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Higher music levy picks consumer pockets

By Richard Morochove

First published March 18, 2002

It's time we put an end to music piracy in Canada. The cost to Canadians is too much to bear.

I'm not talking about what the music industry calls pirates, MP3 trading networks such as Napster, now eviscerated and all but shut down by a series of court orders.

The real music pirates are the big players in the Canadian music business, which is dominated by foreign-controlled music companies, such as Sony Music. They're picking the pockets of computer users with a levy on media sold in Canada, such as CD-Rs. Sad to say, it's all legally sanctioned

The music industry's mouthpiece is the Canadian Private Copying Collective (CPCC). These buccaneers of the digital seas aren't making enough dough from the music business. So, they want to ride on the coattails of the computer business and earn even more money whenever a Canadian buys a storage medium that could conceivably be used for music.

The CPCC wants to dig deeper into our pockets, requesting a substantial hike in the levy for 2003. They also want to add the levy to new media. For example, the barons of music want to extend the levy to flash media. This is a type of storage commonly used in digital cameras.

When you buy a flash media card so you can save family snapshots, you'll be paying extra because the music industry says you could have used it to store digital music.

Under Canadian law, it doesn't matter whether you use the medium for recording music or for storing digital photos or computer data. The music industry gets your money, regardless.

Many computer users backup computer data on recordable CDs. Personally, I think they're close to an ideal backup medium, so it's my backup method of choice.

CD drives are standard equipment on virtually all personal computers sold in the past several years. Your data can easily be restored to another machine, should your usual computer have a problem. As a data backup and storage medium, CD-Rs are cheap and quite reliable.

CD-Rs will still be reliable, but their cost will soar under next year's proposed tariff.

Initially, the levy was reasonable in relation to the price you paid for a CD-R disc. The levy was introduced a couple of years ago at a rate of 5.2 cents per CD-R disc, at a time when these discs sold for $10 each.

Now the levy is 21 cents per disc. These discs currently sell for as little as 35 cents, after the 21 cent levy is tacked on. Put another way, a CD-R disc that would sell for 14 cents without the levy, now costs 35 cents.

The new proposal calls for nearly tripling the levy to 59 cents per disc. If this levy is approved, the music industry will receive far more than all other suppliers combined from the sale of each blank CD-R.

The music industry will rake in more than four times the total amount paid to the manufacturer, distributor and retailer of the disc! When you backup your computer on CD-R, they'll laugh all the way to the bank.

How can we stop this insanity? You may consider an appeal to the Copyright Board of Canada, which will hold public hearings on the proposed levy, starting May 23. Details are on its Web site at the link CPCC's Proposed Tariffs.

Some grassroots computer user groups are planning to lodge e-mail protests with the Copyright Board. I believe this is a waste of time. The Board will only consider objections filed in proper form, otherwise they will be ignored. Practically speaking, you'll need to retain a high-priced intellectual property lawyer to ensure your objection meets the Board's requirements.

The cost to object is high. Two years ago, in the last levy go-round, CATA (Canadian Advanced Technology Alliance), which represents Canadian high tech companies that use the discs for software, had to drop out of the hearings due to the complexity and cost of the legal proceedings.

How can the average computer user expect to be heard? The high cost of objecting to the levy effectively silences critics. By default, the well-financed special interests will get their way. Fundamentally, it's a flawed, undemocratic process.

There is another, more fruitful avenue of protest: our politicians. They passed the unsound law that led to this unfair levy. They can toss the law out and come back with something better, one that gives average Canadians a voice.

If you object to the levy, I recommend you contact your Member of Parliament with your concerns. You can lookup your MP's e-mail address at Canada's Parliament Web site. You can also copy your e-mail to Prime Minister Jean Chretien at

Let your MP know how you feel about the music industry's levy. If enough computer users protest, your MP will realize he stands to lose more votes from angry Canadian computer users than he will gain from the enriched shareholders of the foreign-controlled music companies. CW

Richard Morochove, FCA, is a Toronto-based computer consultant.

Copyright 2002 by Morochove & Associates Inc. All rights reserved. This work may not be copied or distributed by any means without our prior written permission.

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