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November 29, 2013 VIA EMAIL

Nancy Brooks Partner Dir: 613-788-2218 nancy.brooks@blakes.com Reference: 00071273/000007

Copyright Board of Canada 800 56 Sparks Street Ottawa, ON K1A 0C9 Attention: Gilles McDougall, Secretary General

Dear Mr. McDougall: RE: Access Copyright Post-Secondary Educations Institution Tariffs (2011 2013 and 2014-2017)

In accordance with the Boards notice of November 22, 2013, this letter constitutes the reply of Access Copyright in its application to consolidate the 2011-2013 Proposed Tariff proceeding and the 2014-2017 Proposed Tariff proceeding. In this letter, we address the submissions of Professor Katz and Mr. Maguire made on November 21, 2013 and the submissions of the Canadian Association of University Teachers (CAUT) and the Canadian Federation of University Students (CFS) made on November 25, 2013. 1. The timing of this Application

Professor Katz alleges1 that the timing of Access Copyrights application to consolidate smacks of ambush tactics and he suggests that Access Copyright should have applied for consolidation in March 2013 when it filed the 2014-2017 Proposed Tariff, or even much earlier. There is no merit to either the allegation or the suggestion. As long as the Association of Canadian Community Colleges (ACCC) was an Objector, Access Copyright believed that the interrogatory process would produce information of relevance and utility to the 2014-2017 Proposed Tariff proceeding, e.g. information on copying, licensing or other activities of its member Institutions. This will no longer be possible with the withdrawal of the ACCC from the 2014-2017 Proposed Tariff proceeding on October 25, 2013. With respect to Professor Katzs suggestion2 that Access Copyright should have raised the issue of consolidation in its response to his Reference Application, the two applications raise entirely distinct issues. Access Copyrights position has been consistent in both applications there is no need for any delay in the Boards process. In the Reference Application, Access Copyright rejected the suggestion that the hearing be delayed as requested by Professor Katz and others for the reasons given in its response to the Reference
1 2

A. Katz Letter dated November 21, 2013 (Katz Response), 1 -8. Ibid. 4-8.

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Application.3 Likewise, here, Access Copyright believes that indeed, its application to consolidate is expressly premised on the view that the hearing need not be delayed in the event the Board orders consolidation. Regarding Professor Katzs suggestion4 that Access did not disclose in the Reference Application that it would be seeking to adduce a supplemental report of NERA, this issue was entirely irrelevant to the Reference Application. Access Copyright is not only entitled but obliged, in making an application to consolidate, to indicate to the Board what it believes would be required by way of additional evidence should its application be granted. Professor Katz suggests that consolidation would benefit only Access Copyright. This is not so. Access Copyright and the Objectors in the 2014-2017 Proposed Tariff proceeding CAUT and CFS will avoid a second, separate costly proceeding a benefit seemingly recognized by CAUT and CFS. Moreover, judicial economy and efficiency will be served. Consolidation will also provide greater rate certainty for Institutions since the terms of the 2014-2017 Tariff will be known closer to the date the Tariff takes effect. In sum, Access Copyright has not used ambush tactics. Rather, having considered carefully the consequences of the withdrawal of the ACCC as Objector, Access Copyright applied for consolidation in a timely and reasonable manner in all the circumstances. 2. There are no new factual or legal issues

We note that neither Professor Katz nor Mr. Maguire are Objectors in the 2014-2017 Proposed Tariff proceeding, therefore they have no standing to object to the terms of that tariff or issues arising in relation to that tariff, and any objections they make in this regard are irrelevant and should be disregarded. The only issue on which they may legitimately take a position in the within application is whether the proceedings would be unreasonably complicated or lengthened by the consolidation. This is not the case. As for the length of the consolidated hearing, we reiterate that the Board can expect that the entire length of the consolidated hearing would likely fit within the time originally set aside for the 2011-2013 Proposed Tariff proceeding. With respect to complication arising because of consolidation, consolidation will have minimal or no impact on the complexity of the 2011-2013 Proposed Tariff proceeding. The, minimal, new evidence arising from consolidation would be adduced in relation to the 2014-2017 Proposed Tariff only, and therefore would have no impact on Access Copyrights case (or Professor Katzs or Mr. Maguires respective responding cases) in relation to the 2011-2013 Proposed Tariff. Professor Katz argues5 that new issues of fact must be raised in relation to the 2014-2017 Proposed Tariff because, otherwise, Access Copyright would have no need to file any new evidence. As noted above, Professor Katz has no standing in relation to the 2014-2017 Proposed Tariff. Regardless, Access Copyright disagrees with his position. As explained in the application to consolidate, the tariffs are essentially identical but for the royalty rate. To support the royalty rate in support of the 2014-2017 Proposed Tariff, Access

3 4

Brooks' letters dated November 7 and 11, 2013. Katz Response, 5. 5 Ibid. 9-12.

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Copyright would need to file, minimal, new evidence in the form of a supplemental report from NERA to deal with valuation of the 2014-2017 Proposed Tariff. All respondents have expressed concerns about the addition of making available to the public by telecommunication to the definition of copy in the 2014-2017 Proposed Tariff and submit that new evidence will be required on this issue. Professor Katz also objects that this addition raises a new legal issue. Again, he and Mr. Maguire have no standing to object to the terms of this Proposed Tariff. In any event, Access Copyright maintains that the making available right in the 2014-2017 Proposed Tariff does not raise any new factual or legal issue. No new facts are required or will be introduced to support the inclusion of the words making available to the public by telecommunication", nor are any new facts possessed by Access Copyright of relevance to this issue (such as would be available through interrogatories). Access Copyright obtains its rights from its affiliation agreements and through agency by ratification and the 2011-2013 case, as filed by Access Copyright, already provides the factual basis with respect to these issues. Similarly, there is no novel factual question underlying the inclusion of the words making available to the public by telecommunication. Access Copyright submits that, for example, "posting a link or a hyperlink to a Digital Copy" triggers both the making available right and the reproduction right. Since the act of "Posting a link or a hyperlink to a Digital Copy" are included in the 2011-2013 Proposed Tariff, there is no new factual issue before the Board arising from the words by telecommunication. Moreover, there is no new legal issue raised by the inclusion of the making available right. The Board only has to decide whether the inclusion of the words "making available to the public by telecommunication" adds value to the tariff or changes the uses permitted. The uses are identical to those in the 2011-2013 Proposed Tariff. Even if a novel legal issue were raised through the addition of the words "making available...", neither Professor Katz nor Mr. Maguire are Objectors in the 2014-2017 Proposed Tariff proceeding and they need not indeed have no standing to address the legal issue. In any event, as no new facts will be adduced by Access Copyright in relation to the making available right, the Objectors CAUT and CFS are not prejudiced. Like Access Copyright, they will be entitled to make legal submissions on this aspect of the tariff, if they choose to do so, much later in the proceedings. It is noteworthy, in this regard, that the Board is already engaged in a proceeding6 which will address the scope of the making available right, which proceeding may result in a decision of application to the 2014-2017 Tariffs proceedings. 3. New evidence in the 2014-2017 Proposed Tariff proceeding will be minimal

Professor Katz argues7 that Access Copyright will have to file further evidence or, in effect, its case will be deficient. In his view, apparently, the sufficiency of the evidence filed as part of Access Copyrights case is questionable. Of course, the quality and sufficiency of Access Copyrights evidence is Access Copyrights responsibility, not that of Professor Katz. Access Copyright is entitled to put in its case and its evidence as it sees fit.

CSI - Online Music Services (2011-2013); SOCAN Tariff 22.A - Online Music Services (2011-2013); SODRAC Tariff 6 - Online Music Services, Music Videos (2010-2013). 7 Katz Response, 10-12.

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With respect to Professor Katzs apparent belief8 that Access Copyright ought to have disclosed to the Board that the University of Toronto (U of T) and the University of Western Ontario (Western) licences are up for renewal effective January 1, 2014, this was in fact disclosed in Access Copyrights case,9 but what happens after January 1, 2014 is not relevant to the 2011-2013 Proposed Tariff. Professor Katz appears to be challenging the merits of Access Copyrights 2011-2013 Proposed Tariff case, which Access does not propose to respond to now. Rather, it will respond as appropriate in due course as the process requires. As for the 2014-2017 Proposed Tariff proceeding, if new licences are entered into with U of T and/or Western, Access Copyright will need to consider whether, how and when the new agreements would be incorporated into its 2014-2017 case. Similarly, if agreement is not reached on a licence renewal, Access Copyright will have to consider whether it will need to introduce any new evidence into its case. However, it would need to do this regardless of whether or not the proceedings are consolidated. As the NERA supplemental report (relevant only to the 2014-2017 Proposed Tariff) does not affect the Objectors case to be filed in respect of the 2011-2013 Proposed Tariff, there should be no delay past December 20, 2013 for CAUT, CFS, Professor Katz or Mr. Maguire to file their case in the 2011-2013 Proposed Tariff proceeding. CAUT and CFS argue they would need to review and reply to the supplemental NERA report in relation to the 2014-2017 Proposed Tariff. We agree, of course. Access Copyright would be prepared to consent to January 10, 2014 as the date by which CAUT and CFS (the only Objectors who would be responding to NERAs supplemental report) would file their case in respect of the 2014-2017 Proposed Tariff. Access Copyright proposes it would file its reply thereto on the same date as its reply for the 2011-2013 Proposed Tariff. 4. Procedural Issues

CAUT and CFS express concerns about the viability of the present process given the absence of any institutional objectors from proceedings [sic] arguing that as the sole organizational objectors they are illequipped to participate in the Board proceedings as presently constituted. As a remedy, CAUT and CFS suggest that Parliament has empowered the Board to act as an objector. These concerns of CAUT and CFS are not relevant to the issue before the Board on this application to consolidate and should be disregarded for that purpose. We note that the Act does not specify there must be any objectors for the Board to fulfill its mandatory obligation to consider and certify a fair and equitable tariff. The Board will assume the role it deems appropriate in the proceedings. It is apparent from the degree of involvement of the remaining Objectors to the 2011-2013 Proposed Tariff that they are engaged and are fully capable of cross-examining Access Copyrights witnesses. CAUT and CFS suggest that if the Board orders consolidation of the two tariff proceedings it should include a number of terms in such order. First, they suggest the Proposed Tariffs substantive terms should be harmonized (i.e., rewritten) to the 2011-2013 Proposed Tariff (not the 2014-2017 Proposed Tariff) and the

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Ibid., 13. See Access Copyrights Statement of Case 14 and Valuation Report of Brad Heys, NERA Economic Consulting, September 11, 2013.

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concessions contained in the 2014-2017 Proposed Tariff10 should apply equally to the 2011-2013 tariff. While the Board certainly has jurisdiction to set the terms of a certified tariff, the Board has no jurisdiction to harmonize (i.e., alter) a proposed tariff filed by a collective. If CAUT and CFS as the Objectors to the 20142017 Proposed Tariff wish to argue that the tariff to be certified should mirror the 2011-2013 tariff, or that the 2011-2013 tariff should include the "concessions contained in the 2014-2017 Proposed Tariff, they can make these arguments to the Board at the hearing as matters the Board can deal with when it certifies fair and equitable tariffs. Next, CAUT and CFS suggest that if the Board orders consolidation of the proceedings, Access Copyright should not be permitted to adduce any new evidence. Access Copyright rejects this submission. Access Copyrights application to consolidate is sought on the condition that Access would be allowed to adduce additional evidence related to the 2014-2017 Proposed Tariff in the form of a supplementary NERA report. Any potential prejudice to CAUT and CFS that could be related to filing a NERA supplemental report may be avoided by the appropriate Board order as to the timeline for Access Copyright to serve and file the supplemental NERA report, and for CAUT and CFS to file their 2014-2017 case. CAUT and CFS would incur much greater cost and inconvenience if the proceedings are not consolidated, and they will still have to deal with the evidence Access Copyright will seek to adduce. Finally, with respect to the CAUT and CFS request that the hearing should be delayed to allow the Board to fulfil its inquisitorial mandate, the Board will decide what is appropriate and necessary to fulfil its mandate. For our part, we again submit that there is no need for a delay. 5. The administration of justice is enhanced

There is no rushing of the tariff proceedings as asserted by Professor Katz.11 The February 11, 2014 hearing date was scheduled 14 months ago.12 The serving and filing of minimal new evidence by Access Copyright with respect to the 2014-2017 Proposed Tariff can be accommodated within the existing timetable without prejudice to CAUT or CFS, as the Objectors in the 2014-2017 Proposed Tariff proceeding. There is no impact on Professor Katz or Mr. Maguire as they have no right to respond to the supplemental NERA report. Thus, contrary to Professor Katzs submission, there is no need for the Board to reconsider its November 13, 2013 decision not to delay the hearing. Tariff proceedings before the Board are an expensive proposition for the collective, objectors and, ultimately, the taxpayer. Access Copyright submits that the proceedings should be consolidated in view of the overlapping factual and legal issues; Access Copyrights willingness to rely in the 2014-2017 Proposed Tariff proceeding on the case and interrogatories, as filed, with only the addition of the supplemental NERA report; and the fact that the same witnesses will testify in relation to both proposed tariffs. There is no prejudice to CAUT or CFS that cannot be dealt with by the appropriate Board order.

10

We assume Mr. Fewer is referring to the following provisions of the 2014-2017 Proposed Tariff: s. 4(6) [nothing prevents Institution from using Internet or other public network to gain access to Repertoire Work, or provide a link], s. 13(4) and 14(9) [any survey and any audit shall respect privacy laws and principles of academic freedom]. 11 Katz Response, 12. 12 The Hearing Schedule was set by Board Notice dated September 28, 2012.

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The result of consolidation is that the interests of the administration of justice will be greatly enhanced given optimization of judicial economy, decreased cost and inconvenience to parties and witnesses. Importantly, one of the underlying purposes of the legislation greater rate certainty for potential licensees will be met sooner rather than later. Yours very truly,

Nancy Brooks
c: R. Hofley, Blakes D. Fewer, CAUT and CFS A. Katz S. Maguire