Economic Analysis of Law

The Copyright Board issued yesterday its decision certifying SOCAN's Tariff 24 for ringtones.   The Board set a base rate of 6% of the price paid by the subscriber for the ringtone (net of any network usage fees) with a minimum of $0.06 per ringtone.  The main legal controversy before the tribunal was whether the delivery of ringtones is "communication to the public" but I don't want to comment on that here.  Instead, I want to comment on a more fundamental issue, and ask why should the royalties be set by a tribunal at all?  Why wouldn't copyright holders and ringtone suppliers enter into voluntary agreement and decide who should pay and how much?  Ordinarily, prices are determined by the "market".  Why then are these prices set in a strange way in which one seller (SOCAN) proposes prices and then, over a period of three years lawyers, prominent economists and other experts try to convince a tribunal what those prices should be?

Professors Jame Stribopoulos and Moin Yahya recently published an article in the Osgoode Hall Law Journal entitled, Does a Judge's Party of Appointment or Gender Matter to Case Outcomes? An Empirical Study of the Court of Appeal for Ontario.  The abstract explains:

This study reveals that at least in certain categories of cases, both party of appointment and gender are statistically significant in explaining case outcomes.  Between these two variables, gender actually appears to be the stronger determinant of outcome in certain types of cases.  While these findings are cause for concern, this study also points toward a simple solution.  Diversity in the composition of appeal panels both from the standpoint of gender and party of appointment dampened the statistical influence of either variable.  In other words, in the case of gender, a single judge on a panel who is of the opposite sex from the others, or in the case of political party, a single judge appointed by a different political party, is sufficient to eliminate the potential distorting influence of either variable.  This finding suggests a need to reform how appeal panels are currently assembled in order to ensure political and gender diversity and minimize concerns about the potential for bias.

The recent proposal from the Songwriters Association of Canada to fully legalize peer-to-peer file sharing of music by adding a $5 monthly charge to the cost of Internet access (and similar proposals floating south of the border) has brought renewed attention in the role of levies and tariffs collected by copyright collectives in Canada.  I am now beginning a research project that looks at the broader implications of the expansion of collective administration of copyrights and the use of levies and tariffs.  Since the topic is current, I thought I'd use the blog not only for sharing some of my initial thoughts, but hopefully, to solicit some ideas that will help me to shape them.  Therefore, I'm posting below the description of the project and the questions  it seeks to answer.  Comments on or off the blog will be highly appreciated.  Here it is: