Judiciary
HomepageThank you for this opportunity to testify before the Subcommittee on a very important piece of legislation, H.R. 2441, the "NII Copyright Protection Act of 1995."
My name is Frances Preston and I appear before you today as President and Chief Executive Officer of Broadcast Music, Inc. (BMI). BMI, one of this country's three performing rights organizations, represents the public performing rights of over 180,000 songwriters, composers, and music publishers in all 50 states and throughout the world. BMI also represents thousands of foreign composers and songwriters whose works are performed in the United States. There are over 3 million musical works in the BMI repertoire. As this Subcommittee knows, BMI has testified on numerous occasions about amendments to the copyright law to meet technological advances in the distribution and performance of music.
I am not an attorney, nor am I a technocrat. My expertise is the music business, which has been my life for over three decades. For the past two years, I -- along with Jack Valenti who sits next to me today -- and thirty- five other distinguished Americans have served as members of the National Information Infrastructure Advisory Council (NIIAC). I do not appear today as a representative of the NIIAC. But I feel that the Council members wrestled with and achieved consensus on a number of issues, most particularly the importance of the availability and the protection of intellectual property in the National Information Infrastructure (NII).
It is my intention to cover four subjects. First, content must be protected on the Information Superhighway; without content, the Superhighway will have far less passengers. Second, the public performing right must be defended, and any attempts to weaken it should be opposed. Third, some specific concerns, with drafting suggestions, will be expressed about section 2 of H.R. 2441. Finally, several observations will be made about other provisions in H.R. 2441 or raised by its provisions.
I.
First, BMI applauds the underlying motivation behind
H.R. 2441 -- that intellectual property must be protected in
the electronic universe. Mr. Chairman, when you introduced
H.R. 2441, you emphasized this underlying motivation in your
floor statement. You observed that the success of the NII
could be jeopardized without the protection of content.
Three weeks ago, the Wall Street Journal ran an interesting
article entitled "Internet's Popularity Threatens to Swamp
The On-Line Services," reporting that on-line services (such
as America On-Line, Compuserve and others) are entering the
content creation business in order to generate revenues for
themselves. Last week, we read in the Washington Post that
"MCI and Microsoft Plan On-Line Internet Effort." Bill
Gates reflected on the rush of major companies to turn the
Internet into a profitable venue for themselves and stated:
"You're going to see a lot of partnerships." Microsoft has
already teamed up with NBC to make content available through
its on-line service, the Microsoft Network. With passage of
communications act reform, just think what Americans are
going to see in terms of partnerships and resultant
competition. Many partnerships, I predict, will inevitably
be rooted in the economic value of content, be it
information or entertainment.
The Report of the Working Group on Intellectual Property Rights (chaired by the Honorable Bruce A. Lehman) on "Intellectual Property and the National Information Infrastructure" (White Paper) wisely predicted the convergence of technology and content, with the latter driving technological changes:
"All the computers, telephones, fax machines, scanners, cameras, keyboards, televisions, monitors, printers, switches, routers, wires, cables, networks and satellites in the world will not create a successful NII, if there is not content. What will drive the NII is the content moving through it."
(at page 11). This Subcommittee scarcely needs reminding that the full potential of the NII cannot be achieved without the protection of content. The rights conferred under this country's intellectual property laws, established by Congress, are a means by which important public policy goals are achieved. The protection of creators' exclusive property rights in their respective works presently remains and shall always remain the bedrock public policy. It is the best way for policy makers to spur artistic and intellectual creativity in a free market economy.
During more than two centuries of American independence, with periodic amendment, the Copyright Act has provided protection for an ever-increasing variety of works of authorship. The genius of our intellectual property laws, particularly in an era of reduced federal expenditures, is that they are self-enforcing, cost-free to the taxpayer, and without the need for large government bureaucracies. Stated simply, the protection of intellectual property by the Copyright Act has been responsible for a success story in the United States. Your goal in legislating for the Information Superhighway should be to build upon that success. You are on the right track.
II.
Today, my primary focus will be on section 2 of H.R.
2441, which provides amendments to current copyright law to
clarify that an electronic transmission may be a
distribution under copyright law. BMIžs position is very
clear. We are not against clarification of a distribution
by transmission right, as long as the current performing
right continues to exist and songwriters are not harmed. If
Congress enacts the proposed legislation, the bill must be
explicitly clear that these rights co-exist in the world of
digital communication technologies.
H.R. 2441 provides for peaceful co-existence of rights. Section 2 does not create a new right; it merely clarifies that copies of phonorecords of works can be "distributed" to the public by transmission, and that such transmissions fall within the exclusive distribution right of the copyright owner.
To understand fully how section 2 may have an impact on the income of songwriters and music publishers, some background is in order about BMI and how songwriters and music publishers earn their livings. BMI's fundamental role is to license one of the six exclusive copyright rights, the right to perform publicly musical works, for uses on radio, television, at concerts, and so forth -- wherever music is heard or communicated to the public. In proposing changes to this nationžs intellectual property system, I would ask that you not think in terms of the superstar songwriters such as Paul Simon, Dolly Parton, Gloria Estefan, or Aretha Franklin. The typical songwriter does not receive income from making records of his or her own songs, nor does he or she receive income from concert tours or television appearances, commercial endorsements, sales of souvenirs, and so forth. The typical songwriter receives a modest income from his or her creative efforts at writing music that is publicly performed by others. Any change in copyright law which would constrict or adversely affect the performing right would be disastrous to the livelihood of most songwriters.
Under present law, a work is publicly performed if it is transmitted in such a way that it can be seen or heard by the public, such as a broadcast, or by a limited portion of the public, such as cable or satellite transmissions which are available only to subscribers. Similarly, a work is publicly performed if it is transmitted electronically over- the-air by a network to a local broadcasting station or a cable system. The transmission does not lose its characterization as a performance depending on the number of people who choose to receive the transmission. Indeed, an electronic transmission of a musical work is a public performance even if no one hears the transmission. Through collective rights organizations -- BMI, ASCAP and SESAC -- songwriters receive royalties for these performances. These performance royalties allow songwriters to make a living by being compensated for their creative efforts.
III.
BMI does have concerns which relate to how best to
achieve the underlying goals of section 2 without causing
unintended consequences to the public performing right.
Under current law (17 U.S.C. 101), to "transmit" a performance "is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent." Section 2 of H.R. 2441 adds a new and independent sentence to section 101: "To 'transmit' a reproduction is to distribute it by any device or process whereby a copy or phonorecord of the work is fixed beyond the place from which it was sent." While these two sentences do not seem to be mutually exclusive and do not stand in competition with each other, it should be made explicitly clear in any legislation that such rights mutually co-exist and a single transmission may implicate both copyright rights. This is consistent with the "bundle of rights" philosophy embraced by the Copyright Revision Act of 1976 and endorsed by the White Paper.
If this understanding is not clear from the express language of section 2, the Subcommittee should consider a modest drafting change to clarify that any transmission of a reproduction can also be a transmission of a performance.
The Subcommittee is to be commended for the expertise with which it managed to clarify this fundamental concept in the Digital Performance Right in Sound Recordings Act of 1995 (1995 Act), Public Law 104-39, signed by the President on November 1, 1995. That Act, in its express text, clarifies that nothing "annuls or limits in any way ... the exclusive right to publicly perform a musical work, including by means of a digital audio transmission ...." It is BMI's opinion that the Subcommittee should consider insertion of similar language in the express language of H.R. 2441.
Our concerns about section 2 and its legislative history are substantially accommodated by the holding of these hearings and the creation by the Subcommittee of its own record and debate on the issues. We presume that the Subcommittee (and Committee) will prepare its own legislative history, and BMI would be pleased to work with you to clarify what is intended by the changes proposed in section 2 of H.R. 2441.
The Subcommittee may hear some creative arguments about distinctions that might be made between transmissions of copies of works and transmissions of performances or displays of works. Some would express the view that "downloading" musical works using computer, and other "compressed" digital file transfer, ought to be considered only a distribution and not a performance. They interpret the existing law as being limited to transmissions that are capable of being seen or heard while being electronically transmitted and argue that the sending of a digitized form of a work does not constitute a performance unless and until the digital information is reconverted into sounds or images that are audible or visible.
The problem with this view is that if it applied to digital transmissions, it could equally apply to the analog radio and television broadcasts which were so clearly meant to be covered by the public performance right. After all, standard radio broadcasts are not audible to the human ear until the radio waves received by the antenna are reconverted by the radio receiving set. Moreover, conventional analog radio equipment is fully capable of receiving radio signals and recording them on tape even if the loudspeakers attached to the radio receiver are not turned on and no one at home is listening. Home taping of conventional television and radio signals is, of course, a widespread practice. The fact that on-demand transmissions might be downloaded or otherwise reconverted into audible sound at a time after the transmission has occurred would seem to be made irrelevant by a provision in the Copyright Act that a transmitted performance remains "public" even if it is received "at different times" by each member of the public. Furthermore, the legislative history makes it clear that a transmission is complete once it is sent, so long as it is capable of audible reception by the public.
The recent enactment of the 1995 Act, which became effective just last week, supports our view that digital transmissions of musical works do not have to be seen or heard in real time in order to be considered public performances under the Copyright Act. In fact, at the current meeting of the Committee of Experts on the Berne Protocol being held at the WIPO (World Intellectual Property Organization) in Geneva, Switzerland, the delegate for CISAC (Confdration Internationale des Socits d'Auteurs et Compositeurs), delegates of various countries, as well as delegates of non-governmental organizations, have espoused the view that a specific technology should not and does not eliminate the public performing right. Compressed transmissions on the NII implicate the performance right every bit as much as real-time transmissions. The fact that performances may occur in diverse locations and at different times will not exempt them for the public performing right.
IV.
The NII Copyright Protection Act of 1995 is minimalist
in its approach to the many intellectual property issues
raised by the NII. It does not confront problems that may
be looming on the distant horizon. The fact that more
comprehensive amendments are not being proposed is a tribute
to the resiliency of the Copyright Act and to this
Subcommittee which, of course, is responsible for the good
health of the Act.
Allow several parting thoughts about some other issues either raised by provisions in H.R. 2441 or likely to be raised during Subcommittee hearings.
Liability. The question of liability in the NII environment is certainly important, not only for those who engage in distribution and carriage activities but for content providers as well. BMI submits that the issues are not yet ripe for congressional resolution. On-line service providers, regional telephone companies, long-distance carriers, and cable television operators have played or will play an integral role in the technological development and expansion of the NII. The growth of distribution activities has been phenomenal; that growth rate shows little sign of decreasing.
Growth does not mean that we should eliminate or reduce liability for copyright infringements in the digital universe. To the contrary, if the protection of exclusive rights is emasculated, the flow of content will be reduced, and the growth rate will decrease. As noted above, distribution interests of today are becoming the content providers of tomorrow. Their positions on liability may change overnight.
The intersection of technological change, intellectual property and liability issues is nothing new for this Subcommittee. You have experienced controversial issues in the past -- posed by broadcasting, cable television, satellite delivery services, semiconductor chips, and digital audio recording devices -- and your responses have not been to eliminate liability but to rechannel technological changes into the copyright system. Debate about what sort of statutory scheme you should create will have to await another day and another series of hearings, and perhaps private sector negotiations. For the moment, I can assure you that the solution does not lie in an absolution from liability.
Licensing. Voluntary collective licensing -- as manifested by BMI's over fifty years of experience -- has played and will continue to play an important role in the licensing of intellectual property. BMI's current licensing initiatives with new-technology users of musical works is evidence that collective licensing retains the tremendous efficiency advantages it has always enjoyed for frequent uses that are each of small economic value but are very significant in the aggregate. Voluntary collective licensing is superior to compulsory licensing in every regard. Voluntary licensing also keeps government out of a successful economic endeavor and allows free market forces to prevail. For those transmission entities who are extremely concerned about liability issues, BMI invites you to explore licensing opportunities.
Copyright Management Information. Copyright management information associated with a work -- such as the name of the author or copyright owner and the terms and conditions for use of the work -- will serve to promote licensing and reduce liability concerns. The integrity of this information will be important in the NII and H.R. 2441 is a positive step forward in promoting the development and use of reliable rights management information. In this regard, BMI supports the relevant provisions of section 4 of H.R. 2441.
Technological Protections. Technology protections for copyrighted works will flourish in the digital environment just as they are flourishing in the areas of system security, currency protection, credit and banking, and privacy. While BMI is not currently affected by the provisions of the bill that bar the circumvention of copyright protection systems, we believe that enactment of such provisions would be sound public policy.
International. Intellectual property in the information era has global ramifications and is becoming increasingly internationalized. Through "national treatment," international intellectual property treaties provide a foundation for a level playing field. With the clarification of section 2 that we are requesting, H.R. 2441 is compatible with our treaty responsibilities and represents a positive step forward for the creation and dissemination of works in the Global Information Infrastructure (GII). If enacted, the United States -- through its trade negotiators and intellectual property experts -- will have to work to have other countries accept similar treatment for copyrighted works transmitted across national borders.
Because copyright laws are territorial, and international treaties leave room for national legislative determinations, we may soon confront an era of confusion about what country's copyright law applies for transmissions from one country to another. This issue, like the liability issues, will have to await another day.
Fair use. As incorporated in the Copyright Act and as developed by the federal courts, the doctrine of fair use will no doubt apply in the digital environment. The NIIAC determined that the ability to make fair use of copyrighted works should not be diminished or weakened in the context of new technologies, and we concurred in that decision.
Libraries and the Visually Impaired. Section 3 of H.R. 2441 provides several exemptions for libraries and the visually impaired, and BMI has no objections to these provisions.
Education. Education of the public about the need to respect intellectual property rights and responsibilities will be critical to the successful development of the NII. Regretfully, copyright responsibility is rarely taught in primary and secondary schools, institutions of higher learning, or as part of the life-long learning process envisioned by the NII. This must change. BMI has committed itself to participating in the ongoing educational process.
BMI supports H.R. 2441 and stands ready to work for its expeditious enactment. We look forward to working with the Subcommittee to resolve the drafting concerns raised in this statement and any other issues that might arise.