By
Emmanuel Legrand
[This story was originally published in Music Week]
For the
music community, the past few months have been full of promises in
Washington, DC but also full of frustration. A lot of hope was put in
the comprehensive reviews of copyright law initiated by the Copyright
Office and by the House of Representative's Judiciary Committee, but
with little progress so far.
US Register of Copyrights Maria Pallante |
Despite
hours of hearings, testimonies and action behind the scenes, not one
single piece of copyright legislation has passed Congress, let alone
being endorsed by any of the houses' committees. The "hollistic"
review of the copyright system, in particular music licensing,
launched by the US Register of Copyrights Maria Pallante at the Copyright Office, has so far led to nowhere.
And the
two specific pieces of legislation -- the Songwriters' Equity Act,
which aims at addressing the way rates are set for the public use of
music, and the 'Fair Play, Fair Pay Act', which plans to introduce
performance rights for sound recordings for terrestrial media -- have
yet pass the floor. Meanwhile, the Department of Justice, which has
started to review the Consent Decrees ruling performance rights
societies ASCAP and BMI, has yet to render its verdict (see sidebar).
This is
nothing out of the ordinary, explain experienced Washingtonians, who
are versed in the shenanigans of the political process in the United
States capital and used to navigating around Capitol Hill, where
members of Congress are back this week from the summer recess. The
politics of Congress are subject to their own dynamics, explains
Jonathan Lamy, spokesperson for the Recording Industry Association of
America.
"Our
sense is that," says Lamy, "at least with regards to
Capitol Hill, there is a wait and see approach because there's going
to be two significant developments that will influence what
Congress may try to do: One is the decision of the DoJ on the consent
decrees, and when they will publish their decision; and the other is
the Copyright Royalty Board's decision on rates applied to Pandora
and similar services due by end of this year. Both are administrative
procedures that will happen no matter what, but if they do not
involve directly the Hill, they will affect Congress and influence
Congress if it decides to move ahead [on copyright issues]."
Central
to copyright issues are the House Judiciary Committee and its
Chairman Bob Goodlatte. On July 21, Goodlatte and Ranking Member John
Conyers announced the next step in the House Judiciary Committee’s
ongoing review of U.S. copyright law and issued joint invitations "to
all prior witnesses of the Committee’s copyright review hearings to
meet with Committee staff and provide additional input on copyright
policy issues."
The Recording Academy's Daryl Friedman |
This new
round of hearing was interpreted with different perspectives by DC
observers. "I think it is a good sign," says Daryl P.
Friedman, Chief Industry, Government & Member Relations Officer
for The Recording Academy. "It is good that they focus back on
copyright and keep the issue moving. We like the fact that the
Chairman keeps shedding the light on these issues."
But
others are less positive. A lobbyist called it "a slow walk and
not a process designed to drive things towards a conclusion,"
adding that the people who have been invited to meet with the
Committee are lobbyist and people from the copyright community who
they meet every day. "It is not as if we were hearing, 'I am
Chairman Goodlatte and I want to move things.' This is relaxed, slow,
and not a regimented plan to move forward."
Another
source, familiar with the Judiciary Committee's process, says the new
round of discussions is more about one-on-one meetings with
stakeholders "to get a sense of what their priorities are, and
what are the issues that are covered. They have open mind to see
where the process takes them. They are not shooting with an end
product in mind and want to see where process would take them."
The slow
pace of the Judiciary Committee reflects in fact a wider problem
facing the music industry on the Hill. As one lobbyist explains:
"There are some people who'd want to move things, but the
broader copyright world, like movie studios or software companies,
doesn't care about the music stuff, and their mindset is, 'In today's
world post-SOPA, anything that Congress moves is bad, so we'd like to
see nothing happen, because other guys are in order of march'."
The
other guys are effectively active. Tech companies, broadcasters and
digital services are using all their clout in DC to either block
things from happening or trying to reverse some pending legislation.
That's the whole point of a new coalition set up to fight the
proposed bill on performance rights for sound recordings and any the
changes to the copyright law that would give PROs greater bargaining
powers with digital services. The MIC Coalition (Music. Innovation.
Consumers.) regroups organisations such as the National Association
of Broadcasters, Google and DiMA, which represents digital services
such as Pandora. The MIC Coalition is "committed to a rational,
sustainable and transparent [copyright] system." [Two original
members -- Amazon and NPR, the National Public Radio -- have since
left the coalition.
In a
recent letter to the DoJ, the MIC Coalition called for stronger
Consent Decrees applicable to ASCAP and BMI, but also restrictions to
the music publishers, and even placing the third PRO, SESAC, which as
a privately-owned organisation, under a Consent Decree. "The MIC
Coalition's view is that no copyright owner should be able to say no
[to license digital services]," analyses a DC lobbist from the
creative community. "They have to let their works being used.
Just one work and you can have anti competitive power. So every
rights holder is a danger of acting in anti-competitive way."
For
rights owners, groups like the MIC Coalition illustrates the new
balance of power in DC, edging towards the tech community when it
comes to the Hill or the White House. Many executives in the creative
community believe that tech companies have an undue influence in DC.
In a keynote session during the Cutting Edge conference on August 28,
former NMPA General Counsel Jay Rosenthal, who joined this summer the
Wsshington, DC firm Mitchell Silberberg & Knupp, said that he
truly believed that "as content owners, we are losing the battle
on the politics of copyright."
He
elaborated: "When you look at politics in DC the biggest issue
is always money, and in this context it is money that is losing the
battle because Google and the rest of the [tech] companies have come
to DC in a major major way. They are now more lobbyists on the ground
in DC working for Google than for the whole content industry
combined. And we are now seeing the end result of this with what's
happening on Capitol Hill and with the administration. For many
decades, copyright interests have done well. When you needed to have
laws, you'd get them. Now, we are dealing with a completely new
dynamic in DC [with] folks that want to push back copyright, who want
to minimise copyright in all sorts of different ways having the upper
hand."
But if
all seasoned Washingtonians accept that the game has changed, with a
pendulum swinging towards the tech industry, they also suggest that at
no point that new found power could lead to anti-copyright or
anti-creators' rights legislation. One DC observer explains that
although the creative community does not have the financial clout and
influence of tech or media companies, there are elected members in
Congress who would not want to pass a bill that would go against the
rights of the music community. If one side strikes, the other
retaliates. "People [on the Hill] care about artist and music
and if artists speak up, they can stop it from happening," says
the executive. "The same will happen if the music community
tries to push a bill that the tech community does not want to see.
Not one party has the power to single-handily pass a legislation."
This
situation explains in part the current gridlock. "Part of that
is just the worry on each side that if you do open it up to get
things done, you'll get something worse than what you want to
achieve. So that might explain why they put the brakes," says an
observer. To make matter seven more complicated, copyright issues are
usually not partisan issues on the Hill. What legislators are looking
for is some form of consensus between stakeholders, so it takes a
long process to get there, says RIAA's Lamy. "Our issues need a
consensus between the major parties and at the moment there isn't
one," says Lamy.
Another
executive is more blunt: "At this point, in this Congress, I
don't think anything will pass, so we are building things towards the
next Congress, where we will see some crystallisation of broader
support for copyright. But not with this Congress."
Key
issues awaiting action in DC
Work in progress... |
The
Fair Play Fair Pay Act
Congressman
Jerrold Nadler, Ranking Member of the House Judiciary Subcommittee on
Courts, Intellectual Property, and the Internet, and Congresswoman
Marsha Blackburn, Vice Chair of the Energy and Commerce Committee,
introduced on April 13 this bipartisan legislation, to "harmonise
and modernise the outdated rules that currently govern music
licensing for digital and terrestrial radio broadcasts."
The
legislation would, among other things, introduce a terrestrial
performance right for sound recordings on AM/FM radio competes;
ensure that all forms of radio pay fair market value for music
performances; state that pre-1972 recordings have value and those who
use them must pay appropriate royalties for their use.
If
passed, this legislation would eventually put the United States on
par with most countries around the world, and could result in extra
revenues for performers and record labels worth several hundred
million dollars. This legislation is opposed by the National
Association of Broadcasters, which regroups the major radio and TV
operators in the country.
On the
Fair Pay Fair Play, RIAA's Jonathan Lamy remains optimistic that it
has a chance to pass despite sever opposition. "We believe this
is a right issue and we will continue to advocate for it as long as
it is necessary," he explains. "Obviously, we are faced
with the political clout of broadcasters and the fact that they are
in each congressional district makes very challenging to pass a bill
over their objections. But it is still the right issue to advocate."
According
to Daryl Friedman, the Recording Academy, which organises the Grammy
Awards, is in the process of "lighting a bit of fire" on
the Fair Play Fair Pay Act by organising a major nation-wide advocacy
event. On October 14, over 1600 of its members will visit local
policy-makers and representatives around the country. Labelled "
Grammys in my district", the initiative aims at informing
policy-makers on the issues important to the music community. Taking
place for the second consecutive year, the initiative will see 1600
Academy members visit 250 districts, against 100 visiting 77
districts last year. "This is the largest grassroots advocacy
initiative of its kind," says Friedman. "The 'Fair Play'
bill will be pushed for and [our members] will ask for Congress to
deal with comprehensive music licensing reform, but speak in favour
of any legislation that helps creators."
The
Songwriters Equity Act
The
Songwriter Equity Act was been reintroduced in both houses of
Congress in March 2015, following a first attempt in 2014. The
legislation is sponsored by Senator Orrin Hatch and Congressman Doug
Collins. It proposes to amend sections 114 and 115 of the Copyright
Act in order to require that Copyright Royalty Judges "establish
rates and terms that most clearly represent the rates and terms that
would have been negotiated in the marketplace between a willing buyer
and seller."
This
very simple piece of legislation would effectively allow PROs and
other rights holders to benefit from better rates than the current
ones set by tribunals. It is supported by PROs like ASCAP and BMI as
well as by the National Music Publishers Association.
The
modernisation of the Copyright Office
Register
of Copyrights Maria Pallante has on several occasion made a case for
the Copyright Office to be removed from the tutelage of the Library
of Congress. Pallante would like to see the CO set up as a
stand-alone government agency serving at the pleasure of the US
President, the Congress and other government agencies and with a
Register of Copyright directly appointed by the White House. Some DC
observers point out that the agenda of the Copyright Office has been
somewhat derailed by the announcement before the summer of the
retirement of the current Librarian of Congress James Billington,
under whose jurisdiction the CO operates.
An
observer of DC's political life points out that one of the few topics
that have gathered momentum is the future of the Copyright Office. In
her testimony at the end of April before the House Judiciary
Committee, Register of Copyright Maria Pallante focused most of her
time in explaining how she would envisage a modern CO. Explains the
source, "One big issue that has emerged [of all these talks] was
the need to modernise the Copyright Office, addressing its financial
issues and how to deploy a better technology in order to have an IT
system that is not outdated like the current system. Lot of
opportunities could come from an updated system. It could be an
incentive for more people to register they copyrights, it would open
to new search possibilities if tied into other databases and
incorporating data standards, like ISWC and other [identifiers]. All
these ideas are floating around and the pending appointment of a new
Librarian adds some complexity to the issues."
The
Department of Justice's review of the Consent Decrees
The U.S.
Department of Justice's Antitrust Division opened in 2014 a review of
the Consent Decrees that have been governing the two leading American
performance rights societies ASCAP and BMI since 1941. Both societies
and music publishers have been asking for the terms of the Consent
decrees to change in order to allow better negotiations with music
users and allow music publishers to partially withdraw their
repertoire from the PROs blanket licenses. The ASCAP Consent Decree
was last amended in 2001 and BMI's in 1994.
A DC-based source believes that "before the end of the year and
there will be a deal on the table [from the DoJ] and it will be a
take it or leave it." The options considered are the following:
Either it is a Consent Decree that works for the parties or does not.
If the changes proposed by the DoJ are unacceptable to ASCAP, BMI and
publishers, this will be open the door to a real crisis, says the
source, leaving them "with the only option to go to the Hill and
say, 'Congress you've got to save us.' That level of desperation will
lead to more help asked to the Hill. But it could also be the other
way around and the user community could very well not see positively
changes to the consent decrees too favourable to the PROs, and try to
have Hill override the DoJ project."
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