Congress to Industries: Play Nice on Music Licensing, or No Action

Rates vary by medium, even for like services. Broadcast radio is fee-free. Internet providers, satellite radio and digital radio bundled with cable TV pay each different rates -- a system Boucher called discriminatory. “We've held hearings on the needed changes [and] we understand the urgency that attends this debate,” he said: “Clarity is much needed.” Legislators could set rates, but experience has taught the Hill that if stakeholders aren’t part of the process, passage can be very difficult, he told Washington Internet Daily.

Boucher and allies seek consensus among the National Music Publishers’ Assn., American Society of Composers, Authors & Publishers and others -- and DiMA. He hopes the House Judiciary Committee will write a bill to be sent to the full House for consideration before the session ends in Nov. The House has leeway to move first and the Senate “will act quickly in the wake of what the House achieves,” he said.

Boucher has other licensing issues on his agenda. He wants to ensure online services can play the 30-sec. snatches of recorded works the law entitles brick and mortar music sellers to offer shoppers. He also aims to amend copyright law to state clearly that it’s fair use for PC users to create backup copies of purchased digital content. Consumers have a right to protect purchases from hard drive crashes, the Copyright Office has said. “It would be wise for Congress to codify that notion,” Boucher said.

Weighing in on the Sec. 115 compulsory license controversy (WID Sept 13 p2), Boucher said the structure seriously needs reform. The right solution would incorporate music delivered online while ensuring just compensation to songwriters. The 1909 statute, which worked well when only a few songs were licensed at a time, can’t handle Web-based distribution for millions of individual cases, Boucher said.

A series of hearings has left lawmakers with multiple options. Some would eliminate Sec. 115; others would expand it to address new and future technologies. Songwriters and music publishers want a uni-license, in contrast to blanket and collective licensing models pushed by other interests. Boucher refused to critique or endorse any options, saying revealing his preference would make it “a lightning rod which may divide parties from whom we're expecting consensus.”

Today’s situation keeps legitimate online services from competing fully and achieving broad acceptance, he said. Gaps in legal online providers’ inventories are a major burden, since illegal peer-to-peer services have virtually limitless inventories, Boucher said. If consumers had access to more variety of music via recording industry-approved channels, “the vast majority would attempt to do the right thing and use the lawful services,” he said.

Wash. Senator Seconds Call for Reform

Any copyright reform must be technology-neutral as to how the music industry delivers content, Sen. Cantwell (D- Wash.) said. “I don’t want government selecting technology winners and losers,” she said, stressing “the clear need to streamline and simplify the copyright royalty arbitration process” to ensure that it’s “fair and equitable to artists.” Copyright reform must be done in a way that avoids as stream of legal challenges, and Congress “needs to set the framework for the discussion,” Cantwell said, calling for a “light touch.”

Proper regulation will mean broad adoption of technology continues to influence business models and lowers barriers to entry for artists, Cantwell said. She said consumers’ choices will depend on varied factors, such as an increased rate of broadband build-out in the U.S., likely to be spurred by a bill Cantwell said will pass within weeks.

Other key elements include commercially viable networked systems for buying digital content, and assurances digital rights management technologies don’t discriminate against legally downloaded entertainment, she said. Industry needs consensus, or a de facto standard, on interoperability, so online services always innocuously incorporate DMR in their business strategies. -- Andrew Noyes

Future of Music Coalition Notebook

The most important impact of the Supreme Court Grokster decision could be on peer-to-peer (P2P) network ads and promotional literature, not on innovation, attorney Jonathan Band said Tues. at the Future of Music Coalition summit. Clever, catchy “wink and a nod” ads on unauthorized copying could be considered inducement, he said. He urged companies to “think more thoroughly” about their markets and ask: “Does this ad go too far?” Grokster also could create a cottage industry in opinion- letter writing, to create a paper trail documenting any non-infringing uses. Disclaimers on ads and websites will be more important than ever, Band said. “It might not help you, but not including it could hurt you,” he added. Training employees to be careful about what they say in e-mails and during planning sessions for new technologies will come into play post-Grokster. Such communications were called into question at the Supreme Court and can help build a case for inducement, Band warned.

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Efforts to stifle free expression keep growing, despite a 2004 Senate vote against a House bill to up indecency fines, Rep. Schawkowsky (D-Ill.) said on Tues. at the Future of Music Coalition policy summit. Citing Janet Jackson’s Super Bowl nipple flash as a goad to crusaders against indecency on the airwaves, Schawkowsky said she was her committee’s only member to vote against the bill to raise maximum indecency fines to $500,000 from $11,000 per incident. When the bill reached the full House, 22 other members joined her in opposing it before the Senate voted it down, she said. The bill has been revived as HR-310 and Rep. Waxman (R-Cal.), a longtime Hollywood ally, joined Schawkowsky in attacking the fine hike. Nearly 40 members of the House voted against the bill. Schawkowsky said it is scary that her Capitol Hill colleagues “would be so willing and so easily [would] give up these precious [First Amendment] rights.” The Congressional Arts Caucus co-chairman said she worries about the chilling effect of bigger fines on anyone on the air -- from rock bands to news anchors, who might become “obsessed with not being objectionable.” She warned that indecency advocates aren’t limiting their aim to music: “First they'll come after the artists, and then they'll come after the rest of us.”