MEMORANDUM

Statement of

Marvin L. Berenson

on behalf of Broadcast Music, Inc.

before the

Subcommittee on

Courts, the Internet and Intellectual Property

Committee on the Judiciary

U. S. House of Representatives

Hearing on

“The Digital Millennium Copyright Act

Section 104 Report”

December 13, 2001

Mr. Chairman, Mr. Ranking Minority Member, Members of the Subcommittee, thank you for the opportunity to testify on a very important subject, the Copyright Office’s DMCA Section 104 Report, mandated by the Digital Millennium Copyright Act of 1998 (the “Report”). My name is Marvin L. Berenson. I am Senior Vice President and General Counsel of Broadcast Music, Inc. (“BMI”). BMI licenses the public performing right in approximately four and one-half million musical works on behalf of its 300,000 affiliated songwriters, composers and music publishers, including thousands of foreign works through BMI’s affiliation agreements with over sixty foreign performing right organizations. BMI’s repertoire is licensed for use in connection with performances by over one thousand Internet web sites, as well as by broadcast and cable television, radio, concerts, restaurants, stores, background music services, sporting events, trade shows, corporations, colleges and universities, and a large variety of other uses. BMI issued the first commercial Internet copyright license for music performed on web sites in April 1995 and has continued to provide innovative licensing solutions for the evolving online music marketplace.

Some of BMI’s individual songwriter and composer affiliates are well-known to the public and through their music participated in the recent tributes to the victims and fallen heroes of the tragedies at the World Trade Center and the Pentagon. Their songs of patriotism and grief and their artistry have been a major vehicle for fund-raising for the victims and their families. However, most BMI affiliates are ordinary citizens who receive a modest income for the creative efforts of writing music that is publicly performed by others. There can be no question that the majority of songwriters are not wealthy. They struggle to make a living, day to day, just as the average citizen does. Now is especially not the time to send a negative message to them.

At the outset, on behalf of BMI and its affiliates, I would like to commend this Subcommittee not only for its leadership on intellectual property issues but for the body of copyright law that it has produced over the past three decades.[1] The copyright law serves as an economic incentive to stimulate the creativity of authors who make their livings from the fruits of their creativity. The incentive works. If the incentive is reduced, there will be less creativity. The law is not perfect; perfection is impossible in a time of globalization and given the blinding speed of technological change. However, the current copyright statute, as a law that fuels the American free-market economy in a global environment, is well-suited to the on-line world.

BMI’s general message is twofold. First, Congress should continue to promote and protect authorship. To quote from BMI’s President Frances W. Preston, “it all starts with a song.” Without the songwriter to create the song, there is no music. Second, in the Internet space, it is abundantly clear that a sole songwriter, composer, or music publisher cannot easily monitor the astronomical number of public performances of a musical work that may occur. Collective licensing for the performing right organizations is even more necessary and cost efficient in this market than it has historically been in other markets. The performing right organizations – BMI, ASCAP and SESAC – are recognized in the Copyright Act and, although not the subject of today’s hearing, should continue to play a pivotal role in administering authors’ rights in the electronic environment. In the final analysis, Congress should not only protect creativity and promote competition, it should also allow the marketplace to develop with such time-tested tools as collective licensing.

In my testimony today, I propose to cover three topics: first, a general appraisal of the Report; second, specific views on the Report’s recommendations for section 109 and section 117 of the Copyright Act, including the Report’s statements about the public performing right; and third, a marketplace solution to the Report’s recommendations about perceived problems with music licensing.

I. A General Appraisal of the Report.

Section 104(a) of the Digital Millennium Copyright Act (“DMCA”) required the Register of Copyrights and the Assistant Secretary for Communications and Technology, U.S. Department of Commerce, to “jointly” evaluate “(1) the effects of the amendments made by [Title I of the DMCA] and the development of electronic commerce and associated technology on the operation of sections 109 and 117 of title 17, United States Code, and (2) the relationship between existing and emergent technology and the operation of sections 109 and 117.…”[2] Further, section 104(b) required the two agencies to submit to Congress a “joint report” on their evaluation, including any legislative recommendations they might have.[3]

Although the Register and the Department of Commerce, through the National Telecommunications and Information Administration (“NTIA”), did jointly evaluate information obtained pursuant to a public comment and hearing period, they did not submit to Congress a “joint report” as required by section 104(b). The NTIA issued its report in March 2001, and made no legislative recommendations.[4] The Register issued the Copyright Office DMCA Section 104 Report in August 2001. While agreeing with the NTIA that no changes are needed to section 109 of the Act, the Report advised several legislative changes concerning section 117.

The Copyright Office’s report was correct on the main point at issue when it agreed with the NTIA that no change is necessary to the First Sale Doctrine in Section 109 of the Act at this time. To this extent, the NTIA and the Office share a common viewpoint that it is appropriate to take a conservative approach to changing the copyright law in the face of new technologies. The Office diverged with this cautious approach to dealing with technological change, however, in its comments specifically directed to the music industry that will injure the rights of the music community. First, the Office proposed an unwarranted exemption to the reproduction right for the making of certain temporary buffer copies of musical works incidental to streaming. Second, and for reasons that are not within the Office’s mandate under Section 104 of the DMCA, the Report makes groundless statements about the scope of the public performing right in digital downloads of musical works. BMI opposes the Report’s recommended legislation as unwarranted expansions of section 117 and also opposes the Report’s “off the cuff” observations about the scope of the public performing right in downloads. Both proposals are well beyond the scope of the Congressional DMCA Section 104 mandate and without evidentiary support in the record.

II. Specific Views on Sections 109 and Section 117 of the Act.

a. No changes are necessary to section 109 of the Act.

BMI agrees with both the Register and the NTIA in their respective conclusions concerning the First Sale Doctrine that no legislative changes to section 109 of the Act are necessary at this time. Section 109 of the Act permits the owner of a copy of a copyrighted work like a compact disk (“CD”) to redistribute that property without violating the exclusive right set forth in Section 106(3) of the Act. Digital transmissions on the Internet for downloading music are different from distributions of physical media because they implicate several copyright rights – including the public performing right, the public display right and the reproduction right in addition to the distribution right. Applying the first sale doctrine to digital transmissions would adversely affect the copyright owners’ ability to license mechanical rights and public performing rights in their musical works as the online music marketplace continues to develop.

In the past five years, there has been a continued explosion in transmissions of music on the Internet. The Internet is literally awash with transmissions of unauthorized, unlicensed music in the form of digital MP3 files. In view of this, it is hard to make a factual case that section 109 is inhibiting digital transmissions. In these circumstances, we support the conclusions of both the NTIA and the Copyright Office that no change to section 109 of the Act is warranted at this time.

b. The Proposals Regarding Section 117 Exemptions Are Unwarranted.

1. Buffer Copies in Streaming

The Report recommends that Congress enact legislation to amend the Copyright Act “to preclude any liability arising from the assertion of a copyright owner’s reproduction right with respect to temporary buffer copies that are incidental to a licensed digital transmission of a public performance of a sound recording and any underlying musical work.”[5] The Report recites the fair use factors from section 107 of the Act and purports to engage in a balancing of the equities in favor of the users. But there is no indication that the marketplace or the current provisions of the Act are not satisfactory to handle the issue of buffer copies.

Section 115 of the Act provides for the conducting of CARP proceedings to set rates for digital phonorecord deliveries and incidental digital phonorecord deliveries. The first such case has been noticed, and there is no need to amend the Act prior to learning the outcome of that proceeding. Indeed, recent reports of a negotiated license between the Harry Fox Agency and the record industry confirm that this issue is capable of being resolved by the marketplace.[6]

2. Downloads of Musical Works

Having proposed an exemption for music publishers’ reproduction rights in streaming, the Register then felt compelled to go beyond reproduction right issues under section 117 and venture into what the Report characterized as an unsettled point of law that is subject to debate, the applicability of the public performing right to digital downloads of music when no contemporaneous rendering takes place. The Report concluded that assuming digital downloads of musical works are public performances, they should be considered fair use.[7] BMI disagrees with the Report’s approach to musical works on a number of levels.[8]

First, the Report’s conclusory statements regarding the value of the public performing right are outside the scope of the Register’s Congressional mandate under section 104 of the DMCA. To shoehorn section 106(4) of the Copyright Act into an analysis of section 117 (a “copying” exemption) is (to say the least) a stretch.[9] A review of the request for public comment issued by the Copyright Office and the NTIA on June 5, 2000, confirms that all specific questions related to sections 109 and 117 of the Copyright Act.[10] No mention was made of public performances in digital downloads, and no user group filed written comments about the licensing of public performing rights. At least with respect to the public performing right the Register did not act on a full record in making the comments in her report.[11]

When Congress passed the Digital Performance Right in Sound Recordings Act of 1995 (“DPRA”), Congress clarified the applicability of the mechanical compulsory license to digital phonorecord deliveries. In so providing, it preserved the applicability of the public performing right to digital transmissions.[12] In reviewing the DPRA, Nimmer observes that “the prudent course would seem for purveyors of the new digital services to pay royalties under both theories [i.e., performance and mechanical].”[13]

The Report’s conclusion that the public performance that takes place in the course of a download is fair use is simplistic and ignores the substance of the fair use doctrine as it is codified in section 107 of the Act. Section 107 sets forth four non-exclusive factors to be considered by courts in determining whether or not a particular use is fair: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. As this Committee stated in its Report on the 1976 Copyright Revision Act, “…courts must be free to adapt the doctrine to particular situations on a case-by-case basis.”[14]

The Copyright Office has in a prior rulemaking proceeding wisely decided that it would not interpret definitions in the Act in cases involving complex, fact-specific inquiries similar to “fair use” claims. See Petition for Rulemaking Denial, Public Performance of Sound Recordings; Definition of Service, 65 Fed. Reg. 77330, 77332 (Nov. 21, 2000). In that proceeding the Office denied a request by webcasters to issue a general rule interpreting the statutory definition of “interactive service”. The Office’s denial was based on the rapidly changing nature of the marketplace for digital music services. That same prudent rationale adopted for treatment of sound recording copyrights was not followed by the Office, however, in making its sweeping comments about exemptions for licensing musical works rights online.

The federal courts have much better fact-finding abilities when it comes to analyzing fair use claims. In a recent decision resolving litigation between music publishers and the Universal Music Group over mechanical licensing of streaming services, the district court rejected the defendant record label’s contention that the issue of infringement of mechanical rights should be deferred until the Copyright Office issued its rulemaking. The court stated: “The Second Circuit has recognized that ‘the Copyright Office has no authority to give opinions or define legal terms, and [that] its interpretation on an issue never before decided should not be given controlling weight.’”[15] The Court found liability for infringement of mechanical rights even though the service in question was licensed for public performing rights by BMI and ASCAP.

While the Report discussed the four fair use factors as they applied to the reproduction right and the making of “buffer” copies by webcasters (BMI does not believe their conclusions were correct, however), there was no similar analysis for the public performing right. The Report merely incorporated by reference the fair use analysis for the reproduction right.[16] In a giant leap of faith, the Report concluded that “fairness requires that we acknowledge the symmetrical difficulty that is faced by the online music industry: digital performances that are incidental to music downloads.”[17]

In order to test the Report’s logic, let us consider five types of digital performances that occur in digital downloads:

· Downloads of a single song for a per-song fee;

· Downloads of an unlimited number of songs for a monthly subscription;

· Limited (e.g., three songs only, or listen for two days only) downloads of songs for promotional purposes, free-of-charge;

· Technical downloads of audio programming for purposes of digital radio broadcasting;

· Technical downloads of audiovisual programs for purposes of broadcasting digital television.

Would the fair use analysis be the same for each scenario? Obviously not. In fact, it is easy to see that there will be a wide variety of delivery methods of music online that involve downloads, each of which has the potential to impact the market for public performing rights.

To give one example, MusicNet announced the launch of its subscription music delivery service to compete with unlicensed peer-to-peer services such as Aimster. One possible model under discussion, according to Billboard Bulletin, would offer consumers 50 musical tracks in the form of downloads, on-demand streams, or a mixture, for $9.95 per month.[18] Under the Copyright Office’s flawed reasoning, BMI would be able to license the streams for value, but not the downloads. Clearly the marketplace makes no arbitrary distinctions in the types of transmissions as the Office claims users need or require.

BMI understands that PressPlay and MusicNet will offer limited download services that will compete with radio and cable broadcasting. At a recent keynote address before the NAB convention, a respected commentator Walt Mossberg (The Wall Street Journal computer columnist) warned the radio industry that these new services will compete with them for audience.[19] Obviously, any negative impact on radio listenership and revenues will also hurt the public performing right licensing marketplace.

As if to excuse the lack of analysis of the public performing right issue, the Report buttressed its conclusion by explaining that “this issue only applies to the music industry … because in other industries the public performance and reproduction rights are exercised by the same entity.” But why should the music publishing industry be disadvantaged because of its historic structure? Other industries can license the value of all rights by combining control over all rights in one entity. In foreign countries, the music licensing societies frequently license the public performing right and mechanical right in digital transmissions, and assign a value to each component of the license.

Many user groups have paid both performing right fees and reproduction rights fees for the entertainment services they provide. Background music services are one example. They obtain public performing right licenses from performing right organizations as well as electrical transcription licenses from music publishers. Television broadcasting also involves both rights: synchronization rights for recording the music and the public performing right for broadcasting.

The Copyright Act of 1976 created the concept of divisibility of rights, and there is no reason to revisit that decision. Divisibility of rights is one of the incentives to authorship. Indeed, divisibility of copyright rights promotes competition. In our view, by commenting on the structure of the musical works marketplace the Copyright Office is essentially opining on policy matters that are outside the purview of its expertise. But the Office’s suggestions regarding musical works licensing actually would have more profound affects on the very nature of the Copyright Act, itself. Through the leadership of this Subcommittee, Congress created the 1976 Act as a technologically neutral statute that has proven flexible enough to respond to the incredible pace of change brought about by computers in the past 25 years. The Office seeks to upend the Act to respond to certain technologies, in a manner that is no longer technology neutral. This could have unsettling consequences for future developments in the law.

Despite the fact that BMI disagrees with the procedures and substance of the Register’s Report that relate both to “buffer” copies and public performances in digital downloads, we respect the influence of the Register of Copyrights. We have considered her conclusions and recommendations, and rather than simply opposing the Register, we have examined whether common ground can be achieved. We have identified one area in which commonality of interests is present. The attached joint statement of BMI, ASCAP and HFA discusses the current evolving state of music online and makes suggestions designed to accommodate the reasonable needs of webcasters and music users. We believe this presents a model for marketplace solutions to licensing problems. Legislative “fixes” to what are essentially business problems are not called for and, in our view, would be more damaging than useful at this time.

CONCLUSION

In summary, section 117 is a limited exception aimed at copying computer software and has nothing to do with the webcasting or downloading of musical works. There is insufficient support in the Report or in the record before the Office for the Report’s proposed exemptions and purported “fair use” analyses concerning music. The Register’s recommendation regarding the public performing right is not in the public interest, and we believe that no legislation is required.[20]

The Berne Convention and the WIPO Copyright Treaty require that the marketplace for new uses of copyrighted works have the opportunity to develop in a manner that does not unreasonably prejudice the legitimate interests of authors. These treaties prohibit limitations on (and exceptions to) copyright that interfere with authors’ rights and copyright owners’ legitimate business opportunities, whether they are established licensing practices or prospective in nature.[21]

There is no indication in Section 104 of the DMCA that Congress intended that this inquiry should involve music public performing right issues on the Internet. In view of the explosive growth of webcasting since 1998, it is difficult to see how a diminution of the public performing right is necessary to foster webcasting over the next several years.

It is clear that we have entered into the era of globalization. Realizing this fact, BMI has entered into agreements with other performing right organizations for the global licensing of performing rights on the Internet. Obviously, transmissions over the Internet are global in nature. Therefore, whatever this Subcommittee recommends and the Congress enacts will have an effect on the rest of the world. The U.S. should not become a lawless haven for entities that want to avoid liability from copyright liability.

We should strengthen our laws to promote lawful activities rather than diluting our laws to promote free-riding. We should set and adhere to high standards for the rest of the world to follow, rather than following the lowest common denominator approach. BMI looks forward to assisting this Subcommittee in exercising its oversight and legislative responsibilities to monitor developments in the area of emerging technologies and their impact on various aspects of U.S. copyright law.

October 2001

JOINT STATEMENT OF THE AMERICAN SOCIETY OF COMPOSERS,
AUTHORS & PUBLISHERS, BROADCAST MUSIC, INC., AND THE
NATIONAL MUSIC PUBLISHERS’ ASSOCIATION/HARRY FOX AGENCY
ON INTERNET USES OF MUSIC

ASCAP, BMI and the NMPA (through its licensing subsidiary, HFA) represent virtually all American songwriters and music publishers, in licensing all the rights that are necessary for Internet music services to use copyrighted musical works.[22] At the outset, we unequivocally state our desire to license copyrighted musical works for transmission on the Internet so that consumers may have on-line access to the world’s repertory of musical works.

HFA has licensed many Internet music services and, together with the NMPA, recently reached landmark agreements with the RIAA and Napster to license the reproduction and distribution rights in copyrighted musical works for a broad array of Internet music subscription services. BMI and ASCAP have licensed and will continue to license any Internet users who request a license for the public performance of musical compositions.

These licensing agreements confirm that the marketplace, while continuing to evolve, will adapt to meet new business models as they emerge. We thus agree, in the strongest terms, with the recent statements made by members of the House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property:

· “If there is one thing we know about the Internet music marketplace, it is how little we know . . . . It is a marketplace without a proven business model . . . .”

· “[T]he most appropriate Congressional role at this point is to continue to develop our knowledge and monitor marketplace developments.”

· “We strongly believe it is premature for Congress to act on legislation that regulates this quickly evolving marketplace.”

· “Government regulation can only stifle the tremendous innovation in this market and serve to pick winners and losers, and, in any case, will most likely be obsolete before it is enacted.”[23]

It has nevertheless been suggested by others that Congress should intervene now to change the legal framework in which the marketplace is evolving. The Copyright Office, for example, recently issued a report suggesting that Congress amend existing law to limit the rights of songwriters and music publishers to be compensated for the use of their copyrighted musical works on the Internet.[24] A bill has also been introduced that seeks to regulate the still-evolving marketplace for Internet music. We believe strongly that legislative intervention is unwarranted and could impede marketplace solutions.

In particular, we wish to respond to the suggestion by the proponents of these changes that certain economic rights expressly granted under the Copyright Act have no value in the digital domain. We appreciate that different uses of different rights may be valued differently in the marketplace. At opposite ends of the spectrum, for example, it can be said that “pure” audio-only downloads should not require payment for the public performing right and that “pure” audio-only webcasts should not require payment for the mechanical right.[25] In between those examples, however, both rights may be implicated. How to value those various uses should be left to the marketplace – as it was, with a successful resolution, in the NMPA/HFA-RIAA agreement and in the many ASCAP and BMI license agreements.

The recent NMPA/HFA-RIAA agreement proves that marketplace solutions work. The agreement provides a flexible model for immediately licensing reproduction and distribution rights to all subscription services delivering music in a variety of forms, including on-demand streaming and time-limited downloads. Although the agreement does not establish industry-wide rates at this time, it contemplates that different uses of music may have different values in the marketplace. Indeed, NMPA/HFA and RIAA have committed to engage in good faith negotiations to agree on industry-wide mechanical royalty rates for Internet services – and to issue licenses even before such rates are set so as to assure that consumers have access to music now.

So, too, ASCAP and BMI, in licensing the public performing right, have repeatedly expressed their desire for, and willingness to engage in, marketplace negotiations for licenses that also reflect the different values of different uses of music on the Internet. Indeed, BMI and ASCAP have already licensed thousands and thousands of Internet music users, covering all their performances.

These developments prove that the free marketplace works. It should be allowed to continue to work, without legislative intervention.

[1] I am authorized to report that BMI has received no federal grants or engaged in any federal contract or subcontract the disclosure of which would be required by House Rules.

[2] Section 109 of the Copyright Act contains an exemption from the distribution right in Section 106(3) of the Act permitting owners of copies or phonorecords lawfully made to sell or otherwise dispose of that copy or phonorecord, subject to certain limitations. This is commonly known as the First Sale Doctrine. Section 117 of the Act contains a small number of narrowly tailored exemptions to copyright rights allowing users of computer software to make copies in certain circumstances involving machine functionality and/or repair.

[3] Public Law No. 105-304, § 104(a), 112 Stat. 2860, 2876 (1998).

[4] The NTIA’s report is firmly grounded in recognition of electronic commerce, existing and emergent technology change, and their impact on sections 109 and 117 of the Copyright Act (the “Act”). Based on this recognition, NTIA prudently concluded that “it is premature … to draw any conclusions or make any legislative recommendations at this time ….” NTIA Report at 1.

[5] See Report at pp. 142-143.

[6] “Label Deal to unclog music logjam,” issued September 17, 2001, by CNET News.com, at http://news.cnet.com/news.

[7] Report at pp. xxix-xxx; see also pp. 147-148 (“(I)t is our view that no liability should result from a technical “performance” that takes place in the course of a download”).

[8] Musical works are written by composers and lyricists and are usually owned or administered by music publishers. The copyrights in musical works are to be distinguished from those in sound recordings, which are the particular renditions of the musical works performed by the artists and which are usually controlled by record companies.

[9] The Register’s rationale, that a bill had been introduced in 1997 by Representatives Boucher and Campbell (H.R. 3048, 105^th Cong., 1^st Sess. (1997)) who proposed to amend section 117 by permitting reproductions of digital works necessary to the operation of a device and not affecting the normal exploitation of the work, squares neither with the plain meaning of section 104 nor an actual reading of H.R. 3048. In pertinent part, H.R. 3048 proposed to amend section 117 to provide that “it not be an infringement to make a copy of a work in a digital format if such copying (1) is incidental to the operation of a device in the course of the use of a work otherwise lawful under this title; and (2) does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.” (emphasis added). H.R. 3048’s language, although somewhat murky on protecting the author, at least pays deference to the author.

[10] See 65 Fed. Reg. 35673-75 (May 16, 2000).

[11] The notice of public hearings adhered to this circumscribed approach. At the public hearing held by the Office and the NTIA on November 29, 2000, I testified about the applicability of the public performing right to digital transmissions under the Act to illustrate the inapplicability of the first sale doctrine to digital transmissions. At the hearing I testified about the legal rationale for performing right organizations to license a public performance of the underlying musical work that occurs in the course of transmitting sound recordings from the vendor’s server to the consumer’s personal computer. In response to a question from the panel about such licensing, I replied that the marketplace would handle this as a licensing matter. For all practical purposes, that is the extent of the record before the Office on this subject on which the Report purports to base a “fair use” analysis of the applicability of the public performing right to music downloads. See Hearing Transcript at 199-201.

[12] See 17 U.S.C. § 115(d) (definition of digital phonorecord delivery); see also 17 U.S.C. § 115 (c)(3)(K) (“Nothing in this section annuls or limits (i) the exclusive right to publicly perform a sound recording or the musical work embodied therein, including by means of digital transmission….”).

[13] 2 Nimmer § 8.24[B]. 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 webcast, or by a limited portion of the public, such as cable or satellite transmissions that are available only to subscribers. 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.” 17 U.S.C. § 101. 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, or streamed over the Internet by a webcaster. The transmission’s definition as a performance is not dependent on a particular number of people who choose to receive a transmission.

[14] H.R. Rep. No. 94-1476, 94^th Cong., 2d Sess. 66 (1976); see also H.R. Rep. No. 102-286, 102^nd Cong., 2d Sess. (1992).

[15] Rogers and Hammerstein Organization, et al. v. UMG Recordings, Inc. and the Farm Club Online, Inc., 00 Civ. 5444 (S.D.N.Y. September 25, 2001), slip. op. at 22 (citations omitted), 2001 U.S. Dist. LEXIS 16111.

[16] See Report at 147, fn. 441.

[17] Report at 147.

[18] Billboard Bulletin, September 27, 2001, MusicNet Unveils Platforms for Technology, Business.

[19] In covering the Mossberg address, the M Street Daily wrote “(W)hen the labels debut their own legal successor to Napster, they’ll charge a download fee and also code the song to vanish off a hard drive in 30 days. To Mossberg, renting a song equals streaming.” M Street Daily, September 6, 2001, at 1.

[20] Several key members of this Subcommittee have stated in a letter to Colleagues that in their view no legislation concerning the Internet music marketplace is necessary: “If there is one thing we know about the Internet music marketplace, it is how little we know….It is a marketplace without a proven business model….[T]he most appropriate Congressional role at this point is to continue to develop our knowledge and monitor marketplace developments.” The letter concludes that “We strongly believe it is premature for Congress to act on legislation that regulates this quickly evolving marketplace” and notes that any legislation attempted by Congress will “most likely be obsolete before it is enacted.” Letter to Colleagues from the Hon. Howard L. Berman, John Conyers, Jr., Elton Gallegly, Bob Goodlatte, Henry J. Hyde and Robert Wexler sent September 2001.

[21] See, e.g., Art. 10, WIPO Copyright Treaty.

[22] Musical works – songs or other musical compositions -- are written by composers and lyricists and usually owned or administered by music publishers. The copyrights in musical works are to be distinguished from those in sound recordings, which are the particular renditions of musical works recorded by performing artists and usually owned by record companies. We deal here only with musical works, not sound recordings.

[23] “Oppose Regulation of the Internet Music Market,” Letter from the Honorable Howard L. Berman, John Conyers, Jr., Elton Gallegly, Bob Goodlatte, Henry J. Hyde and Robert Wexler to Colleagues (September 2001).

[24] U.S. Copyright Office, DMCA Section 104 Report (August 2001).

[25] For example, a “pure” audio-only download could be one that met all these requirements: (1) the musical work could not be perceived (i.e., heard) while the transmission was taking place; (2) the sole purpose of the transmission was to deliver a phonorecord of the musical work to the home user; (3) the resulting phonorecord received by the home user was permanent, capable of further non-commercial duplication by the home user, and not limited by time, usage, further payment, or any other factor; and (4) the transmission of the musical work was made on demand. By contrast, a “pure” audio-only webcast could be one that met all these requirements: (1) no copy was made on a local storage device (e.g. the hard drive of a user’s computer or portable device) that would be accessible for subsequent listening; (2) the webcast was not part of an “interactive service” (as that term is defined in Section 114(j)(7) of the Copyright Act); and (3) the webcast does not exceed the “sound recording performance complement” (as that term is defined in Section 114(j)(13) of the Copyright Act).