Copyright Board Canada

Commission du droit dauteur du Canada

January 17, 2014 File: Access Copyright Post-Secondary Educational Institution Tariff (2011-2013) QUESTIONS TO ACCESS COPYRIGHT 1. Access now proposes royalty rates of $26 per FTE for universities and $10 for all other institutions. In Exhibit AC-5, Table 3.6 shows coursepack copying by affiliation. On average, between 2005 and 2010, AUCC affiliates made 167 copies per FTE, as opposed to 34 copies per FTE by ACCC affiliates. (a) Do you have any evidence that shows that copying for non-coursepack purposes is proportional to coursepack copying? If so, what are the proportions over time? (b) According to the coursepack data, AUCC members copy almost 5 times as much as ACCC members. If this is so, how does Access justify the ratio of 2.6 to 1 between the royalty rates of universities and all others? 2. Access refers to the rates in the model agreements with AUCC and ACCC as fair market value (FMV) rates (Exhibit AC-12, at para. 35). According to Exhibit AC-2, a majority of AUCC members have signed the model licence, but a minority of ACCC members have signed the model licence. (a) In your estimation, is the number of members that have signed the model licence relevant for determination of what is FMV? (b) If so, how do you reconcile this with the fact that a majority of AUCC members have signed but only a minority of ACCC members have done so? 3. In Exhibit AC-4, Table 3.5 shows that 986 compensable copies were made per FTE, based on the interrogatories that were held in abeyance. As we read step 7, on page 11 of AC-4, the implicit assumption is that one exposure is made of each page posted to the CMS for each student enrolled in the course-section. (a) Please indicate whether the Boards understanding is correct. (b) Please justify this assumption if the Boards understanding is correct, given the possibility that the CMS may contain both required readings and optional readings. (c) Please recalculate Table 3.5 using the following alternative assumptions (i) For each page posted to a CMS, 75 per cent of the enrolled students make a copy;

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(ii) For each page posted to a CMS, 50 per cent of the enrolled students make a copy; (iii) For each page posted to a CMS, 25 per cent of the enrolled students make a copy; and (iv) For each page posted to a CMS, only one student makes a copy. 4. Please redo Table 3.5 as in Question 3, assuming that hyperlinked documents are not compensable copies. 5. In Exhibit AC-5, Table 3.4 shows coursepack copying by genre from 2005 to 2012. On page 9, the exhibit states 2011/2012 data cannot be easily or at all compared to 2005 to 2010 data. Visual inspection of the data for 2005 to 2006 also shows these years to be anomalous, in the sense that they are much higher than the data for 2007 to 2010. (a) Please comment on any changes in methodology, or data collection protocols between 2005 and 2012. (b) From a purely statistical perspective, are the years 2011 and 2012 outliers? Are the years 2005 and 2006 outliers? (c) If both 2005-2006 and 2011-2012 are outlier periods, what does this imply for Access conclusions in Exhibit AC-5. (d) Please comment on the following hypothesis: The data show that paper coursepacks are being progressively replaced by digital CMS. 6. On page 29 of Exhibit AC-6, the exhibit reads: The second overall observation is that a reduction in revenue would have no impact for about one-half of Access Copyright creator affiliates: the proportion stating that they would not change their behaviour hovers between 45% and 54% depending on the scenario and the aspect of their behaviour. (a) Please comment on how the Board should interpret this statement in its task of setting royalties. (b) Please indicate whether this statement has any relevance for assessing whether $26 and $10 are fair and equitable royalty rates. (c) Please indicate how this statement and the following one (taken from Exhibit AC-11) make sense together: Likely impact #3: The Policy will reduce the number of creators and/or the time spent by creators on producing content. 7. In Exhibit AC-12, the following statement appears. In Quebec, COPIBEC grants postsecondary institutions a blanket licence with rights substantially similar to those offered in the Proposed Tariff at a per FTE rate of $21.00 for universities and $12.40 for colleges. In addition, Universities and colleges pay a per page fee of between $0.10 and $0.12 for copying above certain limits. (a) Is the rate of $21 per FTE in universities fair and equitable? (b) Is the rate of $12.40 per FTE in colleges fair and equitable?

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(c) Are the per-page rates of between $0.10 and $0.12 established in the COPIBEC College Licence and the COPIBEC University Licence, respectively, for copying beyond certain limits provided for in those licences, good proxies for a transactional licence that the Board may want to certify as part of its tariff? 8. Assume that the Board wanted to offer two licences for each category (universities and others), regular (per FTE, blanket) and transactional, where the transactional licence would be subject to a minimum fee. (a) At present, Access proposes blanket licence fees of $26 and $10, for universities and colleges, respectively. In the two-licence scheme, would these prices continue to be fair and equitable? (b) Is there any relationship among the ratios of the blanket licence fees, the transactional licence fees and the minimum fees? Should these ratios all be the same? (c) Please describe a model or models of a transactional licence, in terms of specific provisions that would apply to licences. (d) What would be appropriate prices for the transactional licence fees for universities and colleges? Provide evidence and argument to support these prices. (e) How should the Board set the minimum fees for transactional licences for universities and colleges? Provide evidence and argument to support these prices. (f) What terms and conditions should the tariff include for those who would pay under the transactional licence? 9. Exhibit AC-2, at paragraph 19, reads: Transactional (or pay-per-use) licences, which are issued in response to requests to copy specific works when a comprehensive licence (or tariff) is not available or when the use is beyond a comprehensive licence copying limits. Fees are usually charged per number of pages copied multiplied by the number of copies made. Please supply a one per cent representative sample of transactional licences issued between 2005 and 2013 where a comprehensive licence is not available. In any event, supply at least 25 such licences. 10. Exhibit AC-2, at paragraph 67, reads: The Proposed Tariff is structured as a flat FTE rate because of the unique challenges posed by digital copying. Does this mean that Access considered and rejected the possibility of a transactional licence (a per-page rate)? If, so please provide the reasons why. 11. In Exhibit AC-4, table 3.1 contains 95 per cent confidence intervals. Please show all calculations related to one of these confidence intervals, including any design effects and estimated population variances.

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12. Exhibit AC-12, table 2, shows average payment per FTE by AUCC members of $19 and $7 from ACCC members. (a) Does this suggest that the proposed rates of $26 and $10 are too high? (b) Justify the increases implied by moving from these average rates to the proposed rates.

Gilles McDougall Secretary General