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Everybody Is Jumping on the Levy Bandwagon

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From levies on blank CDs to tariffs on background music played in dental offices, Canada has long held the reputation of being a haven for policies that support cultural and creator groups through levies, tariffs, and other fees.  In recent months, this love of levies has grown dramatically as a number of new proposals have emerged that could significantly increase the costs to consumers for Internet, television, and new media services.  

While cultural and creator groups are the primary proponents of these new funding schemes, they are by no means alone as broadcasters, cable companies, and Internet service providers have jumped into the levy and tariff game.

The cultural group proposals have focused primarily on Internet services.  The best-known is the Songwriters Association of Canada plan to fully legalize peer-to-peer file sharing of music by adding a $5 monthly charge to the cost of Internet access.  That proposal has generated considerable debate, with many consumers expressing concern about a plan that would hit all Internet users, without regard for whether they engage in peer-to-peer file sharing.

Joining the SAC plan is a recent proposal that has garnered support from a handful of creator groups that includes the Canadian Film and Television Production Association, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Directors Guild of Canada, and Writers Guild of Canada.  The proposal envisions the CRTC establishing a new mandatory ISP contribution of 2.5 percent of broadband revenue to help fund Canadian new media content creation.  

Late last month, the groups released the results of a public opinion survey which they said found that "69 percent of Canadians believe that ISPs should be required to help fund the production of Canadian digital media content in the same way that cable and satellite TV providers are required to contribute a small percentage of their revenues to the production of Canadian television programs."

The proposals do not end there.  Last week, ACTRA also called on the CRTC to require broadcasters to spend seven percent of their revenues on Canadian English-language drama programs.  Moreover, the Creators Copyright Coalition, which is comprised of 16 associations and collectives, recently recommended that the government extend the private copying levy to all technologies that permit private copying.

Yet cultural groups are the not only ones clamouring for new levies and tariffs.  Canada's broadcasters have been busy lobbying the CRTC to require cable and satellite companies to add a fee to their subscribers' bills for carriage of over-the-air broadcast signals.  That would mean that advertiser supported networks such as CTV and Global would receive additional revenues from millions of Canadian television subscribers.

The cable companies unsurprisingly oppose the broadcaster proposal; however, they are also looking new tariffs of their own.  In late 2006, Videotron proposed a new Internet transmission tariff that would allow ISPs to charge content creators for transmitting their work over the Internet.  This proposal is viewed as part of the larger ISP push for a two-tiered Internet in which creators and websites would pay for the privilege of having their content transmitted on the "fast track," while consigning everyone else to a slow lane.

Although it is unlikely that all of these proposals will be implemented in the short term, it would be a mistake to dismiss them out-of-hand.  Indeed, the CRTC has already received submissions on the fee for carriage proposal and it is expected to conduct hearings that could address the 2.5 percent broadband fee and the Internet transmission tariff later this year.  

As these plans make their way through the legislative and regulatory process, one thing seems certain.  While cultural groups, broadcasters, and ISPs battle it out, Canadian consumers will ultimately be left footing the bill.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at or online at