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 the Register of Copyrights's "Report on Copyright and Digital Distance Education,"⁽¹⁾ which was submitted to Congress last month pursuant to Section 403 of the Digital Millennium Copyright Act ("DMCA"), P.L. 105-304.

As the principal national trade association of the U.S. book publishing industry, AAP represents more than 250 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 hardcover and paperback books in every field, including general fiction and non-fiction, poetry, religion, children's books, and general and specialized reference works. In addition, AAP members publish scientific, medical, technical, professional and scholarly books and journals, as well as textbooks and other instructional and testing materials covering the entire range of elementary, secondary, postsecondary and professional educational needs. Apart from print publications, many AAP members publish computer programs, databases, and other electronic software for use in online, CD-ROM and other digital formats.

AAP's Interest in Digital Distance Education and the Register's Report

AAP members -- and especially those whose primary markets come within the rubric of "educational publishing" -- have important stakes in promoting the development of digital distance education opportunities consistent with the rights of copyright owners and users of copyrighted works under the Copyright Act.

To the extent that copyrighted works constitute a significant portion of the instructional materials used in distance education programs, AAP members have dual interests in related copyright exemption issues. While all AAP members -- including trade book publishers and others not usually thought of as producers of "educational" materials -- are creators or owners of preexisting copyrighted works that may be used by other distance education providers, many AAP members (particularly our nation's leading educational publishers) are themselves well-established providers of distance education programs which often feature the copyrighted works of others as well as their own. Moreover, many of these works and programs involve collaborative efforts with academic institutions and non-profit entities such as museums and public broadcasting stations.

AAP participated actively in the recent series of demonstrations, hearings and requests for comments that were initiated by the Register to create an evidentiary record on which to base the recommendations required by Section 403 of the DMCA regarding "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."

AAP's Assessment of the Register's Report and Recommendations

AAP applauds the Register and her staff in the U.S. Copyright Office for doing an excellent job in conducting their study activities and crafting the Report. Given the obvious constraints imposed by the six-month statutory deadline for submitting the Report to Congress, the Register and her staff deserve recognition for conducting an extraordinarily thorough, open and impartial inquiry that offered ample opportunities for all interested parties to make their views and concerns known on a number of key issues regarding (1) the nature of distance education, (2) current related licensing practices, (3) the status of technological protections for the rights of copyright owners, (4) the application of current copyright law to digital distance education activities, and (5) prior attempts to address certain copyright issues through the negotiation of guidelines or the enactment of legislation.

The Report's summary and analysis sections, well-documented on the basis of the detailed record established through the Register's proceedings, provoke no serious disagreement or objection from the AAP. Unfortunately, the same cannot be said with respect to the Register's legislative recommendations.

The Report's Main Recommendations Are At Odds with its Key Findings

AAP objects to the Register's recommendation for Congress to revise Sections 110(2) and 112 of the Copyright Act primarily because the call for such legislative action at the present time cannot be justified under the Register's stated test for governmental intervention in the marketplace. In addition, the specific statutory recommendations at issue conflict with the Report's key observations regarding (1) the nature of today's distance education marketplace, and (2) the importance and status of technological measures against post-access infringing uses of copyrighted works.

Is government intervention through statutory revision necessary and appropriate at this time in the evolution of the digital distance education market? The Report points to a number of indications that today's marketplace for digital distance education is in a "state of flux" characterized by rapid and promising, but still evolving, developments which eventually will resolve whatever marketplace problems exist with respect to the use of preexisting copyrighted works of third-parties. (See, e.g., p.57-68, 141-144). Accordingly, the Register acknowledges the critical importance of "timing" in considering whether current law should be changed (p.141, 144), and states that the test for determining when such government intervention would be justified is whether the markets in which distance educators participate are "dysfunctional" in a manner and to a degree that calls for a legislative remedy. (p.144, 164).

AAP believes that, notwithstanding the Register's recommendations, the Report's extensive observations regarding the state of the marketplace answer this question with a resounding "NO!" While program providers undoubtedly experience some problems in using some preexisting copyrighted works of others in connection with digital distance education, the marketplace clearly is not "dysfunctional" by any reasonable definition of that term. To the contrary, the Report specifically states:

* Distance education in the U.S. is "a vibrant and burgeoning field" which the advent of digital and other new technologies for delivery has made "the focus of great creativity and investment." (p.1)

* "[T]he expanded audiences for these programs represent a potentially lucrative market, which the varied participants in the process, including both corporations and educational institutions, are seeking to tap." (Id.)

*Notwithstanding some copyright issues, "digital technologies have fostered a rapid expansion in recent years, as well as a change in profile [in which] many more distance education courses are being offered than ever before, and the number is growing exponentially." (p.9)

* "Today's distance education courses use digital technology extensively for varied purposes and in varied ways. The addition of digital technologies to the distance education palette has produced new models of learning, resulting in a richer and more interactive class environment." (p.13)

When the issue is examined in terms of the use of copyrighted works in digital distance education delivered via interactive networks like the Internet, it is clear that the admittedly limited scope of Section 110(2) has not produced a "dysfunctional" marketplace. In fact, efficacy of Section 110(2) is simply irrelevant in the vast number of instances where providers of distance education through interactive digital networks create their own content, use public domain materials, obtain licenses to use the preexisting copyrighted works of others, or engage in "fair use" of third-party materials. (p.38)

In these circumstances, the Register's finding that "the technological characteristics of digital transmissions have rendered the language of section 110(2) inapplicable to the most advanced delivery method for systematic instruction" (p.144) does not -- and cannot -- rationally constitute a judgment that the marketplace for digital distance education is "dysfunctional." And, frankly, we are at a loss to explain the Register's apparent conclusion to the contrary.

But even if it were reasonable to reach such a conclusion in the face of the Report's other findings and thus justify the call for legislative action, the Register's proposed revision to Section 110(2) would still be substantively flawed in at least two fundamental respects that would skew public policy in direct contradiction to clear findings in the Report.

The first fundamental flaw in the Register's recommendations for revising Section 110(2) is that it is conditioned on the general availability of effective, convenient and affordable post-access technological controls on unauthorized uses to ensure that the revised exemption maintains a balance of interests between copyright owners and users of works that is "comparable" to the balance that Congress carefully crafted into the existing exemption when it was first enacted. (p.144)

It is hard to understand how the Register, while stating that the exemption's broadened coverage "should be tied to the ability to deploy such measures in addition to access control" (p.152), can urge Congress to move forward with the proposed revisions to Section 110(2) when the Report clearly states:

"Sophisticated technologies capable of protecting content against unauthorized post-access use are just now in development or coming to market, and may become widely available in the near future. But they are not there yet in a convenient and affordable form that can protect all varieties of works, and market uncertainties remain." (p.141)

AAP shares the Register's evident belief that effective, convenient and affordable technological measures will eventually become widely-available in the marketplace for digital distance education. However, in light of the Report's recognition that developments in technologies for protecting content "are harder to predict" than developments regarding licensing mechanisms and delivery systems for digital distance education (p.67), we see no sense in urging Congress to quickly enact a broadened exemption that will either be inapplicable to most digital distance education providers or improperly invoked by them, due to their inability to meet the essential condition precedent of having effective post-access technological controls "in place." (p.151)

Similarly, the second fundamental flaw in the Register's legislative recommendations is the arbitrary limitation of its application to non-profit educational institution. AAP can see no sense in statutorily revising Section 110(2) for the exclusive benefit of "nonprofit educational institutions" when the Report contains such unequivocal findings as the following:

"While mainstream education in 1976 was the province of nonprofit institutions, today the lines have blurred. Profit-making institutions are offering distance education; nonprofits are seeking to make a profit from their distance education programs; commercial entities are forming partnerships with nonprofits; and nonprofits and commercial ventures are increasingly offering competitive products." (p.152-153)

The Register appears to acknowledge that revising Section 110(2) to keep up with technological developments, but not with the evolving status of program providers, is untenable for public policy purposes; however, after a cursory review of several alternative options, the Report fails to address the concerns it cites for not pursuing other possible choices and simply falls back on the scope of its Congressional mandate to justify going forward with a revised exemption that would still be applicable only to nonprofit educational institutions. (p.153-154) Such a result cannot be squared with the realities of the distance education marketplace, where it would create unfair and unjustifiable inequities among providers of digital distance education programs.

Because the Register's Report generally depicts an active and growing -- rather than "dysfunctional" --- marketplace for the continuing evolution of digital distance education, AAP believes that Congress should be guided at this time by the Register's wise and practical observation that "a certain degree of growing pains may have to be tolerated if the government is not to step in prematurely, in order to give market mechanisms the chance to evolve in an acceptable direction." (p.143-144)

As the Register elsewhere recommended regarding the market for licensing nonexempted uses of copyrighted works (p.167), AAP urges Congress to give the market for digital distance education sufficient "leeway to evolve and mature" before determining that statutory intervention is necessary and appropriate.

The Report's Other Recommendations

AAP's rejection of the Register's recommendations for statutory revision does not mean that book publishers believe that nothing can or should be done at this time to constructively address some of the issues cited in the Register's Report.

For example, AAP believes that the Register has already performed an important public service in the Report by identifying and clarifying specific issues of "confusion and misunderstanding" regarding the "fair use" doctrine (p.161-162). Although the Register correctly concludes that authoritative clarification of these issues does not require statutory amendment to Section 107 of the Copyright Act, we believe the Report underestimates the value of the Register's own authoritative statements on such matters, in recommending further clarification through the legislative history to any statutory action Congress might take with regard to distance education.

AAP believes that the particular points of "confusion and misunderstanding" about fair use which are discussed in the Report are precisely the kind of matters that -- in the absence of the need for corrective legislation -- the Register can and should authoritatively clarify for copyright owners and users of copyrighted works. We are confident that broad dissemination of the Report and, more specifically, its comments regarding the technological neutrality of the fair use doctrine and the significance of fair use "guidelines" will accomplish the task of clarification without the need for dependence on the legislative forum.

With respect to the issue of "fair use" guidelines, AAP agrees with the Report's comments regarding the potential value of "additional discussion among the interested parties of fair use as applied to digital distance education." (p.162) AAP was a committed participant in the CONFU discussions that, as the Report states, "helped to further the parties' understanding of their respective interests and concerns." (Id.) Like other participants, we recognize that the CONFU process had certain shortcomings that contributed to its inability to fully achieve its goal of producing consensus voluntary guidelines. Since the Report has identified some of the attributes that might achieve greater success in such a forum, AAP would be happy to explore with the Subcommittee and the Register possible prospects for further CONFU-type deliberations.

Similarly, AAP believes it could be worthwhile to further explore the Register's discussion and recommendation regarding the issue of so-called "orphan works." The difficulties caused by the inability to identify rightsholders of certain works is a general problem for all users of copyrighted works, including book publishers. The obstacle this situation presents in the licensing context is not limited to distance education providers, but applies to all endeavors involving a person's desire to make certain uses of the copyrighted works of others when they cannot locate the rightsholder.

AAP cannot comment at this time on the Register's discussion of the Canadian law's "compulsory license" approach to the "orphan works" issue because at present we have little information regarding its operation.

However, once again, we would caution against prematurely seeking government intervention if there are non-statutory approaches to the problem that may be considered. AAP believes, for example, that copyright owners and their representatives may be able to utilize digital technologies and their own increasing presence on the Internet to foster new and better ways to make ownership and licensing information available online. Powerful new search engines and databases should present practical ways of helping users to more efficiently target their efforts to trace the ownership of rights in copyrighted works.

In any event, AAP believes that the problem of "orphan works" has broad impact across the whole spectrum of copyright and user interests, and we would be delighted to explore the issue further with the Subcommittee, the Register and other interested parties.

Conclusion

As documented in the Register's Report, the marketplace for digital distance education is a dynamic and expanding world of evolving experimentation, collaboration and innovation. Rapid technological change is producing revolutionary rethinking of business and academic models, related institutions, and the whole educational enterprise. While copyright and related licensing issues have created a few obstacles for participants to overcome, they have in no way created "dysfunctional" markets that deny digital distance education providers the opportunity to produce exciting new educational experiences for a broad range of students through digital technologies.

No stakeholder in digital distance education has reached a stage of last resort or a point of no return on the copyright matters at issue. There is ample time and reason to let the flexibility of the marketplace, with the inherent checks and balances of competition, work out continuing copyright issues without the intrusion of government mandates. At the same time, it is worth exploring other forums for additional ways to resolve problems.

It is barely eight months since the landmark DMCA was enacted by Congress and signed into law by the President. Until we all get a better feel for how technological protections and copyright management information will be deployed under the protections of the DMCA, Congress should stay its law-writing pen as it learns through real-world applications what it has already wrought with respect to copyright law in the digital environment.

At the present time, Congress does not need to further amend the Copyright Act to promote distance education. There are many other creative ways in which Congress may use its power to promote distance education if it chooses to do so.

1. Throughout this statement, we refer to "digital distance education" because that is the term used by the Register in her Report. However, AAP urges Congress to keep in mind that "distance education through digital technologies" and "education using digital technologies" are indistinguishable because campus-based education augments the classroom experience with e-mail, chat rooms, online content, and home-page syllabi, making it impossible to craft an exemption for one and not the other.