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.

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