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SOCAN to seek tax on ringtones

Last Updated: Monday, June 20, 2005 | 3:04 PM ET

SOCAN will argue this week that there should be a tax on cellphone ringtones to compensate recording artists for the use of their work.

SOCAN – the Society of Composers, Authors and Music Publishers of Canada – is the organization that lobbies for copyright protection on behalf of songwriters.

Its representatives will appear before the federal Copyright Board starting Tuesday to make the case that artists deserve a share of the roughly $1.5 million generated annually by ringtone sales in this country.

Ringtones are the electronic jingles, based on pop songs, used to customize the ring prompted by an incoming call on a cellphone.

"It's a brand new use of music. As a result, it requires payment for that use," Paul Spurgeon, a lawyer for SOCAN, told the Canadian Press.

If SOCAN's argument is accepted, the tariff would cover everything "from bleeps and blips to the actual MP3 of a song," Spurgeon added.

SOCAN is hoping to collect 10 per cent of the country's ringtone revenue, with a minimum tax of 20 cents on each tone. The typical cost to download a ringtone is between $1 and $3.

It also wants a 15-per-cent tariff on ringbacks – the sound heard by a caller while waiting for a person to answer a cellphone.

After SOCAN presents it case, the Copyright Board will also hear from groups that oppose the tax. Chief among these is the Canadian Recording Industry Association, the lobby group that represents Canada's major record labels.

Mobile-phone companies like Bell and Telus also oppose the measure, as does the Canadian Wireless Telecommunications Association.

SOCAN, whose members include the likes of Nelly Furtado, Avril Lavigne and Sam Roberts, does not expect a ruling right away.

In the U.S., it's estimated that ringtones are a $300-million-a-year business.

In Britain, a song adapted from a ringtone has been at the top of the singles charts for four weeks.

Crazy Frog Axel F, a version of Harold Faltermeyer's 1985 synthesizer instrumental Axel F, is the first ringtone to cross over to the pop chart, as well as the first to reach the No. 1 position.

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