AK Reply Consolidation Nov 21 2013

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[2] Access Copyright filed the 2014-2017 Proposed Tariff almost seven months ago, onMarch 28, 2013. If it were truly interested in judicial economy and the administration of justice,

and if it genuinely believed that the two proceedings raise the same legal and factual issues,

Access Copyright could have requested to consolidate the proceedings many months ago, rather

than waiting until a month before the Objectors have to file their Statements of Case.

[3] If Access Copyright sincerely believed that its existing case and interrogatories from the2011-2013 Proposed Tariff are sufficient to support of both proposed tariffs, but it only occurred

to it that this were the case when it filed its Statement of Case, then it could have requested to

consolidate them at least two months ago. Indeed, it is difficult to believe that the notion of

consolidation did not occur to Access Copyright in March of 2013, when it filed its proposed

tariff for 2014-2017 or indeed even much earlier.

[4] And as the Board will be fully aware, the schedule of the current hearing, includingpossible changes to it, has been a live matter before the Board since I filed my request regarding

a reference and an adjournment two weeks ago. This would have been an opportune moment forAccess Copyright to support an adjournment in order to let it file a proper application to

consolidate the proceedings, and it would have allowed the Objectors sufficient time to consider

the merit of its request, and presumably would have required a new schedule in order to let the

Objectors prepare their case, after reviewing Access Copyrights full new submissions.

[5] But Access Copyright did not do that. Rather, in two submissions, on November 7 andNovember 11, it stressed the need to proceed with the 2011-2013 hearing without any delay,

urging the Board to decide whether to grant a temporary adjournment quickly and separately

from the question of the reference, and without ever mentioning that it had been contemplating

filing an application involving a significant change in the current proceedings. Moreover, AccessCopyright did not disclose that it would be seeking to adduce new evidence, even though the

new evidence is a supplemental report by NERA, one of its consultantsnot the kind of

evidence that would have popped up spontaneously two days ago and out of thin air. This is

clearly the kind of evidence that could have been produced long ago.

[6] When Access Copyright made submissions on the question of whether the currentproceedings should be temporarily adjourned and possibly rescheduled, it must have already

known that it would be seeking to consolidate the cases and file the newly commissioned NERA

report, but it chose not to disclose this information to the Board, even though this would have

been highly relevant information. It is not difficult to imagine that had Access Copyright

disclosed its plans to the Board before it decided not grant even a three-week temporary

adjournment, the Board might have been more amenable to make changes to the current

schedule.

[7] Since Access Copyrights request did not attempt to explain the extraordinary delay infiling its unusual request, it would be open for the Board to draw the inference that this

unexplained delay has been calculated to gain unfair advantage, and that Access Copyright had


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waited until the last moment, until after the ACCC withdrew from the case, and until after the

Board decided against granting a temporary adjournment, before it filed this surprising request.

[8] The advantages for Access Copyright are rather obvious. The ACCCs withdrawal andthe lack of any filed objection from any other educational institution to the 2014-2017 proposed

tariff means that Access Copyright would not be able to rely upon interrogatory responses in

order to gather the kind of evidence that forms the basis of its current proposed tariff. As a result,

the factual basis for the 2014-2017 proposed tariff would be even thinner and even less reliable

than the which it filed for the 2011-2013. The request to consolidate looks like an attempt to

obtain a snap approval of an extra tariff on the basis of non-existing record. Granting this request

would not only be extremely unfair, but would be an abuse of discretion.

II. The 2014-2017 proposed tariff raises new issues of fact[9]

If Access Copyright sincerely believed that its existing case and interrogatories from the2011-2013 Proposed Tariff are sufficient to support of both proposed tariffs, it would not have

requested to adduce newevidence to address the value of the tariff to be certified for the 2014-

2017 tariff period. If the two proposed tariffs raise the same factual issues, no additional

evidence would be necessary. Thus, Access Copyrights request to adduce new evidence

addressing the 2014-2017 tariff belies its claim that the two proceedings raise the same factual

issues. What actually would have been necessary is an application providing reasons for the

delay, and explaining, rather than asserting, why and how its current case supports the 2014-

2017 proposed tariff.

[10] Moreover, despite Access Copyright mere assertions, the two proposed tariffs could notpossibly raise the same issues of fact. Access Copyright Statement of Case relies primarily on

three factual grounds: (a) course packs reports made by educational institutions between 2005-

2010; (b) the move form printed course packs to digital materials; and (c) the claim that the rates

that it negotiated with UofT, Western, and the AUCC, ACCC, and Proprietary Colleges are

directly indicative of the fairness of its proposed tariffs. Assuming arguendo that these facts

support its current case (and they do not), they cannot possibly support the 2014-2017 proposed

tariff.

[11] First, data on printed course packs that is almost ten years old tells very little about theuse of digital materials almost a decade later in markets undergoing radical and disruptive

changes as markets for published works are.

[12] Second, the licenses the Access Copyright negotiated in early 2012, before Parliamentpassed the Copyright Modernization Act and before the Supreme Court decided six important

copyright cases offer a very poor proxy, even if otherwise they would offer a reliable benchmark

(which they do not).


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[13] Third, UofT and Western are renegotiating their licenses with Access Copyright and haveboth made it clear that there would be no new license, unless the terms are sufficiently

favourable. The fact that both UofT and Western are clearly dissatisfied with their current

licenses has not been disclosed by Access Copyright in its Statement of Case. Moreover, a

growing number of AUCC and ACCC institutions have already decided that those licenses areno longer valuable for them. At this point, this should be sufficient indication that the factual

issues are not the same, and that Access Copyrights case for the 2011-2013 proposed tariff

cannot possibly justify the same rates for the 2014-2017 period.

[14] Moreover, the proposed rates for the 2014-2017 period are even higherthat the proposedrates for the 2011-2013 period, as revised in Access Copyrights Statement of Case. In fact,

Access Copyrights proposal to consolidate the two proceedings is similar to a bank that

advertises some short-term benefit (no legal fees, or judicial economy) to induce non-

suspecting borrowers to lock-in an even higher interest rate, when the bank anticipates very well

that interest rates are likely to decrease in the near future. Granting such a request may enhanceAccess Copyrights revenue, but not the administration of justice.

III. The 2014-2017 proposed tariff raises new issues of law[15] It is inconceivable how Access Copyright can assert in good faith that both proceedingsraise the same legal issues, when Access Copyright conspicuously fails to mention in its

consolidation request letter that the 2014-2017 proposed tariff applies not only to the

reproduction right, but to a new and mysterious right of making available to the public by

telecommunication in any material form whatever. Whether such a right exists, whether it exists

independently of other rights and can be the basis of a tariff, and if it does, what does it actuallycovers, is a serious and novel legal question as the Board is well aware from other concurrent

proceedings. Moreover, even if such a right exists, whether Access Copyrights members and

affiliates have ever authorized it to grant licenses covering this right may require some serious

factual inquiry. Since the 2011-2013 proposed tariff does not pertain to this right, it cannot be

said that both proceedings raise the same issues.

IV. Access Copyrights request offers another opportunity to put these proceedingsback on the right track

[16] Granting Access Copyrights request and consolidating the two proceedings as it requestswill not enhance the administration of justice and judicial economy. To the contrary, it

demonstrates once again the serious flaws that underlie these proceedings and to which I have

referred to in detail in my letter from November 6, 2013.

[17] The upshot of my detailed request was that judicial economy and the administration ofjustice, especially in light of the public interest involved and the collapse of the adversarial


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process before the Board, justify determining the effect of an approved tariff, by way of a

reference, before the current case proceeds.

[18] Put differently, my request emphasized that proceedings with the current case withoutmaking this prior determination about the effect of the approved tariff would not only be

wasteful and inefficient, but also jeopardize the ability of the Board to pursue its mandate in the

public interest and while preserving the substantive and procedural rights of those before it and

those affected by its decision. In short, it would be unreasonable for the Board to proceed with

the current hearing under the current schedule.

[19] It should go without saying that if it would be unreasonable for the Board to go aheadwith the current flawed process and approve one proposed tariff, it would be exponentially more

unreasonable to consolidate the hearing and approve two tariffs for the price of one, given the

new factual and legal issues that are raised and the apparent ambush tactics.

[20] I note that the Boards terse notice from November 13 offered no reasons for denying myrequest for a temporary adjournment. The Board only provided a tautological explanation that

the application for an adjournment was denied because in the Boards opinion the proceeding

should not be postponed. In addition, the Board simply declared that no decision by the Court

[if a reference is made] would render the proceedings before the Board moot, without providing

any explanation to that assertion, and without explaining why it might disagree with my

submission that the outcome of a reference might render the proceedings effectively moot. I

would add with some regret that I do not believe that this ruling provided adequate reasoning

pursuant to the clear standard that the Federal Court of Appeal set in CAB v. SOCAN.1

[21] It seems to me, however, that if the Board is willing to reconsider its previous ruling,Access Copyrights current request, surprising and unfair as it is, provides an opportunity to

place the current proceedings back on the right track. With all its flaws, this application

underscores why rushing to approve the proposed tarifflet alone two proposed tariffswould

be misguided, and shows how a temporary adjournment would allow the Board to devote

sufficient time and attention to considering how to proceed in the most effective way to ensure

the integrity of these proceedings before the Board, and guarantee that they are conducted in a

just and judicially efficacious way.

1Canadian Association of Broadcasters v. Society of Composers, Authors and Music Publishers of Canada , 2006

FCA 337, para 11.


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[22] Finally, I must protest in the strongest possible terms that Boards decision to allow theremaining objectors and presumably the public, pursuant s. 2 of the Directive On Procedure, only

two (2) days to Comment on Access Copyrights consolidation request. Such a short notice is

palpably procedurally unfair, especially in view of the Boards unreasoned denial of my modest

request only a few days ago for an adjournment in all of the circumstances.

Respectfully submitted,

Ariel Katz

CC: Randall HofleyNancy Brooks

David FewerSean Maguire

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AK Reply Consolidation Nov 21 2013