Car rental companies are infamous for encouraging customers to sign up for expensive liability insurance policies. Since many renters already have coverage from their own automotive insurance policies or can rely upon insurance coverage provided by their credit card issuer, the decision whether to sign up for a costly additional policy frequently depends upon who is paying the bill. If the individual is on the hook, they will often decline coverage and rely on their existing policies. If someone else is paying, it becomes easier to justify signing up for the additional coverage.

Last week, the Association of Universities and Colleges Canada, which represents dozens of Canada’s leading universities, signed up for one of the most expensive copyright insurance policies in Canadian history. My weekly technology law column (Toronto Star version, homepage version) notes the policy comes in the form of a controversial model copyright licensing agreement with Access Copyright, a copyright collective that licenses copying and distribution of copyrighted works such as books, journals, and other texts. Should AUCC members sign the agreement – it falls to each individual university to decide whether to do so – they will pay $26 per full time student per year for the right to copy works from the Access Copyright repertoire.

The deal marks a significant increase from the previous agreement, which had cost students less than four dollars annually plus ten cents per page for materials included within printed coursepacks. The new fees are likely to be passed along to students, who will ultimately bear the burden of the copyright arrangement with higher tuitions.

Those students may be puzzled by the AUCC decision to settle on an expensive new licensing model. Over the past year, many universities, including York, Queen’s, UBC, and Waterloo have operated without Access Copyright altogether.

Those schools have identified licensing alternatives such as campus wide electronic database licenses that offer access to thousands of journals and electronic books that can be incorporated directly into electronic coursepacks. Universities already pay millions of dollars for these licenses with the money flowing to database companies, publishers, and authors.

Moreover, open access licensing, where research publications are freely available online, constitutes a growing percentage of published research, with thousands of open access journals and hundreds of thousands of articles posted directly by the researchers themselves. Add public domain works, fair dealing, hundreds of millions spent on textbooks, and pay-per-use licenses for the remaining works and the decision to forego an Access Copyright licence becomes easy to understand.

Even more curious is the timing of the AUCC agreement. Bill C-11, the government’s copyright bill, features several provisions designed to assist education. These include an expansion of fair dealing for education and a new exception for publicly available materials on the Internet. The bill is expected to become law by the summer.

If that wasn’t enough, the model licence purports to grants rights for copying that does not require permission. For example, it defines copying as including “posting a link or hyperlink to a digital copy”, yet linking to content can hardly be described as copying materials. Moreover, the licence comes packed with onerous restrictions such as blocking the ability to store articles in online services such as Mendeley or Dropbox.

And the millions of dollars collected by Access Copyright? Last year, the collective spent 30 percent of its licensing revenues on administrative expenses, including over two million dollars for Copyright Board applications and professional fees involving lobbying against copyright reform that might benefit educational institutions.

Given these circumstances, the AUCC decision to sign the model licence represents a stunning abdication of leadership that will cost students millions of dollars and slow innovation in Canada’s higher education community. So why sign an agreement when there are other options? Expensive additional insurance policies are easy to sign when someone else is paying the bill.