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AUCC Letter to Board

AUCC Letter to Board

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Published by Ariel Katz
AUCC submission to the Copyright Board replying to Access Copyright's response.
AUCC submission to the Copyright Board replying to Access Copyright's response.

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Published by: Ariel Katz on Jul 21, 2011
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07/21/2011

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Osler.

Hoskin & Harcourt LLP Suite 1900, 340 Albert Street Ottawa, Ontario, Canada K1R 7Y6 613.235.7234 MAIN 613.235.2867 FACSIMILE

OSLER
Glen A. Bloom Direct Dial: 613.787.1073 gbloom@osler.com Our Matter No: 1059568

July 19,2011
Ottawa Toronto

BY EMAIL
Montreal Calgary

New York

Mr. Gilles McDougall Secretary General Copyright Board of Canada Suite 800 - 56 Sparks Street Ottawa, Ontario KIA OC9 Dear Mr. McDougall:
Access Copyright Post-Secondary Educational Institutions Tariff, 2011-2013

We are writing to you on behalf of the Association of Universities and Colleges of Canada ("AUCC") pursuant to the Notice of the Board dated June 16, 2011. This letter constitutes AUCC's reply to the response of Access Copyright ("Access") by letter dated July 8, 2011 (the "Response") to AUCC's application to amend the Interim Tariff filed June 8, 2011 (the "Application to Amend").
Introduction

In the Application to Amend (page 1), AUCC explained the reason it made the application to amend the Interim Tariff. Access had recently refused to grant transactional licenses to post-secondary educational institutions in a blatant effort to force the institutions to operate under the Interim Tariff. The Response confirms Access's refusal to grant transactional licenses and confirms that the refusal is based on Access's decision to file the Proposed Tariff and "to establish the conditions under which users make copies of published works" (Response, page 11). Remarkably, Access did not respond to AUCC's reliance on the Board's assurance that the Interim Tariff would not be mandatory. To reiterate, in its reasons for granting the Interim Tariff, the Board stated at paragraph 45: An interim tariff does not force Institutions to pay royalties absent any evidence that they require a licence. A tariff applies only to those who need the licence; those who do not, need not pay. Under the general regime. which applies in this instance. users whose consumption patterns justify different rates remain free to secure, from Access or from others. transactional or other licences that will trump the tariff. The fact that the interim tariff can be modified at any

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Page 2 time ensures that Access will display good faith in such negotiations. Any misconduct on its part would necessarily be reported to the Board, which would take it into account in any further consideration of this matter. [footnotes omitted, emphasis added] AUCC submits that Access did not respond to AUCC's reliance on the Board's statement above because of its fundamental misunderstanding of the general tariff regime (sections 70.1 to 70.5 of the Copyright Act (the "Act"». Although rightsholders may refuse to license copyright in their works, a collective society such as Access cannot refuse to grant a license for the works in its repertoire. The Act protects against the abuse of monopolistic power by a collective society by providing, through section 70.2 of the Act, a means for a user to obtain a license to the works in the collective society'S repertoire. Recent events show that Access's attempt to force AUCC member institutions to operate under the Interim Tariff is clearly intended to eliminate competition in the granting of permissions to reproduce copies of published works. Access does not only compete with its affiliate rightsholders in the granting of permissions. NRC Research Press has recently announced that it has entered into partnership with Copyright Clearance Centre of Denver, Massachusetts, United States ("CCC"). CCC operates Rightslink®, a fast and easy way to obtain permission to make copies of published works. By forcing AUCC members to operate under the Interim Tariff, Access would eliminate competition in the university sector from CCC. In this reply AUCC will initially discuss Access's fundamental misunderstanding of the general tariff regime, illustrate by example the extremely punitive fees that Access is attempting to hold over AUCC members in order to force them into operating under the Interim Tariff, and then reply to the jurisdictional and substantive issues presented in the Access Response. The General Tariff Regime In the Response, Access states: (a) "Rightsholders (and, by extension, Access Copyright) should be free to decide if, and how, to licence their works" (page 3); "Rightsholders - and by extension - Access Copyright, should be free to decide. The general tariff regime is based on a collective society's right to establish the conditions under which users may make copies of published works" (page 11);

(b)

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Page 3 (c) "The amendments [AVCC's proposed amendments to the Interim Tariff] suggest that only Access Copyright has the obligation to license the use of works in a particular way" (page 14); and "Access Copyright's decision, itself, not to license on a transactional basis in the face of the Proposed Tariff providing for a blanket licence is a unilateral decision" (page 16).

(d)

The general tariff regime was established by the amendments to the Act enacted in 1988. These amendments removed a previous concern that the licensing of copyright by a collective society of rights of copyright owners (other than the public performance rights of composers and music publishers) would be contrary to the Competition Act. The 1988 amendments provided that where a "licensing body", since 1997 known as a "collective society", concluded an agreement authorizing a person to use the exclusive rights of copyright, the licensing body or that person could file the agreement with the Copyright Board of Canada (the "Board"). Section 32 of the Competition Actl did not apply in respect of such an agreement filed with the Board. The amendments further provided that the Director of Investigation and Research (the "Director"), now the Commissioner of Competition, could have access to an agreement filed with the Board, and if the Director considered the agreement contrary to the public interest, the Director could request the Board to examine the agreement'. Elimination of the concern over section 32, now section 45, of the Competition Act enabled Access and other licensing bodies to be established and to collectively license the exclusive rights of copyright of more than one copyright owner. As a protection against the undue exploitation of monopoly power by a licensing body, the 1988 amendments also provided that, where a licensing body was unable to agree on the royalties and related terms and conditions for the use of a work within the licensing body's repertoire, either the licensing body or the user could apply to the Board. The Board was embodied to fix the royalties and related terms and conditions with respect to such use". These amendments ensured that a licensing body would be obliged to negotiate licenses for the use of works in its repertoire. If it failed to do so, the prospective user could invoke the Board's jurisdiction to fix the royalties and related terms and conditions for the use of works within the licensing body's repertoire. In effect, where rightsholders decided to have their copyright administered collectively through a licensing body, their rights were subject to a compulsory license fixed by the Board if the licensing body and the user were unable to agree on the terms of use.
Now section 45 of the Competition Act.
2

The 1988 amendments may be found at S.C. 1988, c. 15, s. 14. These further provisions may also be found at S.C. 1988, c. 15, s. 14.

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Page 4 The Act was further amended in 1997. The amendments renamed a "licensing body" as a "collective society" and gave a collective society the option of either entering into agreements with users or filing a proposed tariff (section 70.12). The provisions of the Act that gave the Board jurisdiction to set the terms and conditions of an agreement between a collective society and a prospective user (now section 70.2) remained essentially the same as did the provision regarding the filing of agreements and the inspection of those agreements by the Commissioner (now section 70.5). At no time has Access been "free to decide if, and how, to license" the works in its repertoire. If Access refuses to grant a transactional license for a work in its repertoire or to negotiate such a licence in good faith, the Board may grant the transactional license upon request by the user.
The Financial Magnitude of the Access Threat to AUCC

The financial magnitude of the threat that Access is seeking to wield over AUCC members is best illustrated by an example. The royalty rate in the Proposed Tariff is $45 per FTE. The blanket license agreements with AUCC members provided for payment of $3.38 per FTE plus $0.10 per page for copies of published works sold to students (i.e. course packs). The Interim Tariff continues the royalty rate and structure of the blanket license agreements. The most recent information of AUCC is that in 2008 the average course pack fee per student was $15.26. Access has advised its publisher members that the Interim Tariff would apply if a post-secondary educational institution made just one copy of a repertoire work. In an email to Municipal World, the publisher of a monthly municipal publication, Access stated "must one copy of one page by one professor is sufficient to trigger the tariff' (see Appendix A, email from Andrew Simpson, Affiliate Relations, Access Copyright to Susan Gardner of Municipal World dated April 7, 2011 from Access's answers to AUCC interrogatory 28). In an email to Pearson Canada, Access stated "must one unlicensed copy of one page is sufficient to trigger the tariff' (see Appendix B, email dated April 26, 2011 from Andrew Simpson to Susan WallaceCox of Pearson Canada from Access's answers to AUCC interrogatory 28). Consider the University of Toronto, a large AUCC member, and the University of Victoria, a mid size AUCC member. The former has 66,611 FTEs and the latter has 17,632 FTEs. Therefore, if these AUCC members relied on their digital licenses, transactional permissions secured from the rightsholder or CCC and the fair dealing exception, but copied an extract of one published work in Access's repertoire without permission, they would be liable to Access for the academic year under the Interim Tariff in which the copy was made as follows: University of Toronto 66,611 x $3.38 = $225,145.18

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Page 5 University of Victoria 17,632 x $3.38 = $59,596.16 In the event that the Board certifies the Proposed Tariff at the royalty rate requested by Access, the University of Toronto and the University of Victoria would be liable to Access for the following additional amounts upon certification of the tariff: University of Toronto (66,611 x $45.00) - $225,145.18 University of Victoria (17,632 x $45.00) - $59,596.16
= =

$2,772,349.92

$733,843.84

Access is seeking to impose a threat of extremely punitive fees on AUCC members in order to force AUCC members to operate under the Interim Tariff and to achieve its objective of thereby eliminating competition in the granting of permissions from CCC and rightsholders. This is clearly contrary to what the Board had in mind in granting the Interim Tariff that "users whose consumption patterns justify different rates remain free to secure, from Access or from others, transactional or other license that will trump the tariff'. The Board has Jurisdiction to Amend the Interim Tariff Access claims that the Board has no jurisdiction to amend the Interim Tariff as requested by AUCC for three reasons. These are (1) the requested amendments fundamentally alter the Proposed Tariff, (2) the Board has no authority to compel Access to enter into a transactional license, and (3) issues relating to digital copying should be dealt with at the hearing of the Proposed Tariff. Each of these reasons does not stand up to scrutiny. It is clear that the Board has the power to certify a proposed tariff with such alterations to the royalties and related terms and conditions as it may determine appropriate (section 67.2(1». The Board's power to make alterations is broad. In its recent decision in SOC AN and Re.Sound Tariffs I.C (CBC - Radio) 2006-2011, July 8, 2011, the Board in effect concluded that it had the power to deal with a proposed tariff as it wished as long as it acts fairly with the collective society and users. In that case SOCAN and Re:Sound proposed tariffs for CBC radio. In one case the proposed tariff did not include simulcasting over the Internet and, in the other case, the proposed tariff expressly excluded simulcasting. The two collectives had filed separate tariffs that covered

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Page 6 simulcasting including simulcasting by the CBC. Despite the objections of the collectives, the Board certified the CBC radio tariffs to include simulcasting. At paragraph 121 the Board stated: Both collectives have filed proposed tariffs for CBC's simulcast of its radio service. The Board is free to deal with the proposed CBC simulcast tariff as it wishes, as long as it acts fairly with CBC and both collectives. CBC is a single user; as a result, everyone interested in the simulcast issue was present before us. CBC asked the Board to address the issue. The collectives knew of this. Fairness is satisfied. The decision in the CBC radio tariffs applies to these proceedings. In its reasons for granting the Interim Tariff, the Board alerted the parties to the possibility that the Interim Tariff could be altered. AUCC and the Association of Canadian Community Colleges ("ACCC"), representing substantially all of the post-secondary educational institutions, applied to amend the Interim Tariff. Access exercised its rights to make lengthy substantial submissions. Fairness is satisfied. In the Response, Access submits that the Board has no jurisdiction to change the fundamental nature of the Proposed Tariff "particularly on an interim basis with no evidence before it". However, it is clear that the Board has jurisdiction to grant an Interim Tariff based on no evidence (Board Reasons for the Interim Tariff, March 16, 2011 at paragraphs 64 and 64). The Interim Tariff fundamentally altered the Proposed Tariff by largely maintaining the status quo. If the Board can issue an interim tariff without evidence, surely it can amend an interim tariff without evidence. The second reason Access gives for the Board's lack of jurisdiction to amend the Interim Tariff as requested is that the Board has no jurisdiction to force Access to enter into a license with a post-secondary educational institution. It claims that that applies whether or not the institution has taken up the tariff (page 5). This second reason is based on Access's fundamental misunderstanding about the general tariff regime. There is no doubt that the AUCC's members listed on page 11 of the AUCC Application to Amend could have applied to the Board for a license under section 70.2 to copy the works for which Access refused transactional licenses. An amendment to the Interim Tariff to require Access to grant transactional licenses is a far more efficient means of obtaining the same result as a number of different institutions making many requests to the Board for licenses under section 70.2. In the Response Access refers to post-secondary educational institutions requesting transactional licenses for 1160 titles in 2010. It makes no sense to require institutions to make a comparable number of applications under section 70.2 for each year in which the

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Page 7 Interim Tariff is in place when the Board could address the issue in a single application to amend the Interim Tariff. Moreover, amending the Interim Tariff rather than making a final decision on licenses under section 70.12 is more favourable to Access. At the hearing of the Proposed Tariff Access would be able to rely on all of its evidence to establish the terms for making digital copies and the certified tariff would be retroactive to January 1, 2011. The certified tariff could therefore address any deficiencies in transactional licenses issued under an amendment to the Interim Tariff. The third reason Access gives for the Board's lack of jurisdiction to make the requested amendment is that the issues relating to digital copying should be dealt with at the hearing of the Proposed Tariff. In support of this reason Access refers to and relies upon a submission that AVCC made to the Board. Access has completely misstated that submission or taken extracts from the submission completely out of context. AVCC's submission does in no way support having the issue of granting a digital license through the Interim Tariff deferred to the hearing ofthe Proposed Tariff. In the Response, Access claimed that AVCC made the following representations to the Board (Response pages 6-7).
It is to be noted that the AVCC, in its submissions

responding to Access Copyright's application for an Interim Tariff, opposed inclusion of digital copying, and opposed reporting of digital copies because Institutions are not set up to deal with digital copying because of the decentralized nature of digital copying exacerbated because there is no point of sale where volume can be measured (AVCC Letter to the Board of January 21, 2011, p. 4-5). [emphasis added] In fact, AVCC did not oppose the inclusion of digital copying in the Interim Tariff and was not opposed to reporting of digital copies on grounds that AVCC's members were not set up to deal with reporting digital copies. What AVCC stated (AVCC letter to Board dated January 21, 2011 (the "January 21 Letter") point 9, page 4) was that if it was the Board's intent to have Schedule G (digital copying) operate by analogy to the other provisions of the tariff, payment for digital copying should only be required where a digital copy is made for sale. With respect to reporting, AVCC stated that reports should only be required where the digital copies are sold. This would maintain the status quo by analogy with respect to paper copies. At page 7 of the Response, Access states The AVCC also argued it is premature to set pricing for digital copying at the present time (AVCC Letter to the Board of January 21, 2011, p. 4). [emphasis added]

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Page 8 Nowhere in the January 21 Letter does AUCC submit that it was premature to set pricing for digital copying. What AUCC did submit was that payments should only be required where digital copies are made for sale (January 21 Letter, point 9, page 4). Access has pulled the notion of setting payment for digital copying out of the air, not out of the January 21 Letter. Access has quite inappropriately altered AUCC's statements in an attempt to support its claim that digital copying should be dealt with at the hearing. Access provides no other rationale for this third reason that the Board has no jurisdiction. Throughout the remainder of the Response Access continues to rely on its fictional account of the January 21 Letter. It is best to debunk that fiction at this point in this reply. At page 12 of the Response, Access states: The AUCC in its January 21,2011 submissions in response to the application for an Interim Tariff went to great pains (at pages 3 to 5) to explain the challenges that tracking usage of digital copies would create for universities, why reporting digital usage is impossible, and why a per page rate was inappropriate. What AUCC in fact submitted was that the rate and reporting obligations for making digital copies be analogous to the rate and reporting obligations for making paper copies (January 21 Letter, pages 3-5). Rather than saying, as Access contends, that reporting for digital copying is impossible, AUCC was advocating for a requirement for reporting for digital copying on a basis analogous to reporting for paper copying. Finally, at page l3 of the Response, Access states: The AUCC has also complained about the "onerous" reporting requirements attached to the making of Digital Copies (AUCC, Submission to Copyright Board on Interim Tariff, January 21,2011). AUCC was not submitting that reporting digital copies was onerous. As indicated above, AUCC was arguing in favour of reporting requirements analogous to report for paper copies. Under the blanket license agreements, there were no reporting requirements for the making of paper copies under clause 2(a). The ease or difficulty of reporting the making of those paper copies would be the same as reporting the making of digital copies, other than digital copies made for sale. To conclude on the issue of the Board's jurisdiction, none of the reasons furnished by Access to attack the Board's jurisdiction to make the requested amendments to the
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Page 9 Interim Tariff are sound. The fact that the Board has that jurisdiction is clearly demonstrated in its recent decision in SOC AN and Re:Sound Tariffs I.C (CBC-Radio)
2006-2011. AVCC Seeks to Change the Status Quo

The first substantive issue addressed in the Response is that, in its requested amendments to the Interim Tariff, AVCC is seeking to change the status quo. The status quo relied upon by Access is the following: (a) Access never granted a transactional license to a post-secondary educational institution for copying published works within the limits of the blanket license agreements; and Access never granted a transactional license to a post-secondary educational institution that did not have a comprehensive license for paper copying requiring payment of the FTE rate.

(b)

Access has described the status quo in such a way to technically support its claim. Access does, however, ignore the fact that all AVCC members outside Quebec had a blanket license agreement with Access. The circumstances under the Proposed and Interim Tariffs are however different. Seventeen out of 77 AVCC members located outside Quebec elected to opt out of the Access tariff as of January 1,2011 and instead to justify their copying practices by relying on their digital licenses, transactional permissions and exemptions under the Act. The proper status quo comparison is that, before January 1, 2011, AVCC members had the option of relying on transactional licenses from Access and rightsholders or securing a blanket license agreement from Access. Access has removed that option in seeking to force AVCC members to operate under the Interim Tariff. Furthermore, in its Reasons for the Interim Tariff, the Board anticipated that the option of post-secondary educational institutions to secure transactional licenses from Access would continue. AVCC has made its application to amend the Interim Tariff because, through inappropriate use of its monopoly power, Access now denies transactional licenses to AVCC members. Also in support of its claim that AVCC is seeking to change the status quo Access relies on what it claims was AVCC thwarting "every attempt [by Access] at implementing a blanket digital licence" and "AVCC's long-standing refusal to negotiate a blanket licence" (Response, page 8). Even if this was correct, it is irrelevant to the status quo issue advanced by Access. However, unfortunately for Access, these statements are not correct.

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Page 10 In our letter dated December 10,2010 in response to Access's application for an Interim Tariff, we detailed the steps Access took to "renegotiate" the AUCC model license (see pages 8 and 9). Access never made a bona fide attempt to renegotiate the license and include digital copying. An exchange of emails on January 18,2010 from Steve Wills of AUCC to Brian O'Donnell of Access makes this clear (see Appendix C). AUCC required board approval to enter into negotiations to respond to the one page proposal that Access only put to AUCC on October 21, 2009. The board did not give that approval in its January 2010 meeting and instead requested further information. AUCC expected to receive final instructions during its April 2010 board meeting. Instead of pursuing negotiations following the board meeting Access filed the Proposed Tariff and did not approach AUCC following its April 2010 board meeting. Access also relies on a 1997 memoranda (Response, Appendix A) concerning an addition to the blanket license agreements to authorize activities in a U.S. guideline for educational multimedia. Whatever those additions were, it is clear that digital copying in 1997 did not have the same significance as digital copying has had over the last few years. Access also relies on a statement in a library association bulletin (Response, Appendix B). This circular shows that Access was attempting to circumvent AUCC and undermine its negotiating strategies by approaching AUCC's members to participate in a scanning license pilot project. AUCC quite properly advised its members that there was no urgency to take up the pilot project in view of the blanket licenses in place until August 31,2010 The last renegotiation of the AUCC model licence was in 2003. Access has not shown that it made any attempt to incorporate a digital component into that license. The model license at that time was up for renewal in 2007. No negotiations took place because Access elected to permit the blanket license agreements to renew automatically on existing terms. The above facts all show that AUCC did not thwart "every attempt [by Access] at implementing a blanket digital licence" and that AUCC did not maintain "a long-standing refusal to negotiate a blanket licence" as contended by Access. In the Response, Access acknowledges that comprehensive and transactional licenses can co-exist. They do so at present in the corporate for-profit sector. Access points out no difficulties with the co-existence of those licenses in that sector. Instead it decries what it calls AUCC's a-la-carte menu for post-secondary institutions (Response, page 9). This ala-carte menu is precisely what is required because AUCC members' "consumption patterns", to use the Board's terminology, differ. Different rates and different arrangements are required to avoid the extremely punitive results that Access seeks (see the examples of the University of Toronto and University of Victoria above).

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Page 11
Access is not Free to Decide

The second substantive issue addressed in the Response is Access's claim that it has the right to establish the conditions under which users make copies of published works. This claim is based on Access's misunderstanding of the general tariff regime discussed above. Access's ability to establish those conditions is subject to section 70.2 and a user requesting the Board to set the royalty and related terms and conditions of the license. Also in support of this issue Access claims that it "has never told its affiliates, including publishers, not to issue transactional licenses to Institutions". In fact, Access has recommended to its publisher affiliates who are contacted directly by post-secondary institutions for permissions "that you let the educational institution know that they are covered by the Interim Tariff and contact Access Copyright for more information". This recommendation is contained in Access's circular to its publisher affiliates attached as Appendix D of the Response. Access did not however attach to the Response its emails which form Appendix A and Appendix B of this reply which set out what it told its publisher affiliates Municipal World and Pearson Canada. It told the following to Municipal World (Appendix A): When you receive requests we suggest you take the position that the tariff is your chosen business model for digital permissions
It told the following to Pearson Canada (Appendix B):

Our hope is that all requests for users that are covered under the tariff will be referred to us. We suggest you tell the universities that the interim tariff is your chosen business model for post-secondary permissions - take it or leave it. What we do not know is what Access has told its other publisher affiliates in separate communications. Access decries transactional licenses because they are "entirely dependent on selfdetermination by an Institution" and refers to the "extremely low" number of requests in 2010 for transactional licenses for digital copying, "a mere 1160 titles" (Response, page 10). Given the extensive digital licenses available to AUCC members and the inconvenience of scanning to obtain a digital copy, this low amount is not surprising. Although Access refers to the digital license agreements that AUCC has with publishers, it completely misunderstands the scope of those licenses. Access states that "in reality, none of those licenses covers the scanning and uploading of printed books, magazines,
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Page 12 and newspapers". This is not the case. The CRKN license agreement with Elsevier B.V. (Appendix D), one of the largest publishers of academic periodical publications in the world, permits an institution to make and provide single copies of single articles upon request to individual Authorized Users (clause 3.1.4). There are no restrictions on making these electronic copies from the database made available by the publisher. These copies can also be made by scanning from paper copies. Furthermore, interlibrary loan use specifically contemplates scanning (clause 4.1). Other consortia agreements reflect these terms of the agreement with Elsevier B.V. Access goes on to state that the '''transactional system' is an unacceptable model for rightsholders" (Response, page 11). What Access does not explain is how it is an unacceptable model for post-secondary educational institutions, but apparently a fully acceptable model for the corporate for-profit sector. Finally, Access claims compliance problems with transactional licenses and refers to the problems of educational institutions ensuring that all uses by professors and students are licensed. Apparently these compliance problems are problems unique to post-secondary educational institutions. Access makes no reference to compliance problems in the corporate for-profit sector and gives no indication why compliance problems are unique to those institutions. Perhaps the concern relates to student copying. But AVCC members have no obligation to ensure that all uses by students are licensed. The only liability that an AVCC member would have for students making copies of published works in Access's repertoire, is that copying which is authorized by the member.

The Challenge Presented by Digital Copying can be Addressed through Transactional Licenses
The fourth substantive issue in the Response is Access's claim that the challenges presented by digital copying cannot be addressed through transactional licenses. Access's practices in granting transactional licenses for digital copying demonstrate that this is not the case. Access opens its discussion of this issue by referring to an AVCC's submission to the Board that by making a digital copy, or scanning a paper copy into electronic form is of marginal value (Response, page 11). As is evident from the quote from the AVCC submission in the Response, AVCC was only speaking of making digital copies by scanning. Having regard to the electronic environment of today's world, particularly in post-secondary educational institutions such as AVCC's members, access to a digital file is what the user requires. This cannot be obtained from Access. Publishers provide access to digital files through electronic databases of their publications. In comparison, making a digital copy by scanning from, e.g. a book, is of marginal value. The labour costs, inconvenience and delay in scanning from a book illustrate this marginal value. But the

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Page 13 fact that scanning from books may be of marginal value does not lead to the conclusion that scanning has no value to AUCC members. Scanning from a publication not available in electronic form may be desirable. In that case, an AUCC member may require a transactional license from Access where the member is unable to locate or obtain a timely response from the publisher and the work is not within CCC's repertoire. Access makes reference to its years of experience and its conclusion that "a transactional business model for the use of digital works does not ensure that rightsholders get paid for the uses of their works" (Response, page 12). That business model is however used by Access in the corporate for-profit sector and Access has given no reason why it is not satisfactory. Another contention by Access is that a per page basis for payment for digital copying is not practical (Response, page 12). There is no basis for this statement. Access imposed a per page payment for transactional licenses granted to AUCC members in 2010. The transactional license granted to the University of Manitoba referred to in the email communications in Appendix F of the Application to Amend was $0.15 a page plus a five per cent administrative fee. The transactional licenses that Access grants to the corporate for-profit sector is also based on a per page rate (Response, Confidential Appendix 1). Access claims that tying payment for making digital copies to reporting is not practical (Response, page 13). Yet this is precisely how a transactional license operates. Payment is made based on a report of the number of pages to be scanned. Access claims that $0.10 per page for digital copying would not maintain the status quo ante. AUCC agrees. The status quo ante was $0.15 per page plus a five per cent administrative fee (Application to Amend, Appendix 5). AUCC requests that this per page rate be set for the amendment to the Interim Tariff. Access Anti-Competitive Acts

The fourth issue raised in the Response is Access's claim that its conduct has not been anti-competitive. In the Response, Access refers to refusal to deal, abuse of dominance or tied selling, and conspiracy under sections 45 and 90.1 of the Competition Act. AUCC has no information at this time that would support a claim of tied selling or section 45 conspiracy. Access reiterates its claim that it has not "told its affiliates, including publishers, not to issue transactional licenses to Institutions". We have addressed this issue and provided above what Access has told its publisher affiliates. These statements are clearly intended to convince its publisher affiliates not to grant transactional licenses to post-secondary educational institutions in an attempt to cause those institutions to operate under the Interim Tariff.
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Page 14 In the Application to Amend, we made reference to Access having non-exclusive rights. It therefore competes with its affiliates in granting permissions to copy their published works. Since filing the application, AUCC has learned that NRC Research Press has recently entered into a partnership with CCC. NRC Research Press is the foremost scientific publisher in Canada. Under this partnership users can obtain fast and easy transactional licenses from CCC using its Rightslink® service. Extracts from NRC Research Press announcing the partnership and describing the Press are included at Appendix E. CCC is also therefore a competitor of Access. By seeking to force postsecondary educational institutions to operate under the Interim Tariff, Access is seeking to exclude CCC from the competition for granting permissions to reproduce published works for that educational sector. This is clearly an anti-competitive act.
Professor Katz's Suggested Remedy

AUCC makes no reply to Access's response to Professor's Katz's suggested remedy for Access's anti-competitive acts.
Conclusion

AUCC requests that the Board grant the amendment to the Interim Tariff requested in the application with the exception of the per page rate for the making of digital copies. The per page rate for digital copies should be $0.15 per page plus a five per cent administrative fee. If the Board decides to grant the requested amendment, AUCC suggests that the Board consider giving the parties an opportunity to provide input into the wording of the amendment in a way comparable to the input provided by the parties to the amendments to the Interim Tariff to specify the term to be based on an academic year. Yours very truly,

Glen A. Bloom
GAB:cms Enclosure c. Aidan O'Neill and Wanda Noel, ACCC Ariel Katz, Professor at U of Toronto Rick Theis, CASA David Fewer, CAUT and CFS Sean Maguire, Student, Saint Paul University Jason Fung, Government of Alberta Nancy Brooks and Randall Hofley, Access Copyright

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