I’ve been in contact with lawyer Andy Kaplan-Myrth in order to learn more about SOCAN’s Tariff No. 22. He explained what Podcasters should know about this tariff and his comments are summarized below. Note that this post is a plain-english summary of what the tariff says, not legal advice.

Andy started off by providing some background on the tariff and its origins.

Back in 1996, The Society of Composer, Authors and Music Publishers of Canada (SOCAN) asked the Copyright Board of Canada to approve their Tariff 22, which would have compensated their members by charging Internet service providers for the music that crossed the providers’ networks. The Copyright Board denied the request because ISPs simply provide the means of communication and are not liable for the information that crosses their networks.

Federal Court agreed, except with respect to caches — the Copyright Board had found that caches were necessary for Internet transmission and therefore not liable for the tariff; Federal Court disagreed and tariffed caches.

In 2004, The Supreme Court of Canada threw out SOCAN’s case, including the cache issue, finding that the ISPs’ services are simply a means of telecommunication — not subject to a tariff.

Michael Geist has a great article about this, called The Real Threat to the Music Download Market, from April 18, 2005.

SOCAN is trying again. This time the organization is going after the sites that post the content, rather than the intermediary ISPs. They have redrafted their Tariff 22 proposal and submitted it for 2006, and have now modified it for 2007. They are still waiting for the hearing which will be (mark it in your calendar!) April 17, 2007 at 10:00am.

Now that you have the background, here are the key points of the current draft:

  • Tariff No. 22 applies only to songs for which SOCAN has licensing rights.
  • SOCAN licenses performances only. So, this tariff only covers one piece of the puzzle. SODRAC and CMRRA license reproductions. These organizations have a proposal for licensing reproductions, which may only apply to commercial radio stations (including their Internet-based broadcasts).
  • The SOCAN fees are based on a formula. Since most Podcasters make no money for their Podcasting activities, the SOCAN fees will be the minimum, $200/month.
  • While it is always possible that SOCAN will want the fees to be applied retroactively to 1995, it is far more likely that this is not the case. Certainly, trying to identify and collect licensing fees from that far back will be an ominous task.

In the same way that Apple strong-arming the word “Pod” may move people away from using the word Podcast, perhaps Tariff No. 22 will encourage broadcasters to use more independent or Creative Commons licensed works for which they won’t be required to pay tariffs.