Canada to Tax MP3 Players $21/GB of Storage

einer writes : "A brief article on some new legislation scheduled to take effect at the beginning of next year. This tax would raise the price of an archos jukebox from roughly $350.00 to $640.00 (American). "Comments and objections are due by May 8, 2002." Looks like I'm headed to pricegrabber." Update: 03/13 19:36 GMT by M : We did a big story on this a few days ago (although people keep submitting it).

Comments

*Ahem*

[EnVisiCrypt]

Hasn't this been mentioned before?...

Honestly though, I would hate to live in Canada right now, my iPod would cost about $150 more.

Also, it begs the question are they measuring by 1,000,000 mb or 1,048,048 mb? Not that it makes that big of a deal, I'd just be curious to see.

Re:*Ahem*

[Jester998]

They are measuring capacities as 1GB == 1,000MB. If you go back and read the PDF from the last time this story was posted (yesterday or the day before), it explicitly says in there that the levy is $0.021/MB, then in the next paragraph says $21/GB, so they must be using 1GB == 1,000MB, or somebody's on really good crack (not unfathomable, considering we're talking about politicians).

Ouch, I think Apple will fight this...

[Daniel Wood]

Why? This will raise the price of the iPod for Canadian customers by $100CAD. Apple Canada now sells the iPod for $599CAD($25USD less than in the US), this would raise the price of the iPod for Canadian customers to $699CAD($40USD more than we pay for the iPod).

I also think Apple sees this as just a preliminary step. What happens when they try to tax all media storage?

what qualifies as an mp3 player?

[jeffy124]

does my regular machine count? thus when i buy a new harddisk i'm paying an add'l $21/gig? or are they only referring to portable things like the iPod, but then waht about laptops?

Re:what qualifies as an mp3 player?

[Deagol]

Good point. Maybe we'll see a convergence of media players and PDAs (it's already happening with cell phones).

In fact, this raises a very good point. Moore's law will ensure that handheld devices will eventually reach a very good general-purpose state, much like the PC. In 5 years when the iPAQ can hold 20GB of data, run 30-fps MPEG2 decompression, and play any media file you want in addition to running most general PC software, what then? Will they tax that, too?

This law is simply a knee-jerk cure for a symptom, and not an underlying cause. It'll only get worse.

This could backfire

[anthony_dipierro]

The only media taxed is media "that is intended for use primarily to record and play music". So if Apple wants to avoid the tax on the iPod, for instance, all they have to do is remove all the anti-circumvention software which disallows use of the iPod for non-music storage.

Re:This could backfire

[madburn]

...remove all the anti-circumvention software which disallows use of the iPod for non-music storage.

There is no such software on an iPod. It is simply a firewire hard drive with special firmware that lets it play audio from a specific folder when not jacked into a firewire cable. iTunes knows how to populate the special music folder, but there are no limitations on using the iPod as a mountable disk.

Re:This could backfire

[sillyopolis]

Actually all they have to do is remarket the iPod as a generic storage device or a platform, and make software optional (but readily available). This does raise some interesting questions as to what constitutes storage media and/or an MP3 player.

Depends on how you look at it...

[OneFix]

One way you have an MP3 player costing double what it should.

But, on the other hand, you are paying for a right to store whatever you want on there (mainly copyrighted music).

As a matter of fact, if you own one of these devices, the way I see it, they are saying that it is your duty to use it to store copyrighted music on it, because if you used it for something else, then you'ld get no return on your tax dollars.

Then again, just buy a Rio Volt...it only stores ~1/2 GB, but it is on a CD...

Re:Depends on how you look at it...

[anthony_dipierro]

But, on the other hand, you are paying for a right to store whatever you want on there (mainly copyrighted music).

This would be fine (and I'd support the tax) if there was an AHRA-ish clause exempting users of this media from copyright infringement suits. But I looked at the proposal, and I couldn't find such a clause.

Legalized napster for 13 USD/gig (storage, not download space)? I'd take it in a second.

This is crazy!

[Deagol]

Somebody in Canada's government is sucking some serious corporate dick. Not that the U.S. is any better. My own beloved Mr. Hatch of Utah is guilty of the same thing, "Napster Hearings" or not. But then again, don't all senators?

Someone needs to organize a well-publicized "pirate" day. Buy an MP3 player or some blank CD-Rs, or anything that gets "taxed" in this way. Contact the news media, and say since you've already paid the price for piracy, you're gonna go out in front of some huge media chain and give out copies of a ripped-n-burned popular CD (choose a band you don't like :P) in front of the cameras.

Being hauled off by the police will make great media coverage. Get some womderful group to take the case (EFF?) and fight this up 'till the bitter end and have these laws squashed.

Pure genius

[codexus]

With a little help from Moore's Law the canadian copyright office is going to be the richest organization on earth in a few years :)

A shift to self-upgrading devices?

[Deagol]

Since the tax is on "non-removeable" storage, I see a shift in player construction. All devices will be sold (fairly cheaply) sans the storage. When you purchase the device, you can buy an optional card/stick/hd/whatever.

Of course, then all medial will get taxed, then all hell will break loose as the hard drive and memory makers challenege the law into oblivion.

Re:A shift to self-upgrading devices?

[Jester998]

Actually, there was on article on /. the other day about this whole thing... this particular story is just one small excerpt out of the whole peice of legislation.

Under the new laws, levies on CD media will go up to $0.59 (from the current $0.25 (I think)), and ALL media in MP3 players will be levied $0.021/MB, or $21/GB (yeah, they're ignoring the whole base-2 thing, apparently). Flash cards and other removable media is levied too, so there's no way around it.

I live in Canada, and this sucks. :(

Re:A shift to self-upgrading devices?

[Deagol]

Read the article, as they post a clip of the law itself:

(g) $21 for each gigabyte of memory in each non-removable hard drive incorporated into each MP3 player or into each similar device with an internal hard drive that is intended for use primarily to record and play music. (approx. $13.26 USD per GB)

Simple work around. Sell players (without any storage included) that support commodity computer components for storage, and sell these items next to the players.

Like I said before, if they tax standard hard drives this way, or they tax the device on its potential storage capacity (can accept devices from 1-120GB), then there will be hell to pay for the lawmakers.

Re:A shift to self-upgrading devices?

[cicadia]

If you look up a bit, you'll see this clip, too:

(d) 0.8 for each megabyte of memory in each removable electronic memory card, each removable flash memory storage medium of any type, or each removable micro-hard drive;

The levy is being raised on commodity components - all CD-R, CD-RW, DVD-R and smartmedia/compactflash items. They don't have to base anything on potential storage capacity; if you buy a player with no storage, like a discman or minidisc player, then you are taxed on the media you buy.

Re:A shift to self-upgrading devices?

[Deagol]

You are correct, of course. Man, this bites.

Great idea!!

[Unknown Poltroon]

You go first!!!

Again, to dispel rumours

[MrAndrews]

This legislation will not pass. There aren't enough big media organizations in Canada to buy something like this, and Industry Canada has been trying for some time to push a high-tech agenda, which this would more directly hurt. Most Liberal MPs come from areas of the country where high tech is important, so they wouldn't risk their seats over something like this. They've probably leaked this information so CTV and CBC get hold of it, the public goes nuts, and they have an excuse to kill it. There will be no tax on recordable media.

Re:Again, to dispel rumours

[Jester998]

"There will be no tax on recordable media"

What cave are YOU living in? THERE ALREADY IS!
The current levy (a.k.a. "tax") is somewhere around $0.25/CD-R.

Don't doubt that this law WILL pass... we're talking about politicians, after all.
On the upside, they're essentially making it legal to pirate music, since you're already paying for it.

Re:Again, to dispel rumours

[cicadia]

The current levy is $0.21CAD per CD-R or CD-RW, $0.77CAD per CD-R-Audio, and $0.29CAD per audio cassette. See the CPCC FAQ list for details.

As regards piracy, if you do live in Canada, it's quite likely that you haven't actually been pirating music. Canadian copyright law states that copying recorded works for personal use is not an infringement of copyright. It's not even frowned upon. It's totally legal to copy your friend's CDs and make MP3s out of them. It's probably legal to buy a CD, copy it, and return it, as long as the copying is done for personal use.

Re:Again, to dispel rumours

[Anonymous Coward]

Canadian copyright law states that copying recorded works for personal use is not an infringement of copyright.

Does this imply that gnutella (peer to peer) is legal for both the sender and receiver, assuming no money changes hands and both sender and receiver live in canada? If so, shit, I'm moving.

Re:Again, to dispel rumours

[MrAndrews]

Sorry, probably better to put it this way: there will not be a dramatic new tax on recordable media. The only reason the current tax works is because no one but the hardcore tech people know it's there in the first place. Politicians will not sponsor the (mostly foreign) music industry at the expense of their high tech industry. The original tax took a lot of dealing to pass at its current level, so this current proposal is probably for show only.

Re:Again, to dispel rumours

[cicadia]

I wish it did. Unfortunately, copying for personal use is not considered the same as copying for distribution. I've also heard opinions that you (as the receiver) have to be the one doing the copying (whatever that means, on the Internet). So it would be legal for you to borrow a CD and copy it, but not for the owner of the CD to give you a copy. Go figure.

You might be able to use services like this legally, if you can claim that you were only copying for your own use (and not for the purpose of sharing).

The relevant section of the Copyright Act can be found here.

Desktop Computers

[Deanasc]

So will desktop computers be exempt from this tax? Afterall they can store music and have nonremovable hard drives. And Tivo what about those? Can't they record the digital music tracks on the cable and satallite systems?

Smuggling

[Violet Null]

So Canada will smuggle tobacco into the US, and the US will smuggle MP3 players into Canada.

Seems fair.

Trivial to circumvent this law!

[BitterOak]

As I understand the article, MP3 players are taxed by the megabyte. The solution is simple! Sell the MP3 players without memory! If people order the Smartmedia card or Compact flash memory separate from the player, it wouldn't be taxed, right? (After all, you could be using it for your digital camera.)

I bought my MP3 player from a Canadian store (mp3playerstore.com). I purchased the unit with 256Mb of memory, but I had the option of buying it with no memory at all.

So, I don't understand how this law is going to work. Am I missing something here?

Re:Trivial to circumvent this law!

[dstone]

If people order the Smartmedia card or Compact flash memory separate from the player, it wouldn't be taxed, right? (After all, you could be using it for your digital camera.)

I hope you're right. But consider the fact that removable media like CD-Rs, CD-RWs, DVD-Rs, etc, will also be heavily taxed under this proposed legislation, despite the fact that there are lots of non-music uses for them.

In other words, Joe Consumer or Joe Business buys a pack of pure data CD-Rs (not "audio" labelled) for simple data backup purposes, and they will get hit with a significant tax per disc under this proposal.

Don't burn the parliament bulidings yet...

[V_M_Smith]

Remember, this is still only proposed legislation! It still needs to be debated and potentially revised. If this proposal even passes, in all likelihood those levy numbers will come down. As the old adage says, don't make your first offer your best offer -- of course the recording industry wants the proposed numbers to be high, otherwise they have nowhere to go to compromise.

The Boston MP3 Party

[ScottForbes]

Someone needs to organize a well-publicized "pirate" day. Buy an MP3 player or some blank CD-Rs, or anything that gets "taxed" in this way. Contact the news media, and say since you've already paid the price for piracy, you're gonna go out in front of some huge media chain and give out copies of a ripped-n-burned popular CD (choose a band you don't like :P) in front of the cameras.

We need to have this day whether Canada passes its tax or not. We need to have it in Boston, Massachusetts, at the site of the original Boston Tea Party; ideally we need to find a ship with some pallets of shrinkwrapped CDs on board, and dump them over the side. Call it the Boston MP3 Party, and use it to point out that people are paying the RIAA $20 for music that should only cost around $3.

(And don't start bleating to me about how the RIAA needs $20 per CD to "cover its costs." The RIAA is a bloated, inefficient cartel with a business model that has gone the way of the buggy whip. The DMCA is the recording industry's Endangered Species Act -- it's as if a congress of dinosaurs voted to outlaw mammals and asteroids.)

The Boston Tea Party was a heroic act of civil disobedience against a state-sponsored monopoly -- a monopoly that obtained favorable legislation to preserve its own profit, sought to control distribution, and leveraged its power to drive competitors out of business. 229 years later, here we are again; we just need another Sam Adams (the man, not the beer) to get the ball rolling.

Re:The Boston MP3 Party

[subgeek]

The DMCA is the recording industry's Endangered Species Act -- it's as if a congress of dinosaurs voted to outlaw mammals and asteroids.

The Boston Tea Party was a heroic act of civil disobedience against a state-sponsored monopoly

wow, funny and insightful. there should be extra bonus points for that.

so does the congress of dinosaurs more accurately point out the antiquated hype-crap-to-the-kids business model or the brain-the-size-of-a-pea mentallity of the legislators making laws to protect that business model?

Government/Music Industry Greed

[Easy2RememberNick]

Sh!t this really pisses me off. I live in Canada and I was mad when the taxed CD-R media because they thought that everyone was pirating music. What if you store your family photos, or e-mail or hundreds of other non-music data???

What about Sony MiniDisc players? They record 80MB and a lot of newsmedia people use it now instead of microcassette recorders. I'd like to see Mr.Reporter's reaction to that!