By Ahmad Hathout
The Copyright Board of Canada rejected an application that sought to adjust the rates for royalties on ringtones and ringbacks.
In a decision late last week, the board closed the file on a years-old application by the Society of Composers, Authors and Music Publishers of Canada (SOCAN) that proposed a new set of retroactive royalties on ringtones – audio that plays to indicate an incoming phone call – and ringbacks, audio that the calling party hears after dialing and before a call is answered.
The board said the decision was based on two new developments: the Supreme Court of Canada’s decision on the transmission of files and the fact that SOCAN itself said they wouldn’t be pursuing the rates because the market for ringtones is now practically non-existent.
The board last approved royalties for those files in 2012 for the period from 2006 to 2013. The reasoning was that providers transmitted those digital audio files to other users, resulting in a permanent copy of that file being downloaded on the end-user’s device. The board ruled that this constituted a communication to the public by telecommunication, which engaged copyright protections under the law.
In March 2018, the board came to review SOCAN’s proposed tariffs for the next period, from 2014 to 2018, which was later modified to include 2019, 2020 and 2021. In March 2020, SOCAN asked the board to approve the rates after all objectors – the last being Apple – pulled out of the proceeding.
But the board denied that request because it needed to review whether it could even approve tariffs for the digital files in light of new rulings at the high courts.
In 2022, the Supreme Court of Canada ruled that neither the downloading of a work, nor the making available of a work for download, engages the right to communicate to the public by telecommunication.
“If a work is made available for downloading, the author’s right to authorize reproductions is engaged. There are no gaps in protection,” the SCC said in the 2022 ruling. “If a work is downloaded or made available for downloading, s. 3(1)(f) [communicating work to public by telecom] is not engaged. If a work is made available for streaming and later streamed, s. 3(1)(f) is only engaged once.”
After the board said it would need to evaluate the proposed tariffs in light of this ruling, SOCAN said it would not continue seeking approval because the market for the digital files is now practically non-existent, and it would be inefficient for the organization to prepare an application to withdraw those proposed tariffs, the board wrote in its reasons.
That meant all parties had abandoned the proceeding.
“Without the participation of any parties, it would be difficult for the Board to obtain evidence about whether or not there are any activities for ringtones and ringbacks that actually engage the right to communicate to the public by telecommunication (e.g., whether any streams occur or are made available),” the board said in its decision.
SOCAN did not respond to a request for comment.
