Canada’s copyright reform bill: Desperately seeking economists (and evidence)

Even though this is nominally a blog about copyright, and even though much of my work to date has focused has concentrated on the Canadian copyright policymaking process, I haven’t felt much of a need to post anything about the Conservative government’s latest kick at the copyright-reform can, Bill C-11, The Copyright Modernization Act (you can track the bill, including parliamentary speeches and the Library of Parliament’s legislative summary here). This is partly because the Conservative majority and the fact that the bill is completely unchanged from 2010’s Bill C-32 mean that its passage as is is almost certainly a foregone conclusion.

(For the record, Sara Bannerman succinctly captures my concerns with the bill.)

Instead, I’ve been boning up on the economics of copyright literature, courtesy of the Society for Economic Research on Copyright Issues. (Try to tolerate their ridiculous Flash-based website – there’s some really good stuff in there.) Economists aren’t often heard from in the copyright debate, which is dominated by copyright lawyers and interest groups, but, as I’ve been arguing for a while to colleagues, they should be, including in the current Canadian C-11 debate.

A 2008 overview of the economics-of-copyright literature by Ruth Towse, Christian Handke and Paul Stepan would be a good place to start. Their survey of the diversity of economic perspectives on copyright lends itself to two very important points that have been completely ignored in the C-11 debate, and indeed in the Canadian copyright debate dating back to 2005 and earlier.

The first is that the economics literature has yet to come to a consensus on even basic questions like copyright’s effect on creative production:

The view held by those who strongly favour copyright protection is that without copyright, there would be much less production of creative content, a reduction in diversity and hardship for artists and other creators. Those who are totally opposed to copyright believe it leads to the exploitation of consumers and of creators, holds back artistic development and cultural diversity because it encourages the growth
of large corporations, and inhibits freedom of expression. Most economists do not subscribe to either extreme position but there is nothing in all the literature we surveyed here to guide us towards the ‘optimal’ copyright standard (emphasis added).

In a 2003 paper for Industry Canada, Ruth Towse mused that economists have had little effect on the copyright debate not only because it was dominated by lobbyists, but also because of their inability to offer unambiguous policy recommendations (as opposed to interest groups and lobbyists, who always know exactly what has to be done). But, really, economists’ greatest contribution is exactly this ambiguity. If the effects of even existing copyright protection are uncertain, the correct response by rational policymakers should be to exercise extreme caution when it comes to expanding copyright protection.

This warning extends to the digital-lock provisions in C-11. On digital locks, it’s been well documented, not least in my doctoral work, that the digital-lock provisions were inserted in the bill at the request of the U.S. government (to “make the Americans happy”) and is not grounded in any public-policy justification in the least.

Which brings us to the second point that comes from reading the copyright-economics literature: the desperate need for empirical research into the effects of copyright.

In my offline rantings to colleagues, I’ve been arguing for a greater role for economic analysis in the copyright debate. More recently, though, I think that what’s really missing from the Canadian copyright debate (including over C-11) is any empirical evidence whatsoever justifying both the government’s policy choices and much of the opposition’s position.

Towse et al end their survey with a call for better evidence, including into the effects of copyright on individual industries, firms and creators, and on the “public-choice aspects of copyright law,” which is shaped mainly by lobbying, not empirical evidence. (My dissertation kind of falls into this final category.)

To that, I say, Amen. Empirical-evidence-free debates tend to devolve into what I’ve referred to elsewhere as “rights talk”:

Rights-talk doesn’t get us very far when trying to formulate public policy that affects many different interests. It just leads to a pissing match over which group has the bigger rights (creators? corporations? consumers? citizens?). Better to look at actual outcomes and try to satisfy as many people as possible.

Russell McOrmond’s stance on Bill C-11’s provision that educational course materials be destroyed within 30 days of the end of a course offers a good example of how a lack of evidence hampers the copyright discussion. He categorizes the provision as “beyond reasonable on the part of the government as yet another federal handout to provincially funded educational institutions, and a handout funded on the backs of copyright holders.”

Let’s leave aside the odd characterization of an exemption within the Copyright Act as a “handout funded on the backs of copyright holders.” Limitations on copyright (which this would be) are an integral part of copyright law. In other words, copyright rights and limitations go together; one does not precede the other, as McOrmond implies here.

But even ignoring that point, how should we judge McOrmond’s main point about balancing the rights of copyright owners (remember: these aren’t usually creators) and users, in this case, educational users? And the answer is, absent evidence, we can’t. Instead, we’re left with copyright owners arguing for their right to remuneration, and users arguing about their right to access and knowledge dissemination. Both sides can provide hypothetical scenarios in which their interests are damaged, but that doesn’t move us beyond the aforementioned “pissing match.”

This is because we’re asking the wrong questions. Instead of focusing on rights, which leads inexorably toward an impasse, we should be focusing on effects, on the who wins and loses, and what these wins and losses actually look like:

  • How will this new provision affect creators’ incentives to create?
  • How will it affect the dissemination of creative works?

Those two questions deal directly with the fundamental purpose of copyright in Canada.* If we’re interested in the economic health of copyright owners, creators and users/future creators we can also ask:

  • How much do copyright owners and creators make under the current system?
  • What is the current cost to educational users?
  • What would be the net economic impact of this provision?

Answers to these questions are indispensible to a useful debate on copyright and would help to clarify what’s actually at stake in the case of course materials. Consider the Access Copyright-universities battle royale. Absent any facts, partisans can paint it as a case of nasty universities ganging up on poor artists. This becomes harder to do if we know that Access Copyright pays authors an average of $175 per year, and that Access Copyright was looking for a huge payout (UBC would have seen their tariff rise from $650,000 to $2 million per year). Context matters.

Or consider that much of the global drive for stronger copyright has been based on the assertion that the content industries are being decimated by unauthorized downloading. Dwayne Winseck, however, has crunched the numbers and finds that, with some small exceptions, the media industries are doing quite well, thank you very much.

In 2011, there’s no excuse for this state of affairs. The past decade has essentially been a case study in the effects of loosened copyright protection on creative production. These studies certainly exist; they should be a bigger part of the overall discussion.

Tellingly, in the debate over C-11, the government has not answered these questions, beyond bland assertions that their law will make things better, enhance innovation, and so on. But neither have critics taken the government to task for not producing evidence-based copyright reform. As always, if I’m missing something, please let me know, but pointing to stakeholder buy-in is not the same as providing empirical, non-interest-group-produced analyses on the potential effects of your reforms.

I was heartened that the UK government recently committed to an evidence-based copyright policy. I’m beginning to understand exactly how radical an announcement this was. Too bad we’ll likely have to wait for the next round of copyright reform (what are you doing in 2024?) for evidence-based copyright policy to come to Canada.

* I’m aware that Canada has some moral-rights shadings in its law, but this discussion is clearly about economic, not moral, rights.

Posted in Canada copyright, economics, evidence-based policymaking, Uncategorized | Comments Off on Canada’s copyright reform bill: Desperately seeking economists (and evidence)

Canada and the United States: Two Separate Countries, Part XVII

Think the “Beyond the Border” Canada-U.S. joint security arrangement will do anything to improve the two countries’ overall trade relationship, beyond the direct effects of the agreements’ provisions (provided they’re not overridden by Congress)? Think again:

Canada plans to fight the Buy American provisions in the new U.S. jobs package proposed by President Barack Obama and is surprised and frustrated that the issue has come up again, Canada’s trade minister said Wednesday.

Obama’s proposed $447 billion package includes a requirement that all “iron, steel, and manufactured goods” used in public buildings or works be supplied by American firms. The bill would allocate more than $100 billion toward the renovation of schools, the construction of roads and bridges and improving transit.

Some people, notably Chamber of Commerce President Perrin Beatty, are disappointed that the United States could propose such a protectionist plan:

The latest outbreak of protectionism from the United States government flies in the face of Ottawa’s much-touted effort to work with Washington to ease trade restrictions along the border, the Canadian Chamber of Commerce says.

“It’s of considerable concern to us,” Chamber president Perrin Beatty told the Toronto Star. “The timing is, of course, terrible in that it contaminates the discussions on how we can make the border function more effectively.

Speaking of the new border deal about to be announced by Prime Minister Stephen Harper and President Barack Obama, Beatty said, “The whole point of the exercise was to look at how we can enhance trade rather than putting impediments in the way.”

The fresh threat of trade war between the Harper government and the White House stems from the $447-billion (U.S.) jobs legislation announced by Obama last week. It includes Buy American provisions that could exclude Canadian companies from bidding on billions of dollars worth of economic stimulus projects south of the border.

The move, which caught the Canadian government off guard [emphasis mine], comes as Washington and Ottawa are in the final stages of negotiations over an historic bilateral pact meant to streamline border operations and enhance security and intelligence cooperation by the two governments. David Jacobson, the U.S. ambassador to Canada, says the deal may be announced by Harper and Obama in several weeks.

What I wrote last week (Sept. 10) about the “Beyond the Border” action plan:

An agreement where specific good rules outweighs the bad is a good agreement. I think that’s fair. But I’d be leery about balancing the bad in the agreement against a claim that it secures Canadian access to the U.S. market. As I noted back in February:

All the security-economic tradeoffs in the world can’t get around the fact that Congress and Parliament continue to make laws for their respective countries. And when push comes to shove, Congress will side with their constituents.

The Globe and Mail reports that the Buy American dustup hasn’t affected the border-security talks, although the article also notes:

In fact, the constant aggravation of Buy American clauses cropping up in U.S. legislation argues for a similar long-term approach to reaching a bilateral agreement on government procurement, Canadian officials believe.

Although that, too, could be problematic as the United States enters the protracted political season before choosing the next Congress and president in 2012.

To say the least. I’d be very, very curious to see what type of government procurement agreement Canadian officials believe they can get through Congress.

Let’s recap:

  1. Canada and the United States: Two separate countries, two separate political constituencies.
  2. Domestic U.S. politics trumps Canadian trade concerns.
  3. A bilateral agreement, especially for the United States, is about what’s in the agreement, nothing more and nothing less.

To expect anything else is madness.

Posted in Uncategorized | 1 Comment

What border-security agreements can and can’t deliver

According to the Globe and Mail, Canada and the United States have reached an agreement on that border-security deal they announced back in February. Interesting that the agreement will likely be announced almost 10 years to the day that the United States floated, and Jean Chrétien’s Liberals rejected, a “perimeter security” proposal in response to the 9/11 terrorist attacks. Now it looks like we have one. Wonder if anything in it’ll need Congressional approval?

The story, which relies on anonymous sources, doesn’t contain any other details. At all. So let’s use this opportunity to set out some criteria to judge the final agreement, shall we?

I’ll be watching to see if Canadian and American officials overpromise on what this accord can do. While it may be good (or bad) on its merits, the one thing it won’t do is bring any long-term certainty to the Canada-U.S. economic relationship.

A pessimist’s reading of recent Canada-U.S. history would note that the relationship is marked with agreements that were supposed to deliver long-term security of market access. The 1988 Free Trade Agreement. The 1994 North American Free Trade Agreement. The 2001 Smart Border Accord. Each of these has proven not to be up to the task of securing Canadian access to the U.S. market. The first FTA was challenged by the United States’ desire to do a trade deal with Mexico, NAFTA-led integration was no match for the U.S. security panic post-9/11, and the Smart Border Accord was not able to mitigate continued U.S. border-security fears.

See the thread running through each of these? No, it’s not that the United States is run by fiends who want to steal Canadians’ precious bodily fluids. It’s that the United States and Canada are sovereign countries with different political systems. So long as the two countries have separate political systems, the United States will always place its own interest first. That’s kind of obvious, I know, but it bears repeating.

If that interest is perceived to be threatened (like, say, if a terrorist comes over the Canada-U.S. border), no agreement in the world will protect Canada. We’ll be back to square one, negotiating a deal that will finally (finally!) guarantee Canadian access to the U.S. market.

The basic point is that anyone who claims that this latest agreement will provide a long-term framework for secure Canada-U.S. commercial relations doesn’t know their history.

This is not to say that Canada should never conclude a security agreement with the United States. The Smart Border Accord, for example, was a pretty nifty piece of statecraft on Canada’s part, as it basically implemented a bunch of policies Canada had wanted for a long time, but which the United States had never bothered to take seriously.

Rather, it’s an argument, which I first made back in February, that the agreement should be evaluated on its own merits. This  requires considering the specifics and deciding whether they make sense and whether, overall, the good outweighs the bad.

So, you ask questions like: do specific provisions increase security? How do they affect Canadians’ Charter rights, and things like right to privacy? How will they actually improve the smooth-functioning of the border? And so on.

An agreement where specific good rules outweighs the bad is a good agreement. I think that’s fair. But I’d be leery about balancing the bad in the agreement against a claim that it secures Canadian access to the U.S. market. As I noted back in February:

All the security-economic tradeoffs in the world can’t get around the fact that Congress and Parliament continue to make laws for their respective countries. And when push comes to shove, Congress will side with their constituents.

Posted in Canada-US relations, Perimeter security | Comments Off on What border-security agreements can and can’t deliver

Hyperbole-free copyright reporting: It can be done!

We have a winner! Tannara Yelland sticks to the facts and contributes some original reporting that captures the complexity of the Access Copyright situation without vilifying anyone (h/t Geist). Good stuff.

Kudos to Yelland and the Canadian University Press for boldly going where their professional colleagues daren’t!

Posted in Access Copyright | Comments Off on Hyperbole-free copyright reporting: It can be done!

The dismal state of the copyright debate

I really have to get back to writing proposals and journal articles, so I’ll keep this brief.

Just last week I was hoping that the Globe and Mail (or some paper, any paper) would do some actual reporting on the ongoing Access Copyright debacle. It’s an important issue that  would benefit from some journalist doing what journalists do best: laying out the facts of the situation.

Instead, we get Kate Taylor’s opinion piece, which is squarely in the “Opinions Differ on the Shape of the Earth”camp of journalism. Rather than trying to lay out the very real and very concrete issues at stake, Taylor creates a false dichotomy (“writers v. professors”) and doesn’t even try to grapple with what’s actually at play. (That she leads off her “writers v. professors” story with an anecdote about a copyright-critical author (which would put him on the side of the professors) kind of undercuts her entire premise.)

One of the big problems with the copyright debate, and Taylor’s opinion piece displays it in spades, is the  tendency to discuss copyright in terms of philosophies and morality, and us versus them. If you keep the debate abstract enough, it’s easy to come up with lines like “writers, artists and publishers against university professors and librarians.”

But at the end of the day, we’re not debating abstract philosophies (though they may inform our positions). Rather, the copyright debate is about specific rules and regulations, and who benefits from them. Most important, you cannot have an informed, useful discussion about copyright unless you actually discuss what the rules are, or what you want them to say.

When you don’t do that, when you push the actual policy debate off to the side with a “Whatever the wrongs and rights of the fight,” as Taylor does here, you’re left with a fact-free discussion that’s all emotion and appeals to the gut.

What does the Creators Copyright Coalition’s Bill Freeman’s comment, “You are talking about a pretty powerful lobby; you have a whole bunch of university professors ganging up on writers,” actually tell us about the ins and outs of the Access Copyright debate? What are his specific concerns? Why are “a whole bunch of university professors ganging up on writers”? Is that hyperbole, or are professors really out to kick sand in Margaret Atwood’s face?

When you actually look at the facts of the debate, it becomes obvious there are no white knights. You have budget-constrained universities facing a potentially massive increase in royalty payments. You have libraries, which already pay a small fortune for licences to online databases, asking themselves if they can afford the Access Copyright licence, especially since Access Copyright refuses to let people know what’s actually in their repertoire. You have Access Copyright, fighting for relevancy in a digital world. You have some authors concerned about their future in an era where copying is so easy. You have other authors who are annoyed at the paltry sums they actually get from Access Copyright. And you have publishers, the main beneficiaries from copyright, wanting to protect their piece of the pie.

Oh, and there’s the whole society angle that Taylor neglects completely: How should society balance the need for (cost-effective) research with the (potential) need for an incentive for creation and distribution?

Look: I know that copyright is a complex issue, and that reporters and columnists are generalists who can’t be expected to get every nuance of an issue that even copyright lawyers have trouble with. Been there, done that.

But there’s already enough mud slinging and opining in the blogosphere; we don’t need any more from the pages of Canada’s National Newspaper. Taylor had a fantastic opportunity to help clarify what’s at stake in the Canadian copyright debate by looking at how copyright actually works. Instead, she produced yet another piece of big-think journalism that trades in generalities and platitudes and ends up muddying a debate that is desperately in need of clarification.

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