STATEMENT -->

OF ALLAN R. ADLER

VICE PRESIDENT FOR LEGAL AND GOVERNMENTAL AFFAIRS

ASSOCIATION OF AMERICAN PUBLISHERS

BEFORE THE

SUBCOMMITTEE ON COURTS, THE INTERNET

AND INTELLECTUAL PROPERTY

HOUSE JUDICIARY COMMITTEE

CONCERNING S.487:

"THE TECHNOLOGY, EDUCATION AND COPYRIGHT

HARMONIZATION ACT OF 2001"

JUNE 27, 2001

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me to appear here today on behalf of the Association of American Publishers ("AAP") to discuss S.487, the proposed "Technology, Education And Copyright Harmonization Act of 2001" (or "TEACH Act"), as it was passed by the Senate on June 7 of this year.

As you may know, AAP is the principal national trade association of the U.S. book publishing industry, representing some 300 member companies and organizations that include most of the major commercial book publishers in the United States, as well as many small and non-profit publishers, university presses and scholarly societies.

AAP members publish books and journals in every field of human interest. AAP members include the nation's leading educational publishers, who produce textbooks and other instructional and assessment materials covering the entire range of elementary, secondary, postsecondary and professional educational needs. While continuing to serve market demands for such works in hard copy, paper-based formats, these publishers also operate Internet websites and produce computer programs, databases, multimedia products, and other electronic software for use online and in other digital formats. Many are also increasingly involved in the nascent "e-book" market, where the reader's use and enjoyment of all kinds of literary works may be greatly enhanced through the added functionality that books in digital formats can offer when read on computer screens or through hand-held personal digital appliances.

AAP Support for Web-Based Education, Opposition to Copyright Exemption

From the outset, AAP members have generally been strong supporters of using the Internet as a medium for conducting educational programs. Many publishers are producers of high-quality digital content for online educational use and some are themselves providers of digital distance education course programs. However, proposals to extend the existing "instructional broadcasting" exemption in the Copyright Act [17 U.S.C. Section 110(2)] to cover Web-based performance and display of copyrighted works for remote and asynchronous "distance education" purposes have raised potentially significant marketplace issues for publishers and other owners of such copyrighted works. An overbroad, unrestricted exemption could adversely affect, or even destroy, both the online and off-line markets for such works.

To fully appreciate the significance of AAP's support for the Senate-passed TEACH Act, it should be remembered that, for nearly three years prior to endorsing the negotiated compromise embodied in that legislation, AAP had vigorously opposed all earlier legislative proposals to extend the Copyright Act's "instructional broadcasting" exemption to cover Internet-based "distance education" activities.

In April 1998, when this Subcommittee was working on legislation which would eventually be enacted as the Digital Millennium Copyright Act ("DMCA"), AAP opposed an "online distance education" proposal in an alternative bill (H.R.3048) that was also pending before the Subcommittee. AAP opposed the alternative bill's proposal because its version of a revised Section 110(2) exemption would have (1) permitted the online use of entire copyrighted works in a manner that substituted for the usual purchase or acquisition of instructional materials by or for students, and (2) exposed copyrighted works to potentially market-killing risks of unauthorized reproduction and distribution on the Internet. In light of such concerns, AAP opposed amending Section 110(2) as part of the DMCA but supported the eventual DMCA mandate for the Register of Copyrights to conduct a study to produce "recommendations on how to promote distance education through digital technologies, including interactive digital networks, while maintaining an appropriate balance between the rights of copyright owners and the needs of users of copyrighted works."

In July 1999, when this Subcommittee held a hearing to review the Register's recently-issued "Report on Copyright and Digital Distance Education," AAP argued that the Register's proposed amendments to revise the Section 110(2) copyright exemption to embrace the Internet was unjustified, unfair and unworkable in light of the Report's explicit findings regarding the vibrant and burgeoning nature of the digital distance education marketplace; the mixture of competition and cooperation among non-profit and for-profit providers of Internet-based distance education programs; and the uncertainties regarding current availability of effective and affordable technological measures that the Register had deemed an indispensable requirement for maintaining the "balance" between the rights of copyright owners and the needs of users of copyrighted works in the digital network environment.

AAP reiterated its objections to the Register's proposed Copyright Act amendments before the Congressionally-mandated Web-Based Education Commission in July 2000, and again before the Senate Judiciary Committee when a hearing was held on the newly-introduced TEACH Act in March of this year.

The proposed TEACH Act (S.487), which was cosponsored by Senators Hatch and Leahy, represented the first time that the Register's recommendations for amending the Section 110(2) exemption had been introduced as proposed legislation. In its testimony on the proposed TEACH Act as introduced, AAP noted that its continuing opposition to such legislation was based not only on the findings in the Register's Report, but also on its fundamental concerns regarding market substitution for the typical purchase or acquisition of instructional materials and the inherent network risks of exposing copyrighted works to potentially devastating unauthorized online reproduction and distribution.

Tough Negotiations Produce A Solid Compromise

But, in opposing the TEACH Act as introduced, AAP nevertheless attempted to be constructive in its testimony before the Senate Judiciary Committee by identifying specific areas of revision which might make the proposed legislation more palatable to the publishing community and other copyright owners. With the witnesses from the education community similarly suggesting changes they wanted to see in a revised bill, Senators Hatch and Leahy initiated an intense but, ultimately, successful negotiation process in which representatives of the content, education and library communities - laboring under the guidance of the Register of Copyrights and her staff - fleshed out the skeletal provisions of the original legislation and produced a workable consensus compromise for amendments to the Copyright Act which will extend the current "instructional broadcasting" exemption to cover mediated instructional activities transmitted via the Internet and other digital networks.

The TEACH Act, as passed by the Senate, represents a classic "give some, get some" compromise among the affected communities whose representatives in the negotiation process agreed at its conclusion to support the compromise without change through the entire legislative process. Although each of the affected communities would undoubtedly prefer to see certain aspects of the bill treated differently from the manner agreed upon in the compromise embodied in the Senate-passed legislation, all agree that the compromise is better than the bill as originally introduced, and will achieve the goal of allowing teachers and students to benefit from the content-enriched instructional use of digital networks like the Internet, while providing appropriate safeguards to limit the additional risks to copyright owners that are inherent in exploiting copyrighted works in a digital format.

From AAP's perspective, the compromise embodied in the Senate-passed TEACH Act substantially addresses the publishers' main concerns regarding the revised exemption's potential substitution for sales and exposure of copyrighted works to unauthorized online reproduction and distribution. It achieves these results through revisions to the original bill that clarify the scope of the exemption (i.e., the materials and activities covered), the safeguards provided for copyright interests, and the conditions of eligibility for the beneficiaries of the exemption. These provisions are explained in a "section-by-section analysis" of the bill which appears in the Congressional Record of June 7, 2001 at p.S5992-5994.

Support House Passage of the TEACH Act Compromise Without Amendment

Although substantively sound, the negotiated compromise that is embodied in the Senate-passed TEACH Act is politically fragile. The trade-offs that produced agreement on different parts of the legislation and facilitated the overall compromise cannot be made subject to further changes without threatening to unravel the whole. While some in the affected communities might welcome the disintegration of the consensus compromise and the consequent resumption of dispute over proposed revision of the Section 110(2) amendment, AAP believes that the quest for the perfect should not become the enemy of the good. Too much good work has been done to let this precious opportunity for advancement slip by.

Time and again, when affected communities have been locked in seemingly insurmountable disagreement over important pending legislation, Congressional leaders have urged them to devise mutually-acceptable compromises among themselves or risk the likelihood that their intransigence will result in having less satisfactory compromises imposed on them by Congress. But with issues concerning the application of copyright in the digital environment, opportunities for Congress to achieve such "win-win" situations among contending communities through their own negotiations have proven to be quite rare.

AAP believes that the Subcommittee has such a rare opportunity before it with respect to the issue of amending the Section 110(2) exemption in the Copyright Act to apply to Web-based instructional activities. The representatives of the educational and library communities with whom the content community has worked to achieve the negotiated compromise in the Senate-passed TEACH Act deserve plaudits for their vigorous advocacy on behalf of their respective constituent interests and even more praise for their courageous pragmatism in accepting somewhat less than those interests have demanded in order to reach a reasonable agreement on behalf of all of the contending interests. AAP is proud to join with its partners in each of these affected communities to urge this Subcommittee and the full House Judiciary Committee to work with us to secure enactment of the compromise embodied in the Senate-passed TEACH Act without amendment. On this matter, we believe that is the best way for Congress to serve the public interest.