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115 Reform Bill Tabled for 2006, but Congress Commits to Early Attention in 2007
September 27, 2006 - Today Subcommittee Chairman Lamar Smith withdrew from Judiciary Committee consideration the Section 115 Reform Act, which was intended to simplify music licensing laws and help innovative legal digital music services compete against piracy. Chairman Smith said he was confident that the Committee would approve the bill, but passage into law this year was unlikely due to the end of Congress’s session later this week, so charging ahead did not seem productive at this time.
Chairman Smith, who may be Chairman of the full Judiciary Committee next year if Republicans keep control of the House of Representatives, said that music licensing reform is necessary, and therefore he will begin the 115 reform legislative process next year where he left off this year. The IP Subcommittee’s Ranking Democrat, Representative Howard Berman (who may chair the Subcommittee if Democrats win the House), echoed Chairman Smith’s intention to complete music licensing legislation next year, as legislation is necessary for legal music services to thrive. Representatives Darrell Issa (R-CA), Adam Schiff (D-CA) and others also spoke in favor of early legislative action next year.
“Though 115 reform legislation did not become law this year, DiMA succeeded in many ways,” said Executive Director Jonathan Potter. “We convinced Congressional IP policy leaders that 115 reform is necessary and that DiMA members’ conceptual goals – administrative simplicity, legal clarity and innovation freedom – are the right ones. We gained favorable Subcommittee action, and were positioned to gain approval in full Committee when the clock expired and the game ended. Next year, with the continuing support of Representatives Lamar Smith and Howard Berman, we are positioned to enact 115 reform legislation into law.”
“DiMA members are most appreciative of the support our efforts received from Chairman Jim Sensenbrenner and Ranking Democrat John Conyers of the House Judiciary Committee, and Chairman Lamar Smith and Ranking Democrat Howard Berman of the IP Subcommittee,” said Potter. “We look forward to working with these policy leaders and their Judiciary Committee colleagues next year, in what will certainly be a successful effort to put this bill over the top.”
DiMA Applauds Bill to Streamline Digital Music Licensing, Promote Music Innovation and Defeat Piracy
Reps. Lamar Smith (R-TX) and Howard Berman (D-CA) Introduce ‘Section 115 Reform Act of 2006’
June 8, 2006 – DiMA today commended Chairman Lamar Smith and Representative Howard Berman for introducing legislation that will promote greater innovation and competition among digital music providers, fair compensation to music creators and expanded music choice for consumers. The Section 115 Reform Act (SIRA) will provide a streamlined blanket licensing system that will enable digital music services to more efficiently access all copyrighted musical compositions. SIRA was approved today by the House of Representatives Subcommittee on Courts, the Internet and Intellectual Property.
“Streamlined music licensing guarantees digital music companies access to more music with lower transaction costs, which will in turn encourage marketplace innovation, keep legal music prices low and increase royalties to all creators,” said Jonathan Potter, Executive Director of DiMA. “Best of all, we are eliminating the greatest advantage enjoyed by pirate networks – our fiercest competitor and the greatest threat to the entire music industry.”
Under current law, the right to reproduce or distribute a composition is compulsory – it must be granted by the copyright owner – but it is done on a song-by-song basis. SIRA creates an easy-to-use blanket license, allowing digital music providers access to the entire catalogue of copyrighted music, which will be administered by one or more qualified “designated agent(s)”.
The new license will be available for all music-only activities. Royalty-free licenses for server copies will be guaranteed for Internet radio; all other licenses will be the subject of royalty negotiations and possible arbitration by the Copyright Royalty Board.
DiMA is hopeful that Congress will move forward quickly to enact this groundbreaking legislation.
Additional Resources:
DiMA, NMPA, RIAA Joint Statement
SIRA Fact Sheet
SIRA - HR 5553
Jon Potter testifies before the House Subcommittee on Courts, the Internet and Intellectual Property
PERFORM Act Introduced in Senate
On April 25, the “Platform Equality and Remedies for Rights Holders in Music Act of 2006” was introduced by Senate Judiciary Committee members Dianne Feinstein (D-CA), Lindsey Graham (R-SC), and Senate Majority Leader Bill Frist (R-TN).
In her introductory remarks (written) (video) Senator Feinstein explained that the bill is intended to accomplish two things:
1. Create royalty rate parity by mandating that all companies covered by the Section 114 statutory performance license would be required to pay a “fair market value” for use of musical recordings rather than having different rate standards applied based on what medium (cable, satellite, Internet) is being used to transmit the music; and
2. Establish content protection whereby all digital radio companies would be required to use reasonably available, technologically feasible and economically reasonable means to prevent music theft. The bill would also prohibit a company to 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.
The PERFORM Act and related digital radio issues were addressed in a Senate Judiciary Committee Hearing entitled “Parity, Platforms and Protection: The Future of the Music Industry in the Digital Radio Revolution.” Testimony was presented by:
- Mark Lam, CEO, Live365 Inc. (on behalf of DiMA)
- Anita Baker, Performing Artist
- Edgar Bronfman, Chairman and CEO, Warner Music Group
- Gary Parsons, Chairman of the Board, XM Satellite Radio
- Bruce Reese, President and CEO, Bonneville International Corporation (on behalf of NAB)
- Mr. Todd Rundgren, Lead Singer, The New Cars
- Victoria Shaw, Songwriter
- Recording Artists Coalition (RAC)
- American Federation of Musicians (AFM)
- American Federation of Television and Radio Artists (AFTRA)
View Video from Senate Committee on the Judiciary Hearing on: Parity, Platforms and Protection: The Future of the Music Industry in the Digital Radio Revolution
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