HOUSE DMCA HEARINGS DEBATE COPYRIGHT ACT CHANGES
After 2 days of hearings on Copyright Office report on Digital Millennium Copyright Act (DMCA), chmn. of House panel said he still wasn’t persuaded that changes were needed to update copyright law to Internet Age. However, Rep. Coble (R-N.C.), who heads Judiciary Subcommittee on Internet & Intellectual Property, said he was “easy dog to hunt with,” so he was keeping open mind. First day of hearings last week focused on whether artists and music publishers should be able to collect royalties for RAM or buffer copies of musical works made to facilitate streamed programming. While 2nd session was mostly more of same, it included spirited debate between Webcasters and music publishers over whether buffer or server copies should be subject to mechanical license fees.
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Register of Copyrights Marybeth Peters recommended against adopting “digital first sale” provision, saying there was no convincing evidence of any problems with current law. However, report also urged Congress to exempt from reproduction royalties buffer copies incidental to licensed transmissions of public performances of sound recordings. Peters stressed that recommendation applied only to audio files whose sole purpose was to facilitate public performance via streaming. She said situation is analogous to deal cut with broadcasters in 1976 under which they were exempted from fees for server copies made simply to carry out licensed broadcast.
Some argue that on-demand streaming performances implicate reproduction right, Rep. Cannon (R-Utah) said. He asked Digital Media Assn. (DiMA) Exec. Dir. Jonathan Potter whether anything in law now prevented Broadcast Music Inc. (BMI) and other performance-right societies from raising their rates to ensure that artists were fully rewarded, even if they weren’t entitled to mechanical license (reproduction) fees. Potter replied that although on-demand performances had potential to reduce sales, thus cutting reproduction royalty payments, situation could be corrected by higher performance royalties. “In theory” that might be true, said BMI Senior Vp-Gen. Counsel Marvin Berenson, but in practice, minute BMI tried to raise its rates it would end up in rate court. There’s no reason why songwriters and music publishers should be penalized online by being allowed to collect only one fee, he said.
When both reproduction and performance rights are involved, they should be licensed, Peters said. But Copyright Office’s position is that when streaming takes place, and performance occurs only in ephemeral copy made to facilitate that stream, no performance royalty should accrue. Berenson said problem was that business models for online music changed “by the hour.” Although some copies are made purely for streaming process, others may be capable of being downloaded and played several times before they disappear from PC. At each end of continuum no one is asking for fees, he said. But for situations in between, artists are entitled to reproduction and performance rights, he said.
Webcasters want to compete with broadcasters but “in the real world, isn’t everything going to go [the Webcasters'] way?” ranking Democrat Berman (Cal.) asked Potter. Can’t Webcasters be more optimistic and stop griping about small provision on server copies? Potter replied that “single greatest threat” to Webcasting industry was inability to clear licenses to pay creators and publishers.
Coble said later his philosophy toward amending Copyright Act was: “If it ain’t broke, don’t fix it.” Although he said he wasn’t sure he was ready to back Copyright Office’s other legislative recommendations, he indicated some support for its request for amendment to Sec. 117 (archival copies). That section involves “day-to-day practicalities,” Coble said. He said even with that, he was not yet convinced congressional action was necessary.
Royalty-administering organizations are “terribly concerned” that downloading or streaming will cut into their piece of action, Potter said at news briefing after hearings. He said DiMA had made clear that online music and media services were “absolutely committed” to paying royalties, but BMI, Harry Fox Agency and others were feuding over who got to administer which rights and who got money. He said Coble and other subcommittee members were facing “enormous pressure” from those who would prefer to see marketplace solution to issues, but market wasn’t working, as even RIAA had admitted. Because Copyright Office is well respected on Capitol Hill, it’s likely that some sort of legislative activity will occur in early Feb., Potter said.