Vol. 143, No. 26 — June 27, 2009

COPYRIGHT BOARD

FILE: Public Performance of Sound Recordings

Statement of Proposed Royalties to Be Collected for the Performance in Public or the Communication to the Public by Telecommunication, in Canada, of Published Sound Recordings Embodying Musical Works and Performers’ Performances of Such Works

In accordance with subsection 67.1(5) of the Copyright Act, the Copyright Board hereby publishes the statement of proposed royalties filed by the Neighbouring Rights Collective of Canada (NRCC) on March 31, 2009, with respect to royalties it proposes to collect, effective January 1, 2010, for the performance in public or the communication to the public by telecommunication, in Canada, of published sound recordings embodying musical works and performers’ performances of such works.

In accordance with the provisions of the same subsection, the Board hereby gives notice that all prospective users or their representatives who wish to object to the proposed tariffs may file written objections with the Board, at the address indicated below, within 60 days of the publication hereof, that is no later than August 26, 2009.

Ottawa, June 27, 2009

CLAUDE MAJEAU
Secretary General
56 Sparks Street, Suite 800
Ottawa, Ontario
K1A 0C9
613-952-8621 (telephone)
613-952-8630 (fax)
claude.majeau@cb-cda.gc.ca (email)

STATEMENT OF PROPOSED ROYALTIES TO BE COLLECTED BY THE NEIGHBOURING RIGHTS COLLECTIVE OF CANADA (NRCC) FOR THE PERFORMANCE IN PUBLIC OR THE COMMUNICATION TO THE PUBLIC BY TELECOMMUNICATION, IN CANADA, OF PUBLISHED SOUND RECORDINGS EMBODYING MUSICAL WORKS AND PERFORMERS’ PERFORMANCES OF SUCH WORKS

GENERAL PROVISIONS

All royalties payable under this tariff are exclusive of any federal, provincial or other governmental taxes or levies of any kind.

Tariff No. 1

RADIO

[NOTE TO PROSPECTIVE USERS: This statement of proposed royalties purports to replace for the years 2010 and 2011 the statement that was published in respect of the same radio stations on May 31, 2008, for the years 2009 to 2011. Neither the Board, nor the courts have determined whether a collective society is entitled to withdraw a proposed statement filed pursuant to the Copyright Act or to file a new proposed statement for a period in respect of which a statement has already been filed.

The new statement is different in substance from the earlier one in five respects. First, the rate base used is gross income, not advertising revenues. Second, turnkey contract revenues are expressly included in the definition of gross income. Third, section 4 proposes a single rate for low-use stations; the two lower tiers are eliminated. Fourth, section 4 proposes two tiers for other stations instead of three. Fifth, the top rate for those stations is increased from 6 to 6.5 per cent.]

A. Commercial Radio

1. Short title

This tariff may be cited as the NRCC Commercial Radio Tariff, 2010-2011.

2. Definitions

In this tariff,

“Act” means the Copyright Act, R.S.C. 1985, c. C-42, as modified; (« Loi »)

“gross income” means the gross amounts paid by any person for the use of one or more broadcasting services or facilities provided by the station’s operator, excluding the following:

(a) income accruing from investments, rents or any other business unrelated to the station’s broadcasting activities. However, income accruing from any allied or subsidiary business that is a necessary adjunct to the station’s broadcasting services and facilities or which results in their being used shall be included in the “gross income”;

(b) the recovery of any amount paid to obtain the exclusive national or provincial broadcast rights to a sporting event, if the licensee can establish that the station was also paid normal fees for station time and facilities. NRCC may require the production of the contract granting these rights together with the billing or correspondence relating to the use of these rights by other parties; and

(c) amounts received by an originating station acting on behalf of a group of stations, which do not constitute a permanent network and which broadcast a single event, simultaneously or on a delayed basis, that the originating station subsequently pays out to the other stations participating in the broadcast. These amounts paid to each participating station are part of that station’s “gross income.”

For greater certainty, the total revenues received by a station pursuant to turn-key contracts with advertisers shall be included in that station’s “gross income”; (« revenu brut »)

“low-use station” means a station that

(a) broadcasts published sound recordings embodying musical works, and performers’ performances of musical works embodied in published sound recordings for less than 20 per cent of its total broadcast time during the reference month; and

(b) keeps and makes available to NRCC complete recordings of its last 90 broadcast days; (« station à faible utilisation »)

“reference month” means the second month before the month for which royalties are being paid; (« mois de référence »)

“year” means a calendar year. (« année »)

3. Application

3.1 This tariff sets the royalties to be paid each month by commercial radio stations, as equitable remuneration pursuant to section 19 of the Act, for the communication to the public by telecommunication, by over-the-air broadcasting and for private or domestic use, in the years 2010-2011, of published sound recordings of musical works and of performers’ performances of such works embodied in published sound recordings.

3.2 This tariff does not apply to a communication to the public by telecommunication that is subject to another NRCC tariff, including the SOCAN-NRCC Pay Audio Services Tariff or NRCC Tariffs 4 (Satellite Radio) and 8 (Simulcasting and Webcasting).

3.3 This tariff is subject to the special royalty rates set out in paragraph 68.1(1)(a) of the Act as follows:

For the purposes of subparagraph 68.1(1)(a)(i) of the Act, a wireless transmission system may only deduct from its annual advertising revenues, its expenses of producing an advertisement commissioned by someone other than the wireless transmission system, if

(i) the fee charged by the wireless transmission system exceeds the fair market value of the airtime,

(ii) the wireless transmission system separately tracks and records the revenues and expenses for these production services, and

(iii) the wireless transmission system provides NRCC with documentation supporting all expenses deducted on account of production services.

4. Royalties

4.1 (a) A low-use station shall pay 2.58 per cent of its gross income during the reference month to NRCC.

(b) Any other station shall pay, on its gross income during the reference month 4.47 per cent on its first $1.25 million of annual revenues and 6.5 per cent on the rest.

5. Reporting Requirements

5.1 No later than the first day of each month, a commercial radio station shall pay to NRCC the royalties due for that month and report the station’s advertising revenue and gross income for the reference month.

5.2 For the first two months of new operation where no reference month exists, a station shall pay and report to NRCC the royalties for those months based on the actual gross income for those months. Payment and related reports are due no later than 30 days after the last day of each such month.

6. Sound Recording Use Information

6.1 Upon receipt of a written request from NRCC, a station shall provide to NRCC, with respect to each published sound recording embodying a musical work broadcast by the station during the days listed in the request:

(a) the date and time of broadcast;

(b) the title of the work, the name of the author and composer of the work;

(c) the title of the album, the name of the performers or performing groups and the record label; and

(d) the duration played of each work.

6.2 The information set out in section 6.1 shall be provided in electronic format where possible, otherwise in writing, no later than 14 days after the end of the month to which it relates.

6.3 A station is not required to provide the information set out in section 6.1 with respect to more than 14 days in a year.

7. Accounts and Records

7.1 A station shall keep and preserve, for a period of six months after the end of the month to which they relate, records from which the information set out in section 6 can be readily ascertained.

7.2 A station shall keep and preserve, for a period of six years after the end of the year to which they relate, records from which a station’s gross income, advertising revenues, and all amounts deducted from either amount can be readily ascertained.

7.3 NRCC may audit these records at any time during the period set out in section 7.1 or 7.2, as well as the broadcast day recordings of a low-use station, on reasonable notice and during normal business hours.

7.4 NRCC shall, upon receipt, supply a copy of the report of the audit to the commercial radio station which was the object of the audit.

7.5 If an audit discloses that royalties due to NRCC have been understated in any month by more than 10 per cent, the commercial radio station which was the object of the audit shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

8. Confidentiality

8.1 Subject to sections 8.2 and 8.3, NRCC shall treat in confidence information received from a commercial radio station pursuant to this tariff, unless the station consents in writing to the information being treated otherwise.

8.2 NRCC may share information referred to in section 8.1

(a) with SOCAN and with any collective society that has a certified tariff for reproduction of musical works or sound recordings by commercial radio stations;

(b) with the Copyright Board;

(c) in connection with proceedings before the Copyright Board, if the collective society has first provided a reasonable opportunity for the station that supplied the information to request a confidentiality order;

(d) to the extent required to effect the distribution of royalties, with its royalty claimants; or

(e) if ordered by law or by a court of law.

8.3 Section 8.1 does not apply to information that is publicly available, or to information obtained from someone other than the station and who is not under an apparent duty of confidentiality to that station.

9. Adjustments

9.1 A station making a payment under this tariff, that subsequently discovers an error in the payment, shall notify NRCC of the error, and an appropriate adjustment shall be made to the next payment due following the notification. No adjustments in the amount of royalties owed may be made in respect of an error discovered by the station which occurred more than 12 months prior to its discovery and notification to NRCC.

9.2 When an error is discovered by NRCC at any point in time, NRCC shall notify the station to which the error applies, and an appropriate adjustment shall be made to the next payment due following the notification.

9.3 The 12-month limit in section 9.1 shall not apply to an error discovered by NRCC, including without limitation an error discovered pursuant to section 9.2 or an underpayment discovered through an audit conducted pursuant to section 7.3.

10. Interest on Late Payments

10.1 Any amount not received by the due date (excluding adjustments for overpayments) shall bear interest from that date until the date the amount is received. Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

11. Addresses for Notices, etc.

11.1 Anything addressed to NRCC shall be sent to 1235 Bay Street, Suite 910, Toronto, Ontario M5R 3K4, email: radio@nrdv.ca, fax number 416-962-7797, or to any other address or fax number of which the station has been notified in writing.

11.2 Anything addressed to a station shall be sent to the last address and fax number provided by that station to NRCC in writing.

12. Delivery of Notices and Payments

12.1 A notice may be delivered by hand, by postage-paid mail, by fax or by email.

12.2 A payment must be delivered by hand or by postage-paid mail.

12.3 All notices or payments mailed in Canada shall be presumed to have been received three business days after the day they were mailed.

12.4 All notices sent by fax or email shall be presumed to have been received the day they were transmitted.

C. Canadian Broadcasting Corporation (CBC)

1. Short title

This tariff may be cited as the NRCC CBC Radio Tariff, 2010-2011.

2. Definitions

In this tariff,

“Act” means the Copyright Act, R.S.C. 1985, c. C-42, as modified; (« Loi »)

“CBC radio revenue” means that portion of the total revenues of the CBC, including its parliamentary appropriation for operating expenditures and its revenues from commercial activities or any other source, that is used to finance the operation of the CBC’s radio stations as reported in the annual financial accounts of the CBC; (« revenu radio de la SRC »)

“CBC radio stations” means any radio network and any radio station owned or operated by the CBC; (« stations de radio de la SRC »)

“month” means a calendar month; (« mois »)

“reference year” means the complete fiscal year of the CBC, ending March 31 of the year before the year for which payment is being made; (« année de référence »)

“year” means a calendar year. (« année »)

3. Application

3.1 This tariff sets the royalties to be paid to NRCC each month by the CBC, as equitable remuneration pursuant to section 19 of the Act, for the communication to the public by telecommunication, at any time and as often as desired, in the years 2010-2011, of published sound recordings of musical works and of performers’ performances of musical works embodied in published sound recordings by over-the-air radio broadcasting.

3.2 This tariff does not apply to the CBC’s pay audio service operated at present under the name Galaxie, or to any audio service that is not a conventional, over-the-air broadcasting service.

4. Royalties

4.1 For the years 2010-2011, the annual royalties payable to NRCC by CBC shall be 6.5 per cent of CBC radio revenue in the reference year multiplied by 0.6139.

Note: The multiplier reflects the difference between the weighted average of 21.66 per cent of the broadcast day during which CBC radio stations broadcast published sound recordings and performers’ performances eligible for remuneration under section 19 of the Act and the comparable figure of 35.28 per cent for commercial radio stations that broadcast in a music format (that is, excluding “low-use” stations as defined in NRCC Tariff 1.A).

4.2 The amount of the monthly payment made to NRCC by the CBC during each year shall be one-twelfth (1/12) of the amount calculated pursuant to paragraph 4.1 above.

5. Payments

5.1 CBC shall pay to NRCC the royalty due for a month on the first day of that month.

5.2 Any amount not received by the due date shall bear interest from that date until the date the amount is received. Interest shall be calculated daily at a rate equal to one per cent above the Bank Rate, effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

5.3 Adjustments in the amount of royalties owed (including excess payments), as a result of the discovery of an error or otherwise, shall be made on the date the next royalty payment is due.

6. Information

6.1 Should the CBC radio revenue not be found in the annual financial accounts of the CBC, CBC shall provide NRCC with a report each year indicating the CBC radio revenue, at the time that the annual financial accounts of the CBC are published.

6.2 In the 15 days following the end of each month, the CBC shall forward to NRCC information on the musical content of all of its network programming and a sample of at least 1 050 days per year, and in proportion to the population of each locality, of regional and local programming (logs) for the CBC radio stations, identifying the CBC radio stations’ name and call letters, for that month, in electronic format where available, indicating for each sound recording broadcast, at least the track title of the musical work, the name of the author and composer of the work, the name of the performers or of the performing group, the time duration of the track played, the title of the record album, the record label, the album catalogue number, the manner in which the track was used in the broadcast (as background, theme or feature music), whether the track performed is a published sound recording, the name of the radio program for which the sound recording was broadcast and the date and time of broadcast.

7. Confidentiality

7.1 Subject to sections 7.2 and 7.3, NRCC shall treat in confidence information received from the CBC pursuant to this tariff, unless the CBC consents in writing to the information being treated otherwise.

7.2 NRCC may share information referred to in section 7.1

(i) with any other collecting body in Canada or elsewhere,

(ii) with the Copyright Board,

(iii) in connection with proceedings before the Copyright Board, with anyone,

(iv) to the extent required to effect the distribution of royalties, with its royalty claimants, or

(v) if ordered by law or by a court of law.

7.3 Section 7.1 does not apply to information that is publicly available, or to information obtained from someone other than the CBC and who is not under an apparent duty of confidentiality to the CBC.

8. Delivery of Notices and Payments

8.1 All notices and payments to NRCC shall be sent to 1235 Bay Street, Suite 910, Toronto, Ontario M5R 3K4, fax number 416-962-7797 or to any other address or fax number of which the CBC has been notified in writing.

8.2 All communications from NRCC to CBC shall be sent to the last address and fax number provided by the CBC to NRCC in writing.

8.3 A communication or a notice may be delivered by hand, by postage-paid mail or by fax. A payment must be delivered by hand or by postage-paid mail.

8.4 All communications, notices or payments mailed in Canada shall be presumed to have been received three business days after the day they were mailed. All communications or notices sent by fax shall be presumed to have been received the day they were transmitted.

Tariff No. 3

USE AND SUPPLY OF BACKGROUND MUSIC

Short Title

1. This tariff may be cited as the NRCC Background Music Tariff 2010.

Definitions

2. (1) In this tariff,

“Act” means the Copyright Act, R.S.C. 1985, c. C-42, as modified; (« Loi »)

“background music supplier” means a person who provides a service of supplying recorded music for performance in public by an establishment dealing at arm’s length; (« fournisseur de musique de fond »)

“establishment” means a place to which the public, including employees, has access, and includes, but is not limited to, a retail store, restaurant, hotel, bar, workplace, park, club or school, as well as a means of public transportation. In the case of a business which has multiple locations, each separate location shall be considered to be a separate establishment; (« établissement »)

“year” means a calendar year. (« année »)

(2) For the purposes of this tariff, related persons shall be deemed not to deal with each other at arm’s length.

Application

3. (1) This tariff sets the royalties to be paid to NRCC, for the benefit of performers and makers, for the performance in public or the communication to the public by telecommunication of recorded music in an establishment, including any use of recorded music with a telephone on hold.

(2) This tariff does not apply to a performance in public or a communication to the public by telecommunication that is subject to another NRCC tariff.

(3) This tariff is subject to the exception set out in subsection 69(2) of the Act.

Royalties Payable When Recorded Music is Provided by a Background Music Supplier

4. When recorded music, including recorded music for a telephone on hold, is provided by a background music supplier to an establishment, the royalty payable for the relevant quarter is 16.36 per cent of the supplier’s gross revenue from the supply of the recorded music, including but not limited to subscription fees and advertising revenues, and subject to a minimum quarterly fee of $20.61 per establishment.

Royalties Payable in Other Cases

5. (1) When recorded music is not provided by a background music supplier and recorded music is used with a telephone on hold, the royalty payable for the relevant year shall be $98.84 for the first trunk line and $27.00 for each additional trunk line.

(2) When recorded music is not provided by a background music supplier, in addition to any royalty payable under subsection (1), the royalty payable shall be calculated as follows:

(a) if the number of admissions, attendees, or tickets sold for days or events during which background music was played can be estimated with reasonable certainty, that number multiplied by 0.294¢;

(b) if paragraph (a) does not apply, the number of square meters (square feet) of the area of the establishment to which the public has access, multiplied by the number of days of operation on which background music was played, multiplied by 0.92¢ (0.084¢); and

(c) if paragraphs (a) and (b) do not apply, the royalty payable for the relevant year shall be $98.84.

(3) In all cases, a minimum annual fee of $98.84 shall apply to all background music uses under subsection (2).

(4) Notwithstanding subsection (1) and (2), as soon as the royalties payable for a year exceed $350, payments for the rest of that year and for the following year shall be made on a quarterly basis.

Rate Adjustment to Account for Inflation

6. (1) Subject to subsections (2) and (4), the amounts payable in 2010 and thereafter pursuant to section 5 may be increased by a factor equal to the average annual variation in percentage of the Consumer Price Index calculated over a 12-month period ending in September of each year preceding the year in which the increase is applied, minus one percentage point.

(2) An increase can be applied only if the factor is higher than three percentage points.

(3) An increase can be applied only in January.

(4) An increase that cannot be applied in accordance with subsection (2) shall be cumulated with the increase for the following year, and so on.

(5) When NRCC applies an increase, it shall send to the Copyright Board and to every person known to NRCC that is subject to this tariff, before the end of January, a notice stating the following:

“NRCC Tariff 3 (Background Music), as certified by the Copyright Board of Canada, allows NRCC to increase the rates set out in section 5 of the tariff to account for inflation, according to a formula set out in section 6 of the tariff.

Effective January 1, [year in which the increase is applied], the rates are being increased by [rate of increase] per cent. As a result the applicable rates for [year in which the increase is applied] and thereafter shall be as follows:

(a) If royalties are calculated according to subsection 5(1) of the tariff (telephone on hold), the annual applicable royalty is $ [new applicable rate] for the first trunk line plus $ [new applicable rate] for each additional trunk line;

(b) if royalties are calculated according to paragraph 5(2)(a) of the tariff, (admissions, attendees or number of tickets sold), [new applicable rate] ¢;

(c) if royalties are calculated according to paragraph 5(2)(b) of the tariff (area), [new applicable rate for area measured in meters] ¢ if calculated in meters and [new applicable rate for area measured in feet] ¢ if calculated in feet; and

(d) if royalties are payable pursuant to paragraph 5(2)(c) of the tariff (all other instances), the annual royalty payable is $ [new applicable rate].”

Reporting Requirements

7. (1) No later than 60 days after the end of the quarter, a background music supplier making a payment pursuant to section 4 shall pay the royalty for that quarter and, where applicable, shall report the information used to calculate the royalty, including where applicable, a report of the suppliers’ gross revenue for the quarter, and a list in electronic format (if available) of the subscribers to which the payment relates, containing the business name, full address, and telephone number and identifying, for each month during the quarter, any new subscribers or any existing subscribers who have cancelled their service.

(2) No later than 60 days after the end of the quarter, a person making payment pursuant to subsection 5(4) shall pay the royalty for that quarter and shall report all information used to calculate the royalty.

(3) No later than 60 days after the end of the year, a person making a payment pursuant to subsection 5(1), (2), or (3) shall pay the royalty for that year and shall report all information used to calculate the royalty.

Accounts and Records

8. (1) A background music supplier shall keep and preserve, for a period of six years after the end of the year to which they relate, records from which gross revenue can be readily ascertained, including the subscription rate payable to subscribe to the background music service, a list of the subscribers for which payments are made and copies of background music subscriber invoices.

(2) All other persons subject to this tariff shall keep and preserve, for a period of six years after the end of the year to which they relate, records from which that person’s payment can be ascertained, including information used to determine the choice of calculation, and information required to ascertain days on which background music was used.

(3) NRCC may audit these records at any time during the period set out in subsections (1) and (2), on reasonable notice and during normal business hours.

(4) NRCC shall, upon receipt, supply a copy of the report of the audit to the person who was subject to the audit.

(5) If the audit discloses that royalties due to NRCC have been understated during any period by more than ten per cent, the person who was subject to the audit shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

(6) In addition to any audit that may be conducted under subsection 8(3), upon receipt of a written request from NRCC not more than once during each quarter, a background music supplier shall send to NRCC within 30 days of receipt of the written request, copies of 50 representative invoices from the suppliers to an establishment, for the provision of its background music service, for each province in which the supplier provides that service.

Confidentiality

9. (1) Subject to subsections (2) and (3), NRCC and its agents shall treat in confidence information received pursuant to this tariff, unless the person who supplied the information consents in writing to the information being treated otherwise.

(2) NRCC and its agents may share information referred to in subsection (1)

(a) with any other collective society that has secured a certified tariff that covers any of the uses of recorded music covered by this tariff;

(b) with the Copyright Board;

(c) in connection with proceedings before the Copyright Board, if NRCC has first provided a reasonable opportunity for the person providing the information to request a confidentiality order;

(d) to the extent required to effect the distribution of royalties, with its royalty claimants; or

(e) if required by law or by a court of law.

(3) Subsection 9(1) does not apply to information that is publicly available, or to information obtained from someone other than a person subject to this tariff and who is not under an apparent duty of confidentiality to that person.

Adjustments

10. (1) A person making a payment under this tariff, who subsequently discovers an error in the payment, shall notify NRCC of the error and an appropriate adjustment shall be made to the next payment due following notification. No adjustments in the amount of royalties owed may be made in respect of an overpayment discovered by the payor which occurred more than 12 months prior to its discovery and notification to NRCC.

(2) When an error is discovered by NRCC at any point in time during the term of this tariff, NRCC shall notify the person to whom the error applies and an appropriate adjustment shall be made to the next payment due following the notification.

(3) The 12-month limit in subsection 10(1) shall not apply to an error discovered by NRCC, including without limitation an error discovered pursuant to subsection 10(2) or an underpayment discovered through an audit conducted pursuant to subsection 8(3).

Interest on Late Payments

11. Any amount not received by the due date (excluding adjustments for overpayments) shall bear interest from that date until the date the amount is received. Interest shall be calculated daily at a rate equal to one per cent above the Bank Rate, effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

Addresses for Notices, etc.

12. (1) Anything addressed to NRCC shall be sent to 1235 Bay Street, Suite 910, Toronto, Ontario M5R 3K4, email: background@nrdv.ca, fax number 416-962-7797 or to any other address, email address or fax number of which the sender has been notified in writing.

(2) Anything addressed to a person subject to the tariff shall be sent to the last address, email address or fax number provided by that person to NRCC in writing.

(3) Any document sent by fax or email shall be presumed to have been received the day it was transmitted.

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