[Congressional Record Volume 142, Number 39 (Wednesday, March 20, 1996)]
[Senate]
[Pages S2423-S2424]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BROWN (for himself, Mr. Thomas, Mr. Faircloth, Mr. 
        Thurmond, and Mr. Helms):
  S. 1628. A bill to amend title 17, United States Code, relating to 
the copyright interests of certain musical performances, and for other 
purposes; to the Committee on the Judiciary.


                      MUSIC LICENSING LEGISLATION

 Mr. BROWN. Mr. President, I introduce legislation that would 
lift a burden off of small businesses who currently pay fees to music 
licensing organizations under a complicated and cumbersome copyright 
law.
  Introduction of this legislation reflects what I consider a fair 
position. This bill acknowledges the different sides, and aims to reach 
a compromise position. This legislation comes after hours and hours of 
negotiations with different interests over the course of several 
months.
  Under current law, music licensing organizations are permitted to 
collect fees from those who play a radio or television in their 
commercial establishment. The music may be background music, or it may 
be music played at half-time during a football game. The music license 
fee applies to shoe stores, to diners, to shopping centers or any other 
business establishment.
  The artists who create this music certainly deserve compensation for 
their intellectual property. In fact, those artists are compensated for 
their labors. When a song is played over a radio or TV, the broadcaster 
pays for the rights to play that song. When we are at home, and we turn 
on the radio, we are not expected to pay a second fee. Yet, if a radio 
is played at a commercial establishment for no commercial gain, a 
second fee is charged for the music. This double-dipping smacks of 
unfairness.
  In addition, there is tremendous inequity in the way licensing 
companies assess these fees. The businesses are unable to see a list of 
the songs that are available for licensing. The businesses are unable, 
because of the market inequity, to bargain for a fair price. Instead, 
we have an anticompetitive environment where two or three licensing 
companies control almost all of the music available. Small businesses 
have two options: pay the preordained fee or turn off the radio or TV.
  The approach I have taken to address this problem aims at leveling 
this playing field. The legislation I am introducing would require the 
licensing companies to make a list of their repertory available so 
businesses can know what products they are paying for.
  The legislation would exempt small businesses from paying the fee for 
music played over radio and TV if a fee has already been paid. Where 
music has already been paid for by the broadcaster, the copyright owner 
has in fact been compensated.
  In addition, the legislation would establish arbitration to resolve 
disputes over fees. As it stands, if a retail store wishes to contest 
the fees paid to one of the licensing companies, they have to go to a 
court in New York. Moreover, full blown litigation in any case is often 
prohibitively expensive.
  The legislation would require the music licensing companies to offer 
per period programming licenses--in other words allow radio stations to 
purchase licenses for shorter time periods instead of 24 hours a day if 
they are only playing music in short spots between religious, news, or 
talk shows. I hope my colleagues will join me in leveling the playing 
field and will support this bill.
  I ask unanimous consent that letters in support of this bill from the 
National Federation of Independent Business, the National Religious 
Broadcasters, the National Restaurant Association, and the National 
Retail Federation be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            National Federation of


                                         Independent Business,

                                   Washington, DC, March 20, 1996.
     Hon. Hank Brown,
     U.S. Senate, Washington, DC.
       Dear Senator Brown: On behalf of the more than 600,000 
     members of the National Federation of Independent Business 
     (NFIB), I would like to express our support for your 
     compromise music licensing legislation. NFIB believes this 
     proposal will resolve many of the serious problems that exist 
     between the small business community and the music licensing 
     societies--ASCAP, BMI and SESAC.
       In a recent NFIB survey, more than 92 percent of small-
     business owners called for music licensing reform. The time 
     has come for fairness in music licensing.
       While your bill is different from S. 1137, it addresses 
     many of the issues that are of great importance to small 
     business owners. It allows small businesses to play 
     incidental music on radios and TV's without violating federal 
     copyright law. In addition, the measure gives small business 
     owners the right to arbitrate fee disputes in local forums 
     rather than forced to file a lawsuit in New York City. Many 
     small businesses across the country cannot afford the added 
     expense of traveling to New York City to dispute fees levied 
     by BMI or ASCAP. The legislation does protect the nine state 
     music licensing laws that have been enacted and the other 15 
     states with legislation pending.
       NFIB commends your efforts to fashion a workable compromise 
     and we look forward to working with you to enact music 
     licensing reform legislation.
           Sincerely,

                                             Donald A. Danner,

                                                   Vice President,
     Federal Governmental Relations.
                                                                    ____



                              National Religious Broadcasters,

                                     Manassas, VA, March 19, 1996.
     Hon. Hank Brown,
     U.S. Senate, Washington, DC.
       Dear Senator Brown: On behalf of National Religious 
     Broadcasters, I want to commend you and Senators Thurmond, 
     Faircloth, Helms and Thomas for introducing legislation to 
     address the inequities and abuses in the current system for 
     licensing copyrighted music. Our organization, which 
     represents over 800 religious broadcast stations and program 
     providers, is grateful for your leadership and is prepared to 
     support you in any way possible to pass this bill in the 
     104th Congress.
       Legislation is badly needed to rectify the injustices 
     forced upon Christian radio by the entertainment licensing 
     monopolies, ASCAP and BMI. For years, our members who use 
     limited amounts of music in their programming have tried to 
     negotiate a fair license that would allow them to pay simply 
     for the music they play and not be charged as if they played 
     copyrighted works all day long.

[[Page S2424]]

     In the face of monopoly powers granted to ASCAP and BMI by 
     the federal government, and in the absence of clear 
     Congressional policy to guide competition in the licensing 
     arena, we find we have no leverage with which to negotiate a 
     fair ``per program license''. Your bill goes a long way 
     toward solving that problem.
       We also understand your bill will require the music 
     licensing monopolies to disclose in a practical and user-
     friendly way the songs for which they have the rights to 
     collect royalties, and it will not allow ASCAP, BMI or any 
     other licensing organization to bring infringement actions 
     against music users for songs that are not listed in their 
     publicly available data bases. These provisions, together 
     with an effective per program license, are critical to 
     establishing music licensing rules that bear some resemblance 
     to a free market system.
       In addition to our strong support for your bill, I also 
     urge you and your cosponsors to block any copyright-related 
     legislation in the Senate that does not incorporate music 
     licensing reforms. It would be unconscionable for Congress to 
     enact any measures that enhance the economic clout of the 
     music licensing monopolies without first correcting their 
     abusive business practices. In the view of religious 
     broadcasters, the current system essentially forces Christian 
     radio stations to indirectly subsidize immoral, violent and 
     sexually explicit entertainers--entertainers who reap 
     millions in royalties from the unfair blanket licenses small 
     religious broadcasters are forced to buy. Please see the 
     attached resolution passed by the NRB Board of Directors in 
     February in this regard.
       Thank you again for taking a stand for fairness in music 
     licensing. In doing so, you're also making a stand for the 
     positive, life-changing power of religious radio. The 
     millions of Americans whose lives are enriched every day by 
     religious broadcasts are watching this issue very carefully.
           Sincerely,
     E. Brandt Gustavson, L.L.D., President.
                                                                    ____



                                   National Retail Federation,

                                   Washington, DC, March 19, 1996.
     Hon. Hank Brown,
     U.S. Senate, Washington, DC.
       Dear Senator Brown: On behalf of the National Retail 
     Federation and the 1.4 million U.S. retail establishments, I 
     am writing to support your compromise legislation to amend 
     federal copyright law to provide the nation's retailers with 
     protection against the arbitrary pricing, discriminatory 
     enforcement and abusive collection practices of music 
     licensing organizations.
       Retailers of all sizes, particularly smaller establishments 
     in your state, are confronted daily by costly and 
     unreasonable demands from music licensing organizations. 
     These organizations have monopoly power to set rates and 
     therefore, retailers are frequently asked to pay outrageous 
     and unfair licensing fees to play music which is only 
     incidental to the purpose of their business.
       Under your legislation, business establishments that use 
     radio or TV music with less than 5,000 square feet of public 
     space would be exempt from licensing fees as long as the 
     music was purely background or incidental to the purpose of 
     the business, and customers were not charged a fee to listen 
     to the music. While not all retailers are covered under this 
     compromise, we believe it represents significant progress. 
     Your bill also gives businesses the right to arbitrate fee 
     disputes in local forums rather than being forced to file 
     lawsuits in New York and requires music licensors to provide 
     consumers with full information about the music they are 
     purchasing.
       Thank you for your leadership on behalf of America's Main 
     Street. Your efforts and those of your staff to provide 
     relief are greatly appreciated. We look forward to working 
     with you to enact this legislation.
           Sincerely,

                                           John J. Motley III,

                                            Senior Vice President,
     Government and Public Affairs.
                                                                    ____



                              National Restaurant Association,

                                   Washington, DC, March 19, 1996.
     Hon. Hank Brown,
     U.S. Senate, Washington, DC.
       Dear Senator Brown: On behalf of the National Restaurant 
     Association and the 739,000 foodservice establishments 
     nationwide, we would like to express our support for your 
     compromise music licensing legislation. We believe this 
     proposal will resolve many of the serious problems that exist 
     between the business community and the music licensing 
     societies--ASCAP, BMI, and SESAC.
       As you know, your legislation represents major concessions 
     by the business community and is different from S. 1137, the 
     Fairness in Musical Licensing Act of 1995. More importantly, 
     however, you measure addresses many of the issues that are of 
     great significance to restaurateurs throughout the country. 
     These include:
       Allowing for a logical expansion of current law to allow 
     small businesses to play incidental music on radios and TVs 
     without violating federal copyright law.
       Giving businesses the right to arbitrate fee disputes in 
     local forums rather than being forced to file a lawsuit in 
     New York City.
       Requiring music licensors to provide consumers with full 
     information on the product--the music--they are buying.
       All of this is done while protecting the nine state laws 
     that have been enacted and the other 15 states with 
     legislation pending. As you know, S. 1619, introduced by 
     Senator Hatch would preempt all state music licensing laws. 
     It also, in our opinion, fails to address the number of the 
     problems that exist with the societies including arbitration 
     and access to repertoire.
       Senator, as you know, restaurateurs from around the country 
     have faced harassment, frivolous lawsuits, and arbitrary and 
     onerous licensing fees. On behalf of the entire industry, we 
     want to thank you and your staff for the countless hours you 
     have devoted to reach a reasonable compromise. We fully 
     support your efforts and will work towards enactment of your 
     bill.
           Sincerely,
                                                    Elaine Graham,
                              Senior Director, Government Affairs.

                                                    Katy McGregor,
                               Legislative Representative.
                                 ______