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CEA Attacks Latest Music Biz ‘Cache’ Move

Arlington, Va. – Proposed federal legislation would turn a free “fair use” into a paid-for “licensed use” by giving music companies and publishers the right to prevent the digital recording of individual songs from satellite radios and digital terrestrial radios unless broadcasters pay extra licensing fees, the CEA charged.

Under the Copyright Modernization Act of 2006 before the House Judiciary Committee, music companies and music publishers would also gain control over temporary cached copies in PCs, enabling them to charge extra licensing fees for music downloaded or streamed from authorized sources, said CEA president/CEO Gary Shapiro.

The provisions could be used by music companies to prevent sales of currently available time-shifting satellite radios, Shapiro complained, and it would let the music industry “double-dip” by charging for the right to temporarily cache music on PCs, even though caching makes possible “an activity [streaming and downloading] that copyright owners already get paid for.”

In addition, the provisions would burden computer and consumer electronics suppliers with new technology burdens that “dramatically change how computers and other consumer electronics products could operate,” he added.

The provisions would also lend merit to a music-industry lawsuit against XM Satellite Radio over the broadcaster’s time-shifting satellite radios, which enable recorded songs to be selected by title, artist, or album for playback, Shapiro said. The provisions would also let music companies and publishers charge for songs stored on servers for future broadcasting.

The legislation would “overturn” the 1992 Audio Home Recording Act (AHRA), which “specifically gave consumers the right to record off radio,” added Gigi Sohn, president of the Public Knowledge lobbying group.

The provisions are opposed by the National Association of Broadcasters (NAB), the federal Copyright Office, the Consumer Electronics Retailers Coalition, select broadcast groups, and satellite-radio broadcasters. The bill is also opposed by the Recording Industry Association of America (RIAA) “because it doesn’t go far enough,” Shapiro contended.

The provisions are part of otherwise laudable legislation that would “simplify the incredibly complex music-licensing system” and thus encourage legal alternatives to illegal peer-to-peer services, Sohn noted.

The bill is just one of five before Congress that would “force consumers to pay for every copy [of a song] for every device,” Shapiro charged. All of the bills, said CEA senior VP Michael Petricone, are designed to “restrict what products can do,” not to prevent unfettered Internet distribution or piracy.

The bill would also force higher royalties from non-interactive streaming services, who would have to pay extra for the right to store music on their servers and to enable PC caching, he contended.

In a letter to the chairman of the House Judiciary Committee, CEA and allied groups said the legislation would “constitute an extraordinary expansion of the rights of music publishers, imposing additional costs and burdens on the public, and would encroach in unprecedented ways upon long-held consumer rights to make private, noncommercial and personal uses of copyrighted works.”

In listing the groups’ primary objections, the letter complained that:

• “The bill would establish, for the first time, that every incidental network, cache and buffer copy made in digital transmission systems, digital networks, computers and personal consumer equipment is subject to the control of copyright owners and must be licensed (or subject to a specific exemption). The requirement that such fair uses be licensed sets a dangerous precedent for all fair uses of information, news and entertainment, regardless of whether in print, audio, or video.

• “The bill is a back-handed technology mandate that will stifle innovation. It would discriminate against services that ‘enable, authorize, cause or induce’ consumers to make perfectly lawful private home copies of transmitted performances.

• “The bill would grant music publishers a second, double-dip payment for licensed interactive performances, against the recommendations of the Copyright Office and despite the fact that they already receive fair market value, or more, from ASCAP, BMI and SESAC.”

In its current form, the letter concluded, the bill “will inflict significant harm on sound copyright policy, technological development, and the public interest.”