Music Group Calls for ISP Tax to Subsidize the Music Industry

The Screen Composers Guild of Canada (GSGC) is demanding that the government slap a tax on ISPs to subsidize the work they are paid for.

The highly profitable music industry (from the labels perspective anyway) is appearing before the government with cap in hand. In a submission to the Canadian government in the copyright reform hearings, the GSGC says that they are entitled to a cut of the profits from ISPs in a completely different industry.

The proposal suggests that 15GB per month is more than enough for people who merely use the Internet for e-mail. Anything after that would be subject to the tax.

The demand goes over top of Music Canada’s demand for a $160 million bailout – a call that was echoed by the CPCC. On top of it all, there have been rumblings amongst the music industry corporations to implement an iPhone tax to also subsidize the music industry.

One problem with the proposal is the 15GB threshold. If you are a business that needs to move data around, you aren’t exactly randomly downloading or streaming music. There is no shortage of companies that move large amounts of data around for business related reasons. Subjecting those businesses to an ISP tax would raise the cost of doing business and potentially threaten smaller and weaker businesses in the first place.

A related problem is that some businesses offer public WiFi. If everyone is trying to access e-mail and simply browsing the web for news, that business can very easily hit more than 15GB per month.

In addition to this, many websites out there feature auto-playing video’s. This is a problem with some poorly managed websites that insist on placing auto-playing videos everywhere. If you find yourself browsing some of these sites, it isn’t hard to go well over that 15GB a month threshold. This goes over top of websites that feature full fledged video’s as ads on their websites.

Another problem is the gaming community knows full well that 15GB a month just doesn’t cut it in this day and age. If you pay for 5 video games in a month, for instance, there are plenty of options out there that would make 15GB seem like nothing. These people are downloading legally purchased content, yet the music industry somehow feels entitled to a cut even though the content has already been legally paid for in a multitude of ways.

A side problem is the part of the community that streams video games for others. If you like watching people play video games (or are the person that streams the game yourself), then you’ll very easily think of 15GB as a laughably small amount on a per month basis.

In all of these instances, either the music has already been licensed and paid for or music doesn’t even enter into the equation all together.

Michael Geist has posted excerpts from the hearing:

The group proposes that the first 15 GB of use should be tax free, suggesting that the free use will cover emails and other basic uses. For everything above that amount, the copyright tax on data would apply:

We envision a new “internet-light ISP service” that could form the exchange of revenue that we refer to as the SCGC Copyright Model (SCGC-CM). It would allow home internet users fifteen gigabytes of unlevied data per-month, enabling ample room for email, commerce and downloading, but beyond that, a copyright levy could be collected and re-mitted to a collective for distribution to copyright holders.

At committee, the group expanded on the argument:

An ISP subscription levy that would provide a minimum or provide a basic 15 gigabytes of data per Canadian household a month that would be unlevied. Lots of room for households to be able to do Internet transactions, business, share photos, download a few things, emails, no problem. But my own personal experience is that in my family, when you’re downloading and consuming over 15 gigabytes of data a month, you’re likely streaming Spotify. You’re likely streaming YouTube. You’re likely streaming Netflix. So we think because the FANG companies will not give us access to the numbers that they have, we have to apply a broad-based levy. They’re forcing us to.

Geist points out that the proposal is problematic on a whole number of fronts – many of these points we’ve already gone over here. One of the big problems Geist cites is the fact that a tax would harm online access for low income families.

The GSCS cites the fact that people stream media online as a reason why they should be entitled to royalties. In fact, at the committee, they even use Spotify as a way people enjoy music. Spotify is a legal streaming service. When labels have their music streamed on such a service, they allow their content to be heard because of a deal they worked out with Spotify. That deal involves royalties to be paid to the publishers in the first place.

The proposal basically asks for a system that allows for double dipping. They want a cut of royalties through the deals with services like Spotify and they want royalties from ISPs simply for delivering the content.

Given that the Liberal government has been wanting to move ahead with network neutrality, it’s likely that this is going to be a tough sell. Of course, we know that anything can happen, but it is difficult at this stage to see this getting any legs.

Drew Wilson on Twitter: @icecube85 and Google+.

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