Office of the President

December 17, 2010

Mr. Gilles McDougall

Acting Secretary General
Copyright Board of Canada
Suite 800, 56 Sparks Street
Ottawa, ON K1A 0C9

Dear Mr. McDougall;

Re: Access Copyright (AC) Post-Secondary Educational Institution Tariff, 2011-13

This is in response to the Board’s Notice of December 8, 2010 regarding questions 2-4. All
statutory references are to the Copyright Act.

The questions are as follows:

1. Should the Board grant Access Copyright's application for an interim decision?
2. If the Board decides to issue an interim decision, which form should that decision take?
3. If the Board decides to issue an interim decision, what should the substantive content of
the decision be? Access proposes maintaining what it refers to as the status quo, with
additional, potential uses being allowed at no additional cost. Does the proposal achieve
what it purports to achieve? Is that what the interim decision should indeed achieve? If
not, what else?
4. Once the content or substance of the decision has been determined, does the proposed
text reflect that substance or content and if not, how should it be modified?

1) Should the Board grant Access Copyright's application for an interim decision?

We have already responded to Question #1. Our response and that of all of the other objectors is
unequivocally to the effect that there should be no interim tariff. In summary, Athabasca
University’s position is:

1. The Board lacks jurisdiction to impose an interim tariff in these circumstances;

2. The Board cannot impose any tariff - interim or permanent - with a lack of or insufficient
evidence, and in this case, AC has not provided any evidence to support an interim tariff;
3. There are serious doubts as to whether AC has a prima facie case on the main
application, based upon such factors as its lack of repertoire and digital rights. The fact
that significant elements of its tariff are based upon rights that do not exist in the
Copyright Act and reporting requirements that are questionable at best;
4. The proposed interim tariff differs substantially from that officially published in the Canada
Gazette on June 12, 2010;
5. There has been no previous tariff;
6. It would be unfair and erroneous to force objectors to fund AC’s application, especially

AU Athabasca Phone: 780-675-6100 CANADA’S OPEN UNIVERSITY

1 University Drive Toll-free (Canada/U.S.): 1-800-788-9041
Athabasca, AB T9S 3A3 Fax: 780-675-6437
Canada www.athabascau.ca
Enquiries: www.askau.ca
 since there is no evidence that such funding is necessary and nobody forced AC to move
to a mandatory tariff regime from a previously negotiated regime;
7. The proposed tariff differs substantially from both the previous “status quo” voluntary
agreements and the proposed new tariff. In any case, there is no “status quo” because
AC has decided - by its own stated admission in its December 15, 2010 reply - to move
from a voluntary to a mandatory regime;
8. AC has not provided any evidence that it - or its members - will suffer any deleterious
effect in the absence of an interim tariff. If this should happen, AC is the author of its -
and its members - own misfortune. The Board’s mandate does not give it jurisdiction to
“bail out” AC from its bad judgment calls and failed strategies;
9. The K-12 money that AC may or may not eventually get to use almost certainly has
nothing to do with any licensing revenues that may someday be due from the post-
secondary sector. By definition, university faculty and students use very different material
than the K-12 system. There would be almost no overlap. The Board can and should take
“judicial notice” of this fact;
10. AC has provided no evidence of its repertoire, let alone a substantial portion of the
repertoire which are required by post-secondary’s;
11. An interim tariff will likely last for many years and could be anti-competitive and anti-
innovation;
12. AC has both the burden and onus of showing that it has an adequate repertoire to sustain
this interim application. Clearly, participants need to have adequate information to assess
the nature and quantity of the works in AC’s repertoire, and the nature of the rights that
AC has in these works; and,
13. Last and not least, this process has been - with respect - patently and unreasonably
unfair from any number of standpoints.

We believe that it would be a serious error for the Board to impose any interim tariff, and
therefore, our responses to questions 2-4 will be very brief.

These answers will be absolutely without prejudice to our position that the Board should
completely deny AC’s application for what it calls an “interim decision” that would effectively be an
“interim tariff” and to any other arguments we may wish to advance. The penultimate paragraph
of AC’s letter of December 15, 2010 makes it abundantly clear that AC is looking for a mandatory
interim tariff that would impose massive costs (i.e. the revenue it claims it will lose) and restrictive
conditions for years to come without any adequate hearing;

2) If the Board decides to issue an interim decision, which form should that decision take?

It appears that the Board has set in place a process to render an interim decision. The Board
could avoid many of the contentious issues simply by ruling that it lacks jurisdiction in this
instance by reason of s. 70.13 and/or that AC has filed no evidence. This is what arguably should
have been done some weeks ago, without the need for the participants to respond. The Board
could still issue a narrow decision to this effect.

If the Board wishes to address some of the more substantive issues, it should wholly reject AC’s
submissions and wholly reject AC’s application on the merits.

That said, and without prejudice to any other arguments we may later make, there may be a
possible practical compromise here that might lessen the chance of judicial review being sought.
This compromise might consist of the following suggestion. The Board could issue, by way of
obiter dicta, a suggested model license arrangement that would be strictly voluntary and optional.
The Board would need to specify that there would be no adverse consequence to any party not
interested in such arrangement and that, in particular, s. 70(2) would not be applicable to such a
party.
If the Board does not believe that it is in a position to suggest such a license at this time, it could
invite AC and some representative parties to apply to the Board properly under s 70.2 for
“arbitration” in such a way that the result would have no effect as a tariff under s. 70(2), and
would not otherwise bind or prejudice any third parties who do not need or wish to be forced into
any arrangement with AC.

We should add that Athabasca has no interest in being party to such a process, and is merely
suggesting it on a without prejudice basis as possibly being helpful in resolving the current
unusual situation with possibly a reduced chance of judicial review being sought.

3) If the Board decides to issue an interim decision, what should the substantive content
of the decision be? Access proposes maintaining what it refers to as the status quo, with
additional, potential uses being allowed at no additional cost. Does the proposal achieve
what it purports to achieve? Is that what the interim decision should indeed achieve? If
not, what else?

We believe that, if the Board opts to utilize our suggestions about a model non-binding license or
one devised under s. 70.2 that would not bind or prejudice parties outside of the “arbitration”, the
result would likely only be of interest to any substantial number of institutions if:

1. It sets a substantially lower base rate than that currently in effect, which does not reflect
the Supreme Court of Canada’s 2004 CCH v. LSUC ruling in any way;
2. Does not purport to license - even for “free” - digital rights that cannot be found in the
Copyright Act;
3. Provides the long standing “indemnity” scheme in view of AC’s repertoire problems;
4. Provides that no institution will ever be required to pay additional compensation resulting
from entering into such an agreement in the event that a retroactive tariff is eventually
imposed and upheld in the Courts; and,
5. Any institution being party to such an arrangement will be entitled to a refund of the
appropriate difference in the event that any tariff finally imposed results in a lower
retroactive tariff the amount paid under such an arrangement.

Additionally, the Board may wish to require that AC be obliged to issue transactional licenses for
any specific work in its repertoire at reasonable cost, on reasonable terms, and in a reasonable
length of time to any post-secondary institution that does not require an overall license with AC.
This may be useful to all concerned when copyright owners, within the AC repertoire, are difficult
to contact or when they would prefer that AC handle such requests.

4) Once the content or substance of the decision has been determined, does the proposed
text reflect that substance or content and if not, how should it be modified?

We are not able to respond to this question in the absence of sufficiently detailed reasons from
Board concerning questions 1-3.

Yours sincerely.

Frits Pannekoek, Ph.D.

President

cc: All participants