Webcaster Settlement Act of 2008

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 7084) to amend section 114 of title 17, United States Code, to provide for agreements for the reproduction and performance of sound recordings by webcasters, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous material on the bill under consideration.

Mr. Speaker, I yield myself 3 minutes.

Mr. Speaker, I rise in support of H.R. 7084, the Webcasters Settlement Act of 2008, which grants authority to relevant parties to negotiate an alternative royalty rate for the use of music on Internet radio stations under the existing government compulsory license.

This license gives webcasters the privilege of using copyrighted recorded music at a government-mandated rate determined by the Copyright Royalty Judges.

The recent government rate was determined on March 2, 2007. After considering voluminous written submissions and 48 days of trial testimony that filled 13,288 pages of transcript, the Copyright Royalty Judges determined fair, marketplace-based rates, averaged over a 5-year rate period. The judges followed their authorizing statute and carried out their duties in a fair and impartial manner. Both sides were able to present thorough cases and the judges came to a fair result based on the evidence presented.

Since that determination, certain webcasters have requested that copyright owners enter into negotiation to offer an alternative rate for webcasters who meet unique conditions, and requested that the Committee on the Judiciary facilitate such negotiations. These negotiations have been proceeding in earnest over the past 2 months, and the parties are making considerable progress.

Because the parties will not be able to finish their negotiations before Congress recesses, however, and because authority by Congress is required for a settlement to take effect under the government compulsory license, we are pushing this legislation that will grant such authority and hope the negotiations will continue in a positive direction for both sides.

I might add that the issue of broadcasters who are doing or want to do webcasting negotiations in that area also will be starting in the immediate future.

I yield myself 1 additional minute.

It is an important principle that negotiations are more appropriate before the copyright royalty proceeding. However, these conversations that have taken place under the committee's auspices are occurring in unique and extraordinary political and business circumstances and are unlike typical marketplace negotiations.

This bill provides that any alternative private deal-making or any private deal regarding an alternative rate would not be precedential, unless, of course, the parties agreed that it should be. Some of the rates that are being discussed represent a large discount, a huge discount from what independent decisionmaking bodies have found to be marketplace rates, and less than what I understand many webcasters have been paying since the judges reached their decision.

Neither this deal nor this bill should be understood as a criticism of the judges' decision, and I would expect marketplace rates to be higher and at least a reflection of what the judges decided absent the distinct circumstances that apply here.

I hope this legislation will make it easier for more music to be performed online by paying services, and also that there will be an increase in compensation to creators.

I urge my colleagues to support the bill.

I reserve the balance of my time.

Mr. Speaker, I am very pleased to yield 3 minutes to the gentleman from Washington (Mr. Inslee), the author of this legislation. The gentleman has been very focused on this issue since the time the Copyright Royalty Board came down with what I view as a just decision, but which others may have a different opinion of.

I have great admiration and respect for the previous speaker, Mr. Cannon, who will be moving on from this body soon.

Mr. Speaker, I want to recognize a key person in all of this process on webcasting rates, a member of our subcommittee, a very active member of our subcommittee, the gentlelady from California, for as much time as she may consume.

I am pleased to yield again to the sponsor of this bill an additional minute.

Mr. Speaker, I yield myself such time as I may consume.

I just want to take a moment, the irony of both Mr. Smith and Mr. Cannon being on the floor at the same time. For so many years, I was on Ethics Committee with Mr. Smith as chairman during a big part of that time, on the Immigration Committee with Mr. Smith being chairman for a part of that time, and on Intellectual Property, when Mr. Smith was chairman for a serious part of that time.

I hate to say this in front of the ranking member of the Judiciary Committee, but with the gentleman from Utah, with whom I worked so closely on so many different aspects of the immigration issue, I will sorely miss you.

We didn't agree as much on all the intellectual property issues as we did on the immigration issues. But the other side of the coin is, I didn't agree with the ranking member of Judiciary on the immigration issues as much as I did on the intellectual property issues.

But in both cases it has really been a delight to work with both of you, and particularly you, Mr. Cannon, because at least for now you won't be back here next year. I will miss both your person and your work on these issues, and we shall prevail.

I do.

Mr. Speaker, in closing, I just want to say that we have before us legislation that is supported by the DMA association, the Digital Media Association and the Sound Exchange, the collection agency, as well as their component memberships, including the labels, the performers, the musicians, the backup singers, National Public Radio, the small webcasters. I should report, based on the conversations and an amendment that extends till February 15 the deadline, this bill does not have the opposition of the National Association of Broadcasters.

I urge the passage of H.R. 7084 and yield back the balance of my time.

Mr. Speaker, I am delighted to be here tonight to help pass the Webcaster Settlement Act of 2008. The reason is I really do believe the upshot of this legislation will be the survival of webcasting as we know it in the United States, to really allow our consumers and our constituents to continue to enjoy tremendous opportunities to listen to great music and great news over the Internet, and allow the continued development of businesses around the business model of webcasting.

I am very appreciative of Chairman Berman and his efforts to facilitate discussions to help resolve this difficult issue and to the ranking member, Mr. Smith, who is a cosponsor of this legislation. This really is a bipartisan effort to find a resolution to a difficult issue.

As Mr. Berman indicated, there is a wide divergence on what the right royalty to pay is. Certainly a lot of businesses were jeopardized by this decision. I just note one that led to this relief. Big R Radio, it is actually in the State of Washington where I hail from, under the CRB decision that gave rise to this issue, it would have caused Big R Radio to exceed by 150 percent of their revenues what they would have to pay in royalties.

We have heard many businesses would be in that situation.

We have been engaged now for some period of time, discussions to try to find a resolution and agreement between those who are webcasters, who have big dreams, and providing tremendous music to allow them to continue.

We hope that those will succeed. We think that we are close to a successful resolution of those discussions. Mr. Berman has been very helpful in that regard.

But to get there, we need to have this bill to make sure that when an agreement is reached, that it has, in fact, the sanction of the United States. This bill is really kind of simple. It just basically says that the parties, if they can reach an agreement, Uncle Sam will not get in the way. Certainly that makes sense from all standpoints on both sides of the aisle.

I just want to note how important it is. I know many people have been interested in this in the last few days to encourage Congress to pass this legislation. Webcasting really has become a fabric of people's daily lives.

I want to read one quote from Luis Jimenez, who is involved in Live365 network. He is from Frederick, Maryland. This is a quote:

``Internet radio gave me the freedom to put together my own format station without having to be a cookie-cutter station. Listeners and musicians love it because of the variety of music and the fact local and independent artists are played.'' That's a quote from the Frederick News Post.

This is really why our constituents love this service. We want to find a business model where webcasting can thrive, where consumers can listen, and, at some point, terrestrial broadcasters who will be able to simulcast under this the legislation, they will be able to access the benefit of this legislation, and they will be involved in negotiations to find a right, appropriate level.

I am delighted by the passage of this, and I thank all involved in this effort.

Mr. Speaker, I do also want to express my great respect for the previous speaker, Representative Cannon. He is a fellow of such great heart and cheerful countenance, it has been a pleasure to serve with him. He and I now belong or shortly will belong to an elite group. He will be joining the Former Members of Congress. I am also a member of the Former Members of Congress.

I just want to relate to him that many of us who are not serving at one time, it is a respectful and honorable position to be in. I want his family to know how much we respect his service. We know he is going to go on to do great things for his community and his family.

Congressman, I would like to tell you how much we respect you. Hope you come by and say hello on occasion. Congratulations.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, H.R. 7084, the Webcasting Settlement Act of 2008, grants limited statutory authority to SoundExchange, the government designated entity responsible for disbursing webcasting royalties. Specifically, the bill gives SoundExchange the ability to enter into and negotiate agreements with webcasters for the performance of sound recordings over the Internet.

As background, the Copyright Royalty Board last year issued its final rate determination in a webcasting proceeding. That decision, which was the product of a lengthy and extensive adjudicatory process open to all parties, has withstood all legal challenges in the D.C. Court of Appeals.

In issuing its final ruling, the CRB established the market rates and terms for the performance of statutorily licensed Internet streamed music for a 5 year period that ends December 31, 2010.

Preferring voluntarily negotiated settlements to the continuation of adversarial legal proceedings, SoundExchange and representatives from both the commercial and noncommercial webcasting operators have been attempting to craft a compromise that might end this litigation and provide certainty to sound recording copyright owners and webcasters alike.

While progress has reportedly been made, the law does not permit a successfully negotiated agreement to be given effect after the CRB has issued its final ruling. To provide the needed flexibility, the Webcaster Settlement Act of 2008 provides a limited window of time to enable the parties to try and reach a voluntary accord.

In supporting this legislation and approach, I believe it is particularly important that SoundExchange reach out and expand the number of webcasting representatives with whom they have been meeting. This will ensure all legitimate points of view are considered in negotiating settlements. This authority will accomplish little in the long run if the interests of the public and all significant stakeholders are not carefully weighed and reflected in the final agreements.

In closing, Mr. Speaker, I note this proposal is similar to the manner in which Congress resolved a webcasting royalty dispute in 2002.

While there are significant differences between H.R. 7084 and the earlier law, this bill is needed at this time. If this authority is utilized properly, it will benefit the public.

I urge my colleagues to support H.R. 7084.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, first I want to thank the gentleman from Washington (Mr. Inslee) for his comments.

I would like to yield as much time as he may consume to my colleague on the Judiciary Committee, the gentleman from Utah (Mr. Cannon) who is now serving as the ranking member of the Administrative and Commercial Law Subcommittee of the Judiciary Committee.

I too want to thank the gentleman from Utah (Mr. Cannon), my colleague on the Judiciary Committee, for his service to this institution and to our country.

Chris Cannon has served, while he has been on the Judiciary Committee, both as the chairman of the Commercial and Administrative Law Subcommittee, and as ranking member, a position he holds right now.

The gentleman from Utah has brought to that position an incredible knowledge and expertise and commitment to so many issues that impacts so many Americans in this country today.

He has, in my judgment, that rare blend of a sense of humor and a seriousness of purpose that make him an ideal Member of Congress. Those talents and those skills and his dedication to Congress and to our country will be missed, but we look forward to staying in touch with him and wish him well in his next adventure.

Mr. Speaker, I yield back the balance of my time.

Mr. Presdient, I am pleased that the Senate has passed the Webcaster Settlement Act of 2008, a short but important bill for all of us who love to listen to music online. I have long championed the development of new business models for transmitting music to the public, and I have been delighted to see the webcasting community grow and prosper. From tiny operations serving the smallest of musical niches, to collegiate stations playing cutting edge performers, to large established webcasters providing a whole new array of services to listeners, the online music world has truly blossomed in the last 10 years. But with all new growth comes growing pains, and we also must be constantly vigilant to ensure that the development of new business interests does not come at the expense of settled property rights.

When webcasting was even younger, I sponsored the Small Webcasters Settlement Act of 2004, which established a Copyright Royalty Tribunal to replace the old Copyright Arbitration Royalty Panel as the administrative body for determining--in the absence of privately negotiated contracts--the royalty rates to be paid by online music providers to the performers who hold the copyrights in that music. The new system has seen its first adjudications, and this legislation reflects the need for a slight readjustment in that system. The bill simply extends the time to next February during which the parties can negotiate their own rates, even after the CRB proceeding, and will permit any deal that is negotiated by that time to bind the interested parties.

I am not, in the normal course, a proponent of legislative readjustments like this one, but I understand the advisability of this particular extension. I will not, however, sanction repeated returns to Congress if webcasters are again dissatisfied with the results of a system that they urged upon us in 2004, and which they applauded when it was created. The parties on both sides of these agreements--the webcasters and the copyright owners--would be well advised to consider these negotiations seriously, and to behave appropriately. The rights of our creative artists are the life blood of the entire music industry, including that of the online music providers, and we all owe them respect.

I trust the parties when they tell us that the time extension will allow them to come to terms that will ensure mutual benefit to them, and ultimate benefit to all the listeners, like myself, who enjoy music transmitted over the Internet. I am pleased the Congress has passed this measure before recessing.

Mr. Speaker, I rise today in support of H.R. 7084, the Webcasters Settlement Act of 2008.

I want to thank my friend, Chairman Berman, for his tireless work on this issue, as well as Mr. Inslee, Ms. Zoe Lofgren and the ranking member of the Judiciary Committee, Mr. Smith.

Since the CRB's ruling in March of 2007, the stakeholders, including the Digital Media Association, NPR and RIAA, have been negotiating for a lower rate to preserve the existence of Internet radio as we know it.

We know that the rates set by the CRB would have killed Internet radio, and today we stand on the cusp of a major breakthrough after months of difficult negotiations between the private parties. This bill does nothing to affect the scope of performance rights or make any other changes to the underlying copyright law. It clearly does not affect broadcasters. They will not be bound by any settlement, negotiated settlement or settlement agreement.

This bill simply clears the path for the private negotiations to continue while Congress is in recess. I have long opposed congressional mandates and other government impositions on private parties.

I urge my colleagues to support this legislation. It simply gives the webcasters and copyright holders the freedom to continue the negotiation process.

Without this legislation, negotiation could not continue, and all parties would be bound by the CRB decision.

Mr. Speaker, this is likely to be the last time I address the House, at least for some time, and I would like to take a moment to thank the Judiciary Committee staff, and the majority staff, and minority staff, for their tireless work, and for the floor staff of both the majority and minority parties who have been amazingly good at keeping things moving here.

Finally, I would like to thank our wonderful clerical staff who keep things moving and have made this such a pleasant and wonderful place to do business. I think I should also like to add thanks to our security for the floor for the wonderful support they have been.

Would the gentleman yield?

This is an amazing, actually, pass. Mr. Inslee and I, of course, have worked on the Natural Resources Committee together and differed sharply on many issues, but never unpleasantly.

This is an amazing pass where people of such divergent views are together on the same issue. It's a nice send-off. I appreciate your kind comments and those of the gentlelady from California and the gentleman from Washington and the gentleman from Texas.