The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“INTRODUCTION OF MUSIC ONLINE COMPETITION ACT” mentioning the U.S. Dept. of Commerce was published in the Extensions of Remarks section on pages E1543-E1544 on Aug. 3, 2001.
The publication is reproduced in full below:
INTRODUCTION OF MUSIC ONLINE COMPETITION ACT
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HON. RICK BOUCHER
of virginia
in the house of representatives
Thursday, August 2, 2001
Mr. BOUCHER. Mr. Speaker, I am pleased today to join with my colleague from Utah, Mr. Cannon, in the introduction of much-needed legislation to facilitate the rapid introduction of services which will meet the public demand for efficient delivery of music over the Internet in a manner which also assures that copyright owners receive compensation for the use of their works.
I am among those who believe that most people are willing to pay a reasonable fee to be able to obtain musical selections over the Internet, and I applaud the planned introduction by the major record labels of websites that will make their music inventories available for streaming and downloading.
There are a number of obstacles to the effective introduction of online music services in current copyright law. A recent hearing in the Judiciary Committee highlighted several of the problems in current copyright law which are impeding the deployment of innovative, legitimate Internet music services to an eager listening public. Some of these problems are practical, such as trying to locate and notify all of the publishers of a particular musical composition. Other obstacles are technical, such as needing to produce multiple copies of a song in different transmission speeds and different media formats. Current copyright law permits the placement on a server of only a single copy.
The measure we introduce today, The Music Online Competition Act, is carefully crafted to remove these obstacles and thereby promote a legitimate online music marketplace that will benefit the public, the creators of copyrighted works and the technology industry. In particular, our bill makes the following changes:
Updates the ``Ephemeral'' Recording Exemption: Our bill expands the law that allows broadcasters and webcasters to make a single in-house
(or ``ephemeral'') copy of a transmission program to enable multiple copies so as to accommodate the need for different bit rates (e.g., dial-up, broadband), different formats (e.g., RealPlayer or MediaPlayer), and caching throughout the network to ensure efficient and timely delivery of music to consumers. Our bill extends the ephemeral copyright exemption to encompass not only the transmission program but also the individual songs.
Expands the ``In-Store Sampling'' Exemption: Under current copyright law, ``brick and mortar'' music retailers pay no license fees to record CDs on a server so that customers may listen to music samples in the store. Our bill allows retailers to use a central server to serve multiple retail establishments and applies the exemption to online retail establishments (such as Amazon.com or CDNow) that offer music samples of 30 or 60 seconds to promote sales of the associated sound recordings.
Clarifies the Status of Incidental and Archival Copying: Our bill adapts existing law to two situations particular to Internet technology. First, the bill exempts from copyright liability buffer copies made in the course of browsing or webcasting, as these buffer copies are mere technical incidents of the operation of the Internet and have no independent economic value. Second, the bill allows consumers to make archival ``backup'' copies of music that they lawfully acquire over the Internet in order to protect their collections against hard drive crashes, accidental damage or viruses. The bill leaves unchanged existing law with respect to computer programs.
Facilitates Administration of the Section 115 Mechanical License: Witnesses at a recent hearing representing the major music labels, RealNetworks, and MP3.com uniformly urged the creation of an effective mechanism for administering the existing Section 115 statutory license for musical works, which is currently administered with paper submissions and notices to copyright owners. Under our bill, the administration of the statutory license would parallel the administration of other statutory licenses by permitting users to notify the Copyright Office of the use of the statutory license and to deposit royalty payments and accounting information with the Copyright Office, so as to ensure that funds and information are distributed to the owners of the copyright. Our bill specifically instructs the Copyright Office to develop an electronic filing system to receive such notices as a replacement for the current paper filing system.
Assures Nondiscriminatory Licensing to Affiliated and Non-Affiliated Music Distribution Entities: Recording companies are now entering into the online music distribution business by establishing joint ventures with other record companies (e.g., MusicNet and Pressplay) and by acquiring well-known, formerly independent Internet services (such as CDNow, EMusic and MP3.com). It is anticipated that the distribution services owned by record companies will cross license each other, so that each site will be authorized to distribute over the Internet approximately 80 percent of all recorded music. If the major record companies do not also license independent non-affiliated distribution services, music will be distributed exclusively by a vertically integrated duopoly. In such a circumstance, there would be no competition in music distribution.
In 1995, Congress had a similar concern with respect to cable and satellite subscription services, which Congress addressed by requiring vertically-integrated companies that both owned content and distribution services to offer nondiscriminatory license terms and conditions to all similarly-situated distribution services. Our bill extends this existing nondiscrimination provision to interactive performance services and digital distribution services.
Requires an Examination of Programming Restrictions: The sound recording statutory license for digital cable, satellite and webcasting services includes programming restrictions that, for example, restrict the provider from playing more than 3 selections from a particular CD or more than 4 selections from a particular artist within a 3-hour window. Broadcast radio is not subject to these programming restrictions. Certain digital music services contend that some of these programming restrictions impose undue burdens upon their service, reduce their ability to compete with broadcast radio, and unfairly preclude their ability to take advantage of the statutory license to deliver the type of services that consumers expect from a radio offering. Our bill instructs the Copyright Office and the Department of Commerce jointly to study and report to Congress on the effect of these limitations upon such services, upon copyright owners and upon the public interest, and to make appropriate legislative recommendations.
Requires Direct Payment to Artists: The sound recording statutory performance license provision specifies that royalty payments should be shared equally by performing artists and recording companies. Current law funnels these payments to artists through the recording companies. Our bill requires that these payments instead to be made directly to the artists or to a collective organization representing the artists.
There is uniform agreement among record labels, online companies and consumers that changes to the copyright law are needed. Congress has a responsibility to promote an online marketplace which will allow legitimate, innovative services to thrive. I call upon my colleagues to join with us as we seek to facilitate the rapid introduction of legitimate online music services for the benefit of our constituents, the listening public, of the creators of copyrighted material and of the technology and other entrepreneurial companies which seek to deliver music to consumers. Mr. Speaker, I urge all of my colleagues to join with Mr. Cannon and me in supporting this measure.
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