Mr. President, today I am pleased to introduce the Platform Equality and Remedies for Rights-holders in Music Act, or the PERFORM Act, along with Senators Graham and Frist. The need to protect…
Mr. President, today I am pleased to introduce the Platform Equality and Remedies for Rights-holders in Music Act, or the PERFORM Act, along with Senators Graham and Frist.
The need to protect creative works has been an important principle recognized in our country since its inception.
The founding fathers accurately understood the importance of intellectual property by including protective language in our Constitution, and in doing so they established a principle that would stand the test of time.
However, they could not have predicted that the path of innovation would eventually produce the amazing new technologies that we now take for granted.
While many of us still enjoy traditional analog radio, this, too, is rapidly changing. We now have music radio programs provided over the Internet, cable, and satellites. Even traditional radio is changing with the advent of new digital radio.
With the entry into the marketplace of these new music providers consumers are receiving the songs and artists they enjoy in new and innovative ways.
Yet, as these new business models and technologies are developed we must ensure that the artists and musicians who create and perform the music continue to be fairly compensated for their works.
Unfortunately, some of the new innovations have been used to supplant music sales and avoid fair compensation to the songwriters and performers.
From 1999 to 2004, total music sales have declined by 30 percent. Over the same period, CD sales declined 18 percent. The decline continued in 2005 as total album sales fell 7.2 percent year-over-year.
Some of this decline is due to outdated business models and competition from other entertainment products, some due to illegal actions and piracy, and some is due to outdated music licensing laws.
I believe our laws must strike the proper balance between fostering new business models and technology and protecting the property rights of the artists whose music is being broadcast.
I strongly support advancements in technology and I encourage ingenuity. The birth of the digital music place has been a boon for businesses and consumers. It is important that these new forums succeed and grow.
However, these new technologies and business models have become so advanced that the clear lines between a listening service and a reproduction and copying service has been blurred.
Historically, a radio service simply allowed music to be performed and listened to by an audience. However, many new services using the new digital transmissions and new technological devices have allowed consumers to also record, manipulate, and collect individual music play-lists off their radio-like services.
Thus, what was once a passive listening experience has turned into a forum where consumers can record, manipulate, reprogram and save songs to create their own personalized playlists.
As the modes of distribution change and the technologies change, so must our laws change. The government granted a compulsory license for radio-like services by Internet, cable, and satellite providers in order to encourage competition and new products.
However, as new innovations alter their services from a performance to a distribution the law must respond.
In addition, as the changing technology evolves, the distinctions between the services become less and less, and the differences in how they are treated under the statutory license make less sense.
Therefore I am introducing a bill that will begin to fix the inequities currently in the statute and open the door to further debate about additional issues that need to be addressed.
The bill I am introducing today with Senators Graham and Frist would: create rate parity--all companies covered by the government license created in Section 114 would be required to pay a fair market value for use of music libraries rather than having different rate standards apply based on what medium is being used to transmit the music; and establish content protection--all companies would be required to use reasonably available, technologically feasible, and economically reasonable means to prevent music theft. In addition, a company may not provide a recording device to a customer that would allow him or her to create their own personalized music library that can be manipulated and maintained without paying a reproduction royalty.
This does not mean such devices cannot be made or distributed. It simply means that the business must negotiate the payment for the music through the market rather than under the statutory license.
The bill also contains language to make sure that consumers' current recording habits are not inhibited. Therefore, any recording the consumer chooses to do manually will still be allowed. In addition, if the device allows the consumer to manipulate music by program, channel, or time period that would still be allowable under the statutory license.
For example, if a listener chooses to automatically record a news station every morning at 9:00; a jazz station every afternoon at 2:00; a blues station every Friday at 3:00; and a talk radio show every Saturday at 4:00; that would be allowable. In addition, that listener could then use their recording device to move these programs so that all programs of the same genre are back to back.
What a listener cannot do is set a recording device to find all the Frank Sinatra songs being played on the radio-service and only record those songs. By making these distinctions this bill supports new business models and technologies without harming the songwriters and performers in the process.
Unfortunately, anytime legislation is introduced there is a lot of misinformation about what it does. Often criticisms are lobbed without reviewing the actual text of the bill. So, let me be clear about some of the concerns I have heard.
The bill would not apply to over-the-air broadcasting. Terrestrial radio, i.e. traditional radio distributed by the broadcasters is not covered under this bill. This legislation only covers businesses that are under the 114 license--Internet, cable, and satellite.
The only application to broadcasters would be if they were to act as webcasters and simulcast their programs over the Internet, in which case they would be treated the same as all other Internet radio providers.
The bill would not inhibit technological advances. It would place limits on the types of recording devices cable, Internet and satellite providers may offer, IF they want to enjoy the benefit of a government license.
If, however, a company wants to offer new technologies that allow for manipulation of music so that a consumer may create their own music libraries, similar to a downloading service, they may. There is nothing in this bill prohibiting the use or creation of new technologies the company would simply lose the benefit of a government license.
The bill simply states that if a company wants to change its service from a performance to a distribution then they no longer are covered by the government license and must go to the record companies directly to negotiate a licensing agreement through the market.
The bill would not be discriminatory. Some argue that changing the rates or establishing content protection is discriminatory. However, under current law some businesses are required to pay higher licensing rates than others even though they provide essentially the same services.
In addition, if a new satellite company were to be formed today they would be required to pay a higher rate than the current two companies in the market--that is not fair. Instead this bill would establish the same rates and protections for all companies.
The argument that this bill is discriminatory ignores the inequities of current law as it applies to Internet, cable, old and new satellite providers and instead focuses on the differences between these new radio providers versus terrestrial or traditional over-the-air radio.
The argument is that there are already devices available and new technologies that allow consumers to capture and manipulate music being played by over-the-air broadcasters. Yet this bill does not apply to broadcasters and instead only applies to Internet, cable and satellite.
The conclusion being that by not covering broadcasters we are giving them a free pass and being unfair to the new businesses.
While the obvious argument is that the Judiciary Committee does not have jurisdiction to regulate over-the-air broadcasters, I think it is important to acknowledge that the Commerce Committee is actively looking into this issue right now. In addition, I am aware that there are active negotiations occurring between broadcasters and the record labels to develop similar protections for their services.
Thus, while some may be frustrated that jurisdiction may lie in different committees, efforts are on-going in each to address these issues. I do not believe we, in the Judiciary Committee, should wait and do nothing to protect artists and songwriters simply because the Commerce Committee has not yet moved legislation to deal with the same concern for terrestrial radio.
Having said that, let me be clear, this is the beginning of a process to address a very specific problem. I believe that as the process unfolds there will be additional improvements or other issues that may need to be added.
Already, some have raised questions about language in the bill and additional modifications to Section 114 that I believe should be looked at more closely.
I understand there is some concern about what fair market value means, especially under a government licensing scheme where there is not an actual competitive market. I think it makes sense to look into this issue and see if there is a definition that can be developed.
In doing this, I believe we should look at all the different models that have been used. We should look at what the courts have held, what the copyright office has used, what a real competitive market would entail, as well as other factors that may not have been considered.
The bill as introduced does not address the other conditions applied to Internet, cable, and satellite services in order for them to get the benefit of the statutory license. The one that I am most concerned with is interactivity.
I think there is real confusion about what is and what is not allowed under the current statute. How much personalization and customization may these new services offer?
Currently licensing rates are higher for interactive services. However, there are clear disagreements as to what constitutes an interactive service.
I tried to have the parties meet to negotiate a solution to this issue so that we could include new language this in the bill.
However, after two weeks and hours and hours of negotiations the parties were so far apart that a solution could not be reached. Despite this, I still believe this is an important issue that must be addressed.
Therefore, I put a placeholder in the bill that calls for the copyright office to make recommendations to Congress, but I am hopeful that through the process of moving this bill through the Senate we can develop a solution sooner rather than later.
I am hopeful that the parties will again meet and try to develop a compromise, however, if that does not occur I may try to work with my colleagues to develop a legislative solution independently.
Finally, some have raised concerns that applying content protection to all providers is unfair. They argue that if there is no connection between the distributor of the music and the technology provider that allows for copying and manipulating of performances then they should not be required to protect the music that they broadcast.
In general, I do not agree. We know that there are websites out there now that provide so-called stream-ripping services that allow an individual to steal music off an Internet webcast. It is not enough to turn a blind eye to this type of piracy and do nothing simply because there is no formal connection between the businesses.
At the same time, I am sympathetic to the concerns that if the type of technology a company uses is inadequate or ineffective, through no fault of their own, they can be saddled with huge mandatory penalties. I am willing to look at this issue more closely and see if there is some way to address this concern and find a compromise solution.
As I have said, this is the beginning of the process. I think this legislation is a good step forward in addressing a real problem that is occurring in the music industry.
Changes or additions may be necessary as the bill moves forward, but I believe to wait and do nothing does a disservice to all involved.
Music is an invaluable part of all of our lives. The new technologies and changing delivery systems provide exciting new options for all consumers. As we continue to move forward into new frontiers we must ensure that our laws can stand the test of time.
I look forward to working with my colleagues to pass this legislation.
I ask unanimous consent that the text of the bill be printed in the Record along with letters of support for the legislation.