Hot on the heels of recommendations in the recent draft report of the Productivity Commission that would have serious adverse effects on Australia’s music creators and distributors, Music Australia is today warning Australia’s musicians and music small businesses about the potential serious impact of new legislation that the Turnbull Government proposes to introduce that would significantly expand the scope of the current copyright “safe harbour” provisions in the Copyright Act.
What is copyright “safe harbour”?
In Australia, the safe harbour provisions in the Copyright Act provide “carriage service providers” (essentially internet service providers) with some protection if they are found to have authorised copyright infringement while passively operating the “pipes” through which copyright material is delivered to consumers by third parties. As long as a carriage service provider doesn’t have an active role in selecting, modifying or curating the content that it delivers to its customers, and provided that it observes some specified requirements (such as having a policy in place that allows for termination of accounts of repeat copyright infringers), then a court will not be able to award damages or other monetary relief against the carriage service provider even if it is found to have authorised copyright infringement in the course of carrying out its normal activities.
The theory is that carriage service providers, as suppliers of passive communications infrastructure, should not be exposed to liability for copyright infringement simply for doing what they are expected to do, as long as they take some steps to help rights holders combat rampant online infringement.
Some other countries, including the US, currently extend safe harbour protection to a broader range of service providers. The experience of rights holders (especially music rights holders) in the US has been that organisations that select, curate and modify copyright content, such as YouTube, have leveraged their claimed safe harbour status in negotiations to pay royalties to rights holders at a much lower rate than would otherwise be the case. For example, the US experience is that businesses such as Spotify, which does not claim safe harbour protection, pay royalties at significantly higher rates than, for example, YouTube, which does claim safe harbour status This has been called the “Value Gap” and is of great concern to music creators.
A large group of US songwriters, musicians and other music organisations recently signed an open letter to the US Congress urging law makers to change the current arrangements, which are being reviewed by the US Copyright Office. The enquiry has been provided with a substantial amount of evidence that the current safe harbour arrangements, which were designed in the early days of the internet, are simply not equipped to cope with the post Web 2.0 world and are not protecting rights holders while imposing a significant compliance burden on communications providers.
The European Union is also reviewing its safe harbour arrangements at present. In this context, it is perplexing that the Turnbull government intends to rush through legislation that is recognised as outmoded in other similar jurisdictions without properly consulting those who will be most affected – the people who create the content. Effectively, rights holders will be required to argue (most probably through litigation) that organisations claiming safe harbour status are not entitled to it. Yet another cost burden on those that create the content that supports the business models of the intermediaries.
What is the new legislation?
There are 3 components to the new legislation. Two of these, changes to make it easier for visually impaired people to access books, and changes that will streamline the licensing of copyright material to education institutions, have been the subject of lengthy and broad consultation with rights holders and other affected parties. In general they are not contentions. However, the 3rd component, which will make substantial changes to the current safe harbour arrangements, was tabled just 2 days before Christmas Day 2015 without any prior warning, or any consultation with music and other rights holders. Stakeholders were given only a few weeks over the summer holiday break to comment on the proposed changes. No changes have been made to the proposed legislation despite the fact that a number of rights holder groups made submissions within the truncated time frame they were given.
What are the proposed safe harbour changes and why are music makers concerned?
Currently, safe harbour protection in Australia is only provided to organisations that fall within the defined term “carriage service providers”; as mentioned above this term mainly covers ISPs. The Turnbull government proposes to delete the word “carriage” from the safe harbour sections of the Act and to introduce a very broad definition of service provider . This looks to be a deceptively simple change but it will have serious consequences, because a much broader range of businesses and other organisations, including commercial companies such as Google, YouTube and eBay, in addition to universities, libraries and other educational and cultural institutions would be able to claim safe harbour status.
Commercial organisations of this type were never intended to receive safe harbour protection when it was originally introduced in Australia. The US experience supports the fears of Australian rights holders that these large organisations will claim safe harbour status and use it as leverage in negotiations with rights holders to drive down payments that they are currently required to make when they use copyright material. Rights holders see this as yet another front (alongside the campaign to introduce “fair use”) in the current assault on copyright that is being waged by large users of copyright material.
Importantly, the Turnbull government has assumed that the simple act of deleting one word from a definition means that no significant consequences can arise from the new legislation. This is not the case, despite what academics and other commentators advocating on behalf of big technology companies and educational institutions have been saying in the press.
What do rights holders want?
In general, rights holder groups do not oppose the parts of the new Bill that will make it easier for visually impaired people to access books or that streamline licensing arrangements for use of copyright material by educational institutions as there has been extensive consultation and cooperation about them. Rights holders want the Turnbull government to remove the safe harbor amendment provisions from the new Bill so that affected stakeholders can be consulted properly and their views taken into account and so that the results of the current safe harbour reviews in the US and the EU can be considered. That is the best way to achieve an equitable outcome that takes account of modern developments in technology and the law.
Rights holder groups want a safe harbour scheme which works and believe they are entitled to expect that we will be consulted about changes which will impact their ability to earn a living and protect their creative output.
What can you do?
Individual music makers and small music business have as much if not more to lose if this legislation proceeds without sufficient consideration of its negative impact on Australia’s music industry and content creators generally, because they have less bargaining power than larger creative businesses. ]
Music Australia urges you to write to or phone your local Federal MP and the office of the responsible Minister, Senator Fifield and demand that the safe harbour section of the Bill be removed before the Bill is tabled in Parliament. There is no time to lose, as the Bill may be tabled before the end of the current sitting year.