing, and that the CRTC’s Blais is the best person to look to for clues on how to frame the larger story or narrative the government wants to hear.

What shared data plans, connected cars and smart homes have in common

When Telus Corp., BCE Inc. and Rogers Communications Inc. rolled out their new, two-year wireless plans this summer, they each emphasized the money consumers could save by sharing their wireless data plans across multiple devices on a single account.

It was a signal that communications providers are reaching deeper into their whole home strategies to get more households on subscriptions.

Why? For starters, the carriers are hoping they can reduce churn rates by putting multiple members of a single household on the same wireless plan. The idea is that it’s harder and more complicated for an entire family to switch providers than it is for each individual family member.

Whole homes also support the providers’ so-called “quad-play” strategies, under which customers bundle wireless services with Internet, home phone and television for savings. More services, more devices, more data consumption, means more revenues.

And wireless providers are planning to connect more new products and services as part of this strategy.

Rogers, for instance, wants to add products to its “Share Everything” plan, such as its home monitoring service and Internet-connected cars, which it plans to bring to Canada.

“Eventually everything will be part of Share Everything. It’s just a matter of when billing systems and consumption will be there,” John Boynton, Rogers’ executive vice-president and chief marketing officer, said in a telephone interview earlier this month.

“For sure, your automobile … will be treated as a device and just join in the bucket. Your refrigerator. Your home monitoring system, everything will be part of it,” he said. “It’s really the structure that’s the foundation of everything that we’re going to do, going forward.”

CRTC data links wireless ARPU, penetration rates

Unless it’s a pure coincidence, there seems to be a  relationship between the percentage of wireless subscribers in a province, also known as penetration, and the average revenue that wireless providers generate from each user per month (average revenue per user, or ARPU).

That’s according to new data released in late September in the commission’s Communications Monitoring Report.

As The Wire Report reported this week, Alberta, which had 98.2 wireless devices for every 100 residents in 2012, also had a monthly ARPU of $73.50, the highest of any provincial market.

British Columbia was second among the provinces in both categories, with a penetration rate of 81.5 devices per 100 residents and an ARPU of $63.56.

Ontario, which had the third-highest penetration rate at 80.3 devices per 100 residents, had the fourth-highest ARPU at $61.87. Saskatchewan had the fourth-highest penetration rate at 78.8 and the third-highest ARPU at $63.30.

Newfoundland and Labrador ranked fifth among the provinces in each category, our analysis of the CRTC data found, with a penetration rate of 76.8 and an ARPU of $59.69.

Despite their economic differences and the geographic distance between each other, Nova Scotia and Manitoba had similar penetration rates and ARPU. Nova Scotia’s penetration rate of 75.1 devices per 100 residents ranked sixth—slightly ahead of Manitoba’ rate of 74.1—while its $58.94 in ARPU ranked seventh among the provinces, slightly behind Manitoba’s $59.31.

Similarly, Prince Edward Island and New Brunswick also scored closely in both categories, with penetration rates of 71.9 and 70.7, respectively, and ARPU rates of $53.08 and $55.32.

Quebec ranks last among the provinces in both categories, with penetration rates of 66.8 devices per 100 residents and ARPU rates of $51.96, both of which were between 40 and 50 per cent lower than the corresponding rates in Alberta.

So what’s behind the trend? Could all of this mean that mobile providers are selling more add-ons, roaming packages, apps and other features, in Alberta and B.C.? Could there simply be more competition in some provinces, lowering revenues?

It’s possible that economic and cultural factors could be at play. Logic dictates that workers in provinces with lower average wages are less likely to own a cellphone and are less likely to subscribe to more expensive packages if they do.

On the other hand, wireless companies also have shareholders to satisfy, and can’t keep offering cheap services to new customers forever. Sooner or later, they want their subs to spend the big bucks.

Perhaps it could be related to discounts the providers offer. In provinces where penetration is lower, they may have to offer more discounts to bring on new subscribers. Homer Simpson might agree with that theory.

“So that’s your little plan! Get us addicted, then jack up the price!” the Simpsons character once shouted at a saleswoman who had given him a free sample cookie. “Well, you win,” he demurred, as he agreed to buy another, much larger cookie.