Proposed changes by the Australian government to copyright laws have been met with a mixed reaction from the local music business. As part of the proposed reform of the country's Copyright Act, unveil

Proposed changes by the Australian government to copyright laws have been met with a mixed reaction from the local music business.

As part of the proposed reform of the country's Copyright Act, unveiled yesterday (May 14), consumers will be allowed to transfer contents from legitimate CDs to iPods, MP3 players and computers. Passing on copied material to others remains a breach of copyright.

Under the existing Copyright Act, consumers who make personal copies of recorded music face penalties ranging from A$500 ($350) to A$5,000 ($3,500).

In announcing the reform, attorney general Philip Ruddock said the proposals would provide greater enforcement measures to combat piracy. For the first time, police will be able to issue on-the-spot fines. Under the new rules, law enforcers will also find it easier to establish copyright piracy in court.

Ruddock says the copyright law changes would benefit consumers and copyright holders in the technology age.

"Copyright is important and should be respected," Ruddock said. "Everyday consumers shouldn't be treated like copyright pirates. Copyright pirates should not be treated like everyday consumers."

The final form of these changes will depend on specific amendments approved by the country's parliament.

A draft exposure bill including will be issued in the near future.

Australian Recording Industry Assn. CEO Stephen Peach said the proposals, "send a strong message that downloading music from pirate sites and trading in counterfeit CDs is against the law."

He added, "The recording industry remains concerned however that this legislative amendment may create consumer misunderstanding of what will be 'legal' and 'illegal' copying."

Brett Cottle, CEO of the Australasian Performing Right Assn., said he was "extremely disappointed" that private copying was being allowed without providing for any financial return to copyright owners.

APRA, like other organizations such as the Music Managers Forum and film industry body Screenrights, have argued that a statutory licence fee should be built into the cost of hardware and software used to copy copyright material.

"The government's decision will arouse considerable disappointment and alarm both in Australia and internationally," Cottle suggests. "It is doubtful that the decision is consistent with Australia's international treaty obligations."

In a victory for the recorded music sector, the government also plans to remove the 37-year old statutory cap on licence fees paid by commercial radio broadcasters for using sound recordings. Currently, radio's peak body Commercial Radio Australia pays an average rate of 0.4% of gross income on behalf of 160 stations -- amounting to A$2.7 million ($1.89 million) a year.

Says Peach, who is also CEO of the Phonographic Performance Company of Australia, which represents Australian recording artists and record labels, commented, "Since this protective price cap was introduced in 1969, FM radio operators have built large and profitable networks based on the music that is played every hour of the day, but for which very little is paid."

Radio sources estimate that the sector generates more than A$850 million ($595 million) each year.

The government wants the PPCA and the CRA to "negotiate a fair market rate without legislative intervention", Ruddock says. If both sides cannot agree on fees, the Copyright Tribunal would be called upon to adjudicate. It is expected that the PPCA will push for a payment of 2% to 4.5% of advertising income, as is the case in some overseas countries.

Joan Warner, CEO of the CRA said, "It is of significant concern that the government has chosen to take the side of the multi-billion dollar global record industry over Australian radio stations at a time when costs are rising and revenues are unstable for the local industry - particularly for radio broadcasters in regional areas." Warner adds, "In addition, commercial radio stations have commenced planning for the digital rollout, at considerable expense, of superior radio services to all Australians using digital radio technology."