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

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?

[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.

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.

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: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.

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.

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.

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.