Pitfalls of Wanga’s Copyright Bill

Late last year, Homa Bay Woman Rep Gladys Wanga introduced amendments to the Copyright Act that have been at the centre of discussions recently. The amendment Bill is set for final reading before the National Assembly this week.

First, the Bill seeks to revise and set the formula for sharing of revenue between the artistes/copyright holders and telecoms companies.

Currently, only 16 percent goes to artistes from the Skiza music platform, with 25 percent going to the taxman and 51 percent to Safaricom. The Bill now proposes to fix the share of generated revenue going to artistes at 52 percent.

There are concerns with this proposal. Any student of economics can easily point out that this proposal is simply price-fixing through legislation, which always ends up creating more problems than solutions in the market. At the same time, there is a fair argument that Safaricom needs to re-look their revenue-sharing formula.

For the more than 13 years that the Skiza music platform has been in existence, it is estimated to have generated close to Sh100 billion cumulatively. Safaricom has definitely re-couped its return on investment. It has kept more than Sh50 billion after-tax revenue.

So, continuing to hold a big share of the generated revenue for all these years has created this problem where Parliament wants to fix the formula through legislation, an issue it doesn’t agree with.

Ms Wanga had also proposed repealing of section 35B of the Copyright Act, which states that a person whose rights have been infringed by content accessed through an internet service provider may request for the content to be removed in order to stop the infringement/piracy.

Dealing with digital piracy is difficult because of the free availability of illegal digital content through online copyright infringement that happens almost every minute. The use of website-blocking to fight digital piracy is increasingly becoming common in many jurisdictions.

This is not done in isolation but together with other government-led interventions. The unfortunate reality is that the government has reduced digital piracy to an issue for internet service providers to handle through website-blocking, which shouldn’t the case.

It’s important to note that website-blocking only forms part of the anti-piracy efforts but doesn’t eliminate online piracy.

The efficacy of website-blocking has been established as consumer behaviour change. It simply increases the time and willingness of consumers to find alternative sites after many of them have been blocked, re-directing them to legal sources. Therefore, website-blocking reduces the amount of pirated content that is accessible but does not stop piracy.

The next important thing to note is that digital piracy arises as an effect of a vertical externality in the content production market. This, therefore, means that the responsibility to contain digital copyright infringement shouldn’t lie with one stakeholder (internet service providers) but should be a shared responsibility.

As currently designed, internet service providers (ISPs) carry the heaviest load of fighting piracy when it is the government’s prerogative to do the heavy lifting.

ISPs are, for example, heavily penalised for any failure to bring down content flagged for copyright infringement. The questions is: why should ISPs be penalised for an issue that is not part of their core business? They are just an intermediary.

Also, website-blocking involves technical support costs for administering the blocking process. So, ISPs are being given the responsibility that is not part of their core business to invest in and also be penalised for any failure. Of course, anyone in the position of the ISPs will take an issue with this section of the law because it disincentives them.

This proposal faced heavy resistance from musicians who put a spirited campaign and the repeal was dropped. But it opens up an important conversation about how Kenya handles copyright infringement.