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Taxing the Internet: Canada’s Proposed $10 Monthly Music Theft Compensation Fee

Phillip Dampier March 7, 2011 Canada, Consumer News, Data Caps, Public Policy & Gov't 5 Comments

Canadians may soon get a license to steal, if songwriters have their way.

For $10 a month, Internet users will be able to beg, borrow, or openly steal as much music as they want, from anywhere they want, without legal reprisals.

The apparent “cry uncle” tactic against piracy comes from the Songwriters Association of Canada.

Eddie Schwartz, president of the group, says the monthly fee would be automatically tacked onto every Internet access account, raising more than $800 million annually.  Consumers who don’t want to pay the music sharing tax can “opt out,” if they notify the Association and agree not to engage in any online music sharing activity.

“The surest and swiftest way to dramatically reduce infringement is to give consumers an authorized way to music-file share. Once such an authorized system is in place, consumers who refuse to pay a reasonable license fee will clearly be choosing to infringe and can be dealt with accordingly,” reads Schwartz’s proposal.

Proceeds raised from the monthly tax will be diverted to songwriters, but not record companies — a matter the latter has taken notice of, claiming they have not been involved in the discussions.

This is not the first time the group has proposed a “music license fee.”  In 2007, the group tried to amend the Canadian Copyright Act to force service providers themselves to pay a tax on behalf of their file sharing customers.  The effort never made it out of Parliament.

This time, the group is talking directly with several unnamed Internet Service Providers about implementing the fee without seeking advance approval from the government.

Schwartz argues his proposal will monetize file sharing and eliminate enforcement headaches, because the group would only target individual infringers that refuse to pay the monthly license fee.  Schwartz says the majority of Canadians would support it.  He quoted recent studies that claim as many as 80 percent of all file-sharers would consent to a monthly fee if it eliminated their risk of prosecution.

But the government may take a dimmer view.  Many provinces forbid automatically billing consumers for services without their direct consent.  The so-called “negative billing” proposed by Schwartz would require a consumer to specifically opt out of the monthly charges.

Consumers are also likely to question higher charges for Internet service at a time when regulators are still reviewing usage-based billing schemes.  Considering the fees only cover songwriters, more than a few consumers are likely to wonder when Hollywood studios, television networks, software publishers, and record companies will come for their piece of the action — all have suffered to a similar degree from the underground trade of their products.

[Thanks to our reader Alex for sharing this news tip.]

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Arsta;
Arsta;
13 years ago

I”m not opposed to this in theory , provided these companies give up the right to sue to basic copyright infringement.

Of course, then they’ll have a real piracy problem, as people would say (I am paying for it)

Scott
Scott
13 years ago
Reply to  Arsta;

If you were to opt out, they’re saying they would then have a verified list of people to monitor/check against in order to sue. The problem with this is the gross amount of money they’re demanding, $10/mo from every internet using citizen that doesn’t make the concious decision to opt out. This is just for SONGWRITERS too, this doesn’t include payments for performers, the music label companies, or anyone else in the music industry that wants a peice this guaranteed tax from your wallet. Given that labels only give songwriters a few percent of revenue, they’d probably want 10x the… Read more »

Dylan McCall
Dylan McCall
13 years ago

If this happened, I would be asking the same question I ask about the CD copying levy: What about film? What about software developers? Photographers? Writers?

May the richest lobbyist win.

Willy
Willy
13 years ago

Woo hoo! All the Alanis Morrisette you could want without guilt! Yay Canada!

The_Jerk
The_Jerk
13 years ago

I’d agree to an opt-in for a buck a month that included all types of copyright infringement. Otherwise Schwartz can go to hell or Zimbabwe. Of course, he’d have to opt-out of Zimbabwe or he might go straight to hell…

Umm, you need to left-align the text in your Comment Editor.

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