Assessing the Economic Impact of Copyright Reform in the Area of Technology-Enhanced Learning

Intellectual Property Policy

8. Conclusions

While, using available information, it is not possible to estimate the costs and benefits of changes in the provisions of the Copyright Act pertaining to education, it is possible to assess the relative size and significance of various positive and negative economic impacts. The proposals examined in this report would extend a number of the exceptions in the current Act to distance education and increase the list of educational exceptions to include the showing of films and videos and the use of lawfully circulated material that is freely available on public Internet sites. The report also considered the merits of a conditional exception that would be terminated when and if the requirements of educational institutions could be met through blanket licences. A conditional exception creates the incentive for strategic responses by stakeholders and would be very difficult to successfully implement. All the proposed reforms for extending exceptions to distance education and expanding the list of educational exceptions, however, are likely to produce significant benefits and have negligible economic costs.

The largest gains are likely to result from allowing educational institutions to freely access content that is lawfully available on public Websites. This would allow the Internet to become a more important learning resource and it would help to address the apparent "digital disconnect" between students’ use of the Internet at school and at home. A reform facilitating Internet use by instructors would support the development and growth of online learning, which, in the view of many, is a key to Canadians’ successful adaptation to the requirements of a knowledge–based economy. The reform of copyright law would complement technological changes that are making it easier for those who want to charge for the use of their materials to limit access and to negotiate licences on terms they find agreeable.

The main benefit from the other reforms would similarly come from encouraging schools to make greater use of certain materials that can confer gains well in excess of their costs of production. Under the existing law, various factors have limited use of these materials. In the case of the items and activities addressed in Sections 29.4, 29.59(c) and 29.6(1) of the Act, distance education instructors have been deterred from seeking licences because of the preparation and advance planning this would require. The relevant items are supplementary materials that are only likely to be considered by instructors as a late addition to their classes. In the case of musical recordings, the complicated pattern of ownership rights and the difficult and lengthy processes involved in obtaining clearances have discouraged their use in distance education classes. For films and videos, the limiting factor has been budgetary constraints, which have been more significant for some schools and some departments than others.

Although other benefits would result from extending and expanding the educational exceptions in the Act, most of these gains are likely to be small. This is because existing licensing activity in the relevant areas is generally quite low and, hence, there are not major gains to be realized from lowering transactions costs and reducing payments to foreign copyright owners. A reform that provided an exception for the showing of films and videos by educational institutions, however, would yield some notable savings in the payments by Canadians to foreigners.

The proposed reforms would be unlikely to have any appreciable effect on incentives for the creation of intellectual works. A change in copyright law is only likely to affect incentives, if financial returns are an important consideration for creators and the reduction in protection would reduce the returns below the level necessary to attract individuals to the creative pursuit and/ or to induce them to engage in further activity. Some of the content being examined was not produced to generate financial gains. In the case of all the content under consideration, the potential decline in revenues from "excepting" Canadian educational institutions would be very small and have an insignificant impact on expected returns to producers and creators. In the context of the overall North American or global markets for which much of this content is produced, Canadian educational institutions constitute a minute market segment. The situation is, of course, different for materials produced expressly for the educational market, which presumably would continue to be excluded from any exception in the Act.

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