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COPYRIGHT - Royalties - Copyright Board - Tariff hearings

Thursday, August 26, 2021 @ 5:44 AM  


Lexis Advance® Quicklaw®
Application by six broadcasting distribution undertakings (“BDUs”) for judicial review of a decision of the Copyright Board that determined the quantum of royalty rates payable under the Tariff for the Retransmission of Distant Television Signals. Application by nine collective societies (“Collectives”) for judicial review of the same decision. The BDUs were retransmitters who distributed distant television signals as part of subscription services distributed to their customers. The Collectives represented the rights of copyright holders who were entitled to royalties for the retransmission of their works. They initiated the underlying proceeding by filing a proposed tariff for the retransmission of distant television signals for 2014-2018. The proposed royalty rate was $1.06 per subscriber per month for 2014 for large retransmitters, increasing to $1.38 in 2018. The BDUs objected to the proposed tariff. The Collectives subsequently increased the proposed royalty rates sought. The Board used a proxy approach to set the royalty rate. It fixed a rate of $1.06 for 2014, increased to $1.17 for 2018.

HELD: Application by BDUs dismissed; application by the Collectives allowed in part. The Board did not err by not adjusting for simultaneous substitution or relative viewing. There was no precedent that required the application of a stand-alone simultaneous substitution adjustment. The Board’s findings that no relative viewing adjustment was necessary and that there was no reliable data with which to make it were open to it on the record. It did not err in its determination of the appropriate program substitutability adjustment. The Board erred by using an incomplete and superseded version of the payment data in its calculations. It erred by using the wrong profit margin figure in its calculations, based on a mistaken reading of the expert evidence. The Board did not err by applying downward adjustments for input and overhead costs and market power. The Board did not fail to properly apply the principles of procedural fairness in capping the 2014 and 2015 royalty rates. The matter was remitted to the Board for recalculation.

Bell Canada v. Copyright Collective of Canada, [2021] F.C.J. No. 781, Federal Court of Appeal, D.J. Rennie, Y. de Montigny and M.J.L. Gleason JJ.A., July 22, 2021. Digest No. TLD-August232021007