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How Russian internet tax should be collected?

Despite the negative review of administration of Russian president and others state authorities, top managers of already accredited collecting societies can’t refuse from idea of internet tax. The decision concerning to internet tax must be made as soon as possible. Little bit about the draft itself.

Under published draft of amendments to Russian civil code informational intermediary (i.e. internet service provider) must conclude agreement with accredited collecting society. But there is one thing. Draft introduces new kind of licence – global licence, contract of adhesion. Global licence must be concluded between subscriber and accredited collecting society.

So the parties of global licence agreement are accredited collecting society and subscriber and this agreement must be concluded through the internet service provider. When subscriber concludes agreement with internet service provider in order to receive internet access he simultaneously accepts conditions of contract of adhesion.

If subscriber does not want to accept public licence he/she will stay without internet access. But if the subcriber accepts this licence he/she can download movies, music without limits for 300 rouble in year. The cheapest content you can find in Russia. Why to acquire any licence in Russia for legal use of content, if any subscriber can buy it approximatelly for 5 USA dollars in year.

And how the money under new accreditation must be collected? First of all licence fee, if you can call it so, is included in your bill for internet access. Accredited collecting society only collects money from informational intermediary (i.e. internet service provider). Each informational intermediary is obliged to conclude with accredited collecting society “agreement on payment of monetary sums in order to pay remunerations” to right holders. Simply.

Draft also proposes to include in accreditation the rights of music and book publishers, record labels, movie studios. For draft it does not matter who you are and what kind of right holder you are. Everyone is equal under the law. Besides, accredited collecting society will monitor internet activity of subscribers. Otherwise it is not possible to define what kind of content and what exactly each subscriber has downloaded.

Also retroactive effect of the law is proposed. According to explanation note, only 1% of right holders have refused from services of Russian accredited collecting societies. Does it mean that such right holders like Universal, Sony Music, Warner Music, EMI and other publishers, record labels and artists are satisfied with practice of Russian accredited collecting society and happy to be their “clients”?