ARCHIVED — A Mike Montour

COPYRIGHT REFORM PROCESS

REPY COMMENTS

---

Documents received have been posted in the official language in which they were submitted. All are posted as received by the departments, however all address information has been removed.

---

Reply comment from Mike Montour received on October 23 2001 via e-mail

Subject: Comments on Submissions regarding Copyright Reform Process

Mike Montour
(Contact information removed)

October 22, 2001

Comments - Government of Canada Copyright Reform
c/o Intellectual Property Policy Directorate
Industry Canada
235 Queen Street
5th Floor West
Ottawa, Ontario

Responses to Submissions Regarding Canadian Copyright Reform

I appreciate the opportunity to present comments on some of the submissions regarding the Canadian Copyright Reform process, and I would be interested in participating in any further discussions on this topic. The issues are very important to me, particularly as they relate to the academic freedom to discuss and examine security and encryption technologies, and to use networked personal computers to store and manipulate my legally-obtained data without the involvement or interference of content-industry associations.

---

1. Response to Electronic Frontier Canada

http://strategis.ic.gc.ca/SSG/rp00559.html - Commenting on "Consultation Paper on Digital Copyright Issues"

I feel that this is a very good submission, and that the authors have a solid understanding of the technical issues relating to digital copyright measures. The submission correctly identifies several potentially harmful side-effects of DMCA-style legislation. In general I support the proposals put forward in this submission, and I feel that implementing these or similar proposals would be in the best interests of Canadian society.

---

2. Response to Canadian Association for Interoperable Systems

http://strategis.ic.gc.ca/SSG/rp00326.html - Commenting on "Consultation Paper on Digital Copyright Issues"

I feel that this is a very good submission, and that the authors have a solid understanding of the technical issues relating to digital copyright measures. The submission correctly identifies several potentially harmful side-effects of DMCA-style legislation, and highlights many flawed assumptions inherent in such legislation. In general I support the recommendations put forward in this submission, and I feel that implementing these or similar guidelines would be in the best interests of Canadian society.

---

3. Response to Canadian Recording Industry Assocation

http://strategis.ic.gc.ca/SSG/rp00249.html - Commenting on "Consultation Paper on Digital Copyright Issues"

In general I oppose the conclusions and recommendations of this submission, as I feel the intent is to preserve the profitability of their existing business models at the expense of Canadian society as a whole. Other first-round submissions have already expressed such concerns so I shall not repeat them all here. However I do wish to address one statement:

For example the global pirate music market topped 1.8 billion units in 2000, worth an estimated US$4.2 billion. Piracy not only hurts right owners, but also destroys legitimate jobs and deprives governments of substantial tax revenues.

I ask the Canadian Recording Industry Association to justify this estimate with supporting background material, and I ask the governemnt not to attach any weight to this assertion unless such background material can be examined and verified. It should not be accepted without question merely because it dangles a tempting "carrot" in the form of "substantial tax revenues".

A common way of arriving at such figures is to estimate the number of pirated copies of a work in existence, and multiply that number by the full retail price of the work in question[1]. However such a calculation is highly misleading.

The set of all people possessing a copyrighted work can be divided into three subsets as follows:

1. People who would have purchased a retail copy of the work at the price at which it was offered, but chose not to because a pirated version was available to them at a lower cost.
2. People who would not have purchased a retail copy of the work at the price at which it was offered, regardless of the availability of the pirated version.
3. People who would not have purchased a retail copy of the work at the price at which it was offered, but who subsequently purchased a retail copy or other associated merchandise because of their exposure to and favourable impression of the pirated work.

The first category truely represents a "lost sale". However, as with the case of shoplifting in the retail industries, a certain percentage of lost sales is inevitable and must be regarded as a "cost of doing business". I do not condone the actions or defend the people involved, but I recognize that 100% elimination of the activity would not be practical unless it severely infringed on the rights of innocent consumers (e.g. a strip-search when leaving every store).

The second category merely represents a segment of the market for whom the work was not worth the asking price. This is not a "lost sale", merely a consequence of the price points established by the industry in accordance with economic principles of supply and demand. Industries could sell into this segment by, for example, reducing the average price of a CD to $10, or by charging higher prices for "new release" CDs than for older works. However they choose not to do so, feeling that they can maximize their profits by charging a higher price with a correspondingly lower sales volume. This is their choice, but it does not entitle them to any "compensation for lost sales".

The third category is interesting because it actually represents sales gained because of piracy. This is a substantial category; many users who are exposed to a band's music through a "pirated" version will like what they hear, and will go on to purchase additional recordings, concert tickets, etc. An accurate estimate of the losses caused by piracy must perform this sort of analysis, and must offset the category 1 "lost sales" with the category 3 "gained sales". It is possible that in some cases the outcome could be that piracy was a net benefit to the industry, as it represents a free advertising and promotional channel.

[1] I cannot tell what formula was used here, and it depends on how the "1.8 billion units" are defined -- is a "unit" a single song, or a full CD? If a "unit" is a "song" this would work out to about US$16 for a CD of 7 songs -- reasonably close to the retail price of a CD.

---

4. Response to DirecTV Inc

http://strategis.ic.gc.ca/SSG/rp00759.html - Commenting on "Consultation Paper on Digital Copyright Issues"

In general I oppose the conclusions and recommendations of this submission, as I feel the intent is to preserve the profitability of their existing business models at the expense of Canadian society as a whole. This is particularly relevent in this case, because to the best of my knowledge DirecTV does not even offer its services to Canadians. Surely an organization advocating draconian legal measures in a particular jurisdiction, has some moral obligation to at least do business in said jurisdiction?

With the global nature of the Internet (and communications in general), it is unreasonable to restrict the publication of information that is legal in the jurisdiction of its publication, merely because its reception in illegal in another jurisdiction. Should Canadian laws prohibit Canadian websites that discuss how to home-brew beer, because that activity might be illegal in some other country?

DirecTV accuses Canadian companies of selling circumvention devices to US customers. If the possession of such devices is illegal in the United States, then criminal proceedings should be initiated in the United States against the owners or commercial importers of such devices. If a US company is selling such devices through a Canadian store-front, that US company can still be attacked in the US through court injunctions, seizure of bank accounts, etc. Another deterrent would be for US credit card companies to refuse payment to any Canadian company that sold a circumvention device to a US billing address - with no way to collect payment, Canadian companies would no longer be willing to sell devices in this manner.

The submission warns that Canada risks becoming known as a "piracy haven". I counter that this reputation might more accurately be that of a "freedom haven", and that I would be proud to live in a country so identified. Such a reputation would become increasingly important and beneficial as other nations such as the USA pass oppressive legislation like the DMCA, and academic researchers and software developers are forced to find other areas to carry on their formerly-legal academic and commercial activities. If Canada strongly asserts its sovereignty and defends measures such as the analysis, discussion, and reverse-engineering of devices (including those that can be used as "circumvention devices"), Canada could be seen as a very attractive location to live and to do business. Canada already has a strong copyright law, and is far from being a "piracy haven". We don't deserve the label, and we shouldn't change our laws just because someone tries to intimidate us with it.

---