[Congressional Record Volume 153, Number 6 (Thursday, January 11, 2007)]
[Senate]
[Pages S446-S448]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself, Mr. Graham, Mr. Biden, and Mr. 
        Alexander):
  S. 256. A bill to harmonize rate setting standards for copyright 
licenses under section 112 and 114 of title 17, United States Code, and 
for other purposes; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, today I am pleased to introduce the 
Platform Equality and Remedies for Rights-holders in Music Act along 
with Senators Graham, Biden, and Alexander.
  The need to protect creative works has been an important principle 
recognized in our country since the time when our Constitution was 
first drafted.
  However, the founding fathers could not have predicted the path 
innovation would eventually lead us down, nor the amazing new 
technologies that we now take for granted.
  While many of us still enjoy traditional radio, this too is rapidly 
changing.
  Recently, radio stations have begun advertising for a national 
campaign to switch to High Definition, or HD, radio. This new platform 
is changing the way music is transmitted and, according to its 
promoters, ``radio has never sounded better.''
  In addition, we can now have music radio programs provided not just 
in our cars, or on traditional home stereos, but radio programs have 
expanded to be available through Internet, cable, and satellite music 
stations.
  And radio services are looking to use the new digital transmissions 
and new technologies to change how music is delivered so that the 
audience can not only listen but also record, manipulate, collect and 
create individual music play lists.
  Thus, what was once a passive listening experience has turned into a 
forum where consumers can create their own personalized music 
libraries.
  As the modes of distribution change and the technologies change, so 
must our laws change.
  The government granted a compulsory license for radio-like services 
by Internet, cable, and satellite providers in order to encourage 
competition and the creation of new products.
  However, as new innovations alter these services from a performance 
to a distribution, the law must respond.
  In addition, as the changing technology evolves the distinctions 
between the services become less and less, and the differences in how 
they are treated under the statutory license make less and less sense.

[[Page S447]]

  Therefore, I am introducing a bill that will begin to fix the 
inequities currently in the statute and open the door to further debate 
about additional issues that need to be addressed.
  First, the bill I am introducing today, the PERFORM Act, would create 
rate parity. All companies covered by the government license created in 
section 114 of title 17 would be required to pay a ``fair market 
value'' for use of music libraries rather than having different rate 
standards apply based on what medium is being used to transmit the 
music.
  The bill would also establish content protection. All companies would 
be required to use reasonably available, technologically feasible, and 
economically reasonable means to prevent music theft. In addition, a 
company may not 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.
  This does not mean such devices cannot be made or distributed. It 
simply means that the business must negotiate the payment for the music 
outside of the statutory license.
  The bill also contains language to make sure that consumers' current 
recording habits are not inhibited. Therefore, any recording the 
consumer chooses to do manually will still be allowed.
  In addition, if the device allows the consumer to manipulate music by 
program, channel, or time period that would still be permitted under 
the statutory license.
  For example, if a listener chooses to automatically record a news 
station every morning at 9:00 a.m.; a jazz station every afternoon at 
2:00 p.m., a blues station every Friday at 3:00 p.m., and a talk radio 
show every Saturday at 4:00 p.m., that would be allowable. In addition, 
that listener could then use their recording device to move these 
programs so that each program of the same genre would be back to back.
  What a listener cannot do is set a recording device to find all the 
Frank Sinatra songs being played on the radio-service and only record 
those songs. By making these distinctions this bill supports new 
business models and technologies without harming the songwriters and 
performers in the process.
  Unfortunately, this bill was unable to move last Congress primarily 
because of misinformation about what the bill does and does not do.
  However, there were also some questions that were raised, not about 
problems with the bill, but about ways to expand its reach. For 
example, currently the bill does not apply to traditional radio 
distributed by the broadcasters. This legislation only covers 
businesses that are under the section 114 license: Internet, cable, and 
satellite. Yet, some of my Republican colleagues argued that the bill 
should apply the same recording limitations to over-the-air 
broadcasters as are applied to Internet, cable, and satellite. While 
this change has not been made in the version of the bill I am 
introducing today, I believe it is an issue we should look at in the 
110th Congress.
  Also, the bill as introduced does not address the other conditions 
applied to Internet, cable, and satellite services in order for them to 
get the benefit of the statutory license. The one that I am most 
concerned with is interactivity.
  I think there is real confusion about what is and what is not allowed 
under the current statute: how much personalization and customization 
may these new services offer?
  Currently, licensing rates are higher for interactive services. 
However, there are clear disagreements as to what constitutes an 
``interactive'' service. I tried to have the parties meet to negotiate 
a solution to this issue so that we could include new language in this 
bill; however, the parties were so far apart that a solution could not 
be reached.
  Despite this, I still believe this is an important issue that must be 
addressed. As introduced, the bill calls for the Copyright Office to 
make recommendations to Congress, but I am hopeful that through the 
process of moving this bill through the Senate we can develop a 
solution sooner rather than rely on a study.
  Finally, some have raised concerns that applying content protection 
to all providers is unfair. They argue that if there is no connection 
between the distributor of the music and the technology provider that 
allows for copying and manipulating of performances then they should 
not be required to protect the music that they broadcast. In general, I 
do not agree. We know that there are websites out there now that 
provide so-called stream-ripping services that allow an individual to 
steal music off an Internet webcast.
  It is not enough to turn a blind eye to this type of piracy and do 
nothing simply because there is no formal connection between the 
businesses. At the same time, I am sympathetic to the concerns that if 
the type of technology a company uses is inadequate or ineffective, 
through no fault of their own, they should not be saddled with huge 
mandatory penalties.
  I am interested in looking at this issue more closely to see if there 
is some way to address this concern and find a compromise solution.
  To be clear, I see this as the beginning of the process. I think this 
legislation is a good step forward in addressing a real problem that is 
occurring in the music industry. Changes or additions may be necessary 
as the bill moves forward, but I believe to wait and do nothing does a 
disservice to all involved.
  Music is an invaluable part of all of our lives. The new technologies 
and changing delivery systems provide exciting new options for all 
consumers. As we continue to move forward into new frontiers we must 
ensure that our laws can stand the test of time.
  I look forward to working with my colleagues to pass this 
legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 256

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Platform Equality and 
     Remedies for Rights Holders in Music Act of 2007'' or the 
     ``Perform Act of 2007''.

     SEC. 2. RATE SETTING STANDARDS.

       (a) Section 112 Licenses.--Section 112(e)(4) of title 17, 
     United States Code, is amended in the third sentence by 
     striking ``fees that would have been negotiated in the 
     marketplace between a willing buyer and a willing seller'' 
     and inserting ``the fair market value of the rights licensed 
     under this subsection''.
       (b) Section 114 Licenses.--Section 114(f) of title 17, 
     United States Code, is amended--
       (1) by striking paragraph (1);
       (2) by redesignating paragraphs (2), (3), (4), and (5) as 
     paragraphs (1), (2), (3), and (4), respectively; and
       (3) in paragraph (1) (as redesignated under this 
     subsection)--
       (A) in subparagraph (A), by striking all after 
     ``Proceedings'' and inserting ``under chapter 8 shall 
     determine reasonable rates and terms of royalty payments for 
     transmissions during 5-year periods beginning on January 1 of 
     the second year following the year in which the proceedings 
     are to be commenced, except where a different transitional 
     period is provided under section 6(b)(3) of the Copyright 
     Royalty and Distribution Reform Act of 2004, or such other 
     period as the parties may agree.'';
       (B) in subparagraph (B)--
       (i) in the first sentence, by striking ``affected by this 
     paragraph'' and inserting ``under this section'';
       (ii) in the second sentence, by striking ``eligible 
     nonsubscription transmission''; and
       (iii) in the third sentence--

       (I) by striking ``eligible nonsubscription services and new 
     subscription''; and
       (II) by striking ``rates and terms that would have been 
     negotiated in the marketplace between a willing buyer and a 
     willing seller'' and inserting ``the fair market value of the 
     rights licensed under this section'';

       (iv) in the fourth sentence, by striking ``base its'' and 
     inserting ``base their'';
       (v) in clause (i), by striking ``and'' after the semicolon;
       (vi) in clause (ii), by striking the period and inserting 
     ``; and'';
       (vii) by inserting after clause (ii) the following:
       ``(iii) the degree to which reasonable recording affects 
     the potential market for sound recordings, and the additional 
     fees that are required to be paid by services for 
     compensation.''; and
       (viii) in the matter following clause (ii), by striking 
     ``described in subparagraph (A)''; and
       (C) by striking subparagraph (C) and inserting the 
     following:
       ``(C) The procedures under subparagraphs (A) and (B) shall 
     also be initiated pursuant to a petition filed by any 
     copyright owners of sound recordings or any transmitting 
     entity indicating that a new type of service on which sound 
     recordings are performed is or is

[[Page S448]]

     about to become operational, for the purpose of determining 
     reasonable terms and rates of royalty payments with respect 
     to such new type of service for the period beginning with the 
     inception of such new type of service and ending on the date 
     on which the royalty rates and terms for preexisting 
     subscription digital audio transmission services, eligible 
     nonsubscription services, or new subscription services, as 
     the case may be, most recently determined under subparagraph 
     (A) or (B) and chapter 8 expire, or such other period as the 
     parties may agree.''.
       (c) Content Protection.--Section 114(d)(2) of title 17, 
     United States Code, is amended--
       (1) in subparagraph (A)--
       (A) in clause (ii), by striking ``and'' after the 
     semicolon;
       (B) in clause (iii), by adding ``and'' after the semicolon; 
     and
       (C) by adding after clause (iii) the following:
       ``(iv) the transmitting entity takes no affirmative steps 
     to authorize, enable, cause or induce the making of a copy or 
     phonorecord by or for the transmission recipient and uses 
     technology that is reasonably available, technologically 
     feasible, and economically reasonable to prevent the making 
     of copies or phonorecords embodying the transmission in whole 
     or in part, except for reasonable recording as defined in 
     this subsection;'';
       (2) in subparagraph (C)--
       (A) by striking clause (vi); and
       (B) by redesignating clauses (vii) through (ix) as clauses 
     (vi) through (viii), respectively; and
       (3) by adding at the end the following:

     ``For purposes of subparagraph (A)(iv), the mere offering of 
     a transmission and accompanying metadata does not in itself 
     authorize, enable, cause, or induce the making of a 
     phonorecord. Nothing shall preclude or prevent a performing 
     rights society or a mechanical rights organization, or any 
     entity owned in whole or in part by, or acting on behalf of, 
     such organizations or entities, from monitoring public 
     performances or other uses of copyrighted works contained in 
     such transmissions. Any such organization or entity shall be 
     granted a license on either a gratuitous basis or for a de 
     minimus fee to cover only the reasonable costs to the 
     licensor of providing the license, and on reasonable, 
     nondiscriminatory terms, to access and retransmit as 
     necessary any content contained in such transmissions 
     protected by content protection or similar technologies, if 
     such licenses are for purposes of carrying out the activities 
     of such organizations or entities in monitoring the public 
     performance or other uses of copyrighted works, and such 
     organizations or entities employ reasonable methods to 
     protect any such content accessed from further 
     distribution.''.
       (d) Definition.--Section 114(j) of title 17, United States 
     Code, is amended--
       (1) by redesignating paragraphs (10) through (15) as 
     paragraphs (11) through (16), respectively; and
       (2) by inserting after paragraph (9) the following:
       ``(10)(A) A `reasonable recording' means the making of a 
     phonorecord embodying all or part of a performance licensed 
     under this section for private, noncommercial use where 
     technological measures used by the transmitting entity, and 
     which are incorporated into a recording device--
       ``(i) permit automated recording or playback based on 
     specific programs, time periods, or channels as selected by 
     or for the user;
       ``(ii) do not permit automated recording or playback based 
     on specific sound recordings, albums, or artists;
       ``(iii) do not permit the separation of component segments 
     of the copyrighted material contained in the transmission 
     program which results in the playback of a manipulated 
     sequence; and
       ``(iv) do not permit the redistribution, retransmission or 
     other exporting of a phonorecord embodying all or part of a 
     performance licensed under this section from the device by 
     digital outputs or removable media, unless the destination 
     device is part of a secure in-home network that also complies 
     with each of the requirements prescribed in this paragraph.
       ``(B) Nothing in this paragraph shall prevent a consumer 
     from engaging in non-automated manual recording and playback 
     in a manner that is not an infringement of copyright.''.
       (e) Technical and Conforming Amendments.--
       (1) Section 114.--Section 114(f) of title 17, United States 
     Code (as amended by subsection (b) of this section), is 
     further amended--
       (A) in paragraph (1)(B), in the first sentence, by striking 
     ``paragraph (3)'' and inserting ``paragraph (2)''; and
       (B) in paragraph (4)(C), by striking ``under paragraph 
     (4)'' and inserting ``under paragraph (3)''.
       (2) Section 804.--Section 804(b)(3)(C) of title 17, United 
     States Code, is amended--
       (A) in clause (i), by striking ``and 114(f)(2)(C)''; and
       (B) in clause (iv), by striking ``or 114(f)(2)(C), as the 
     case may be''.

     SEC. 3. REGISTER OF COPYRIGHTS MEETING AND REPORT.

       (a) Meeting.--Not later than 90 days after the date of 
     enactment of this Act, the Register of Copyrights shall 
     convene a meeting among affected parties to discuss whether 
     to recommend creating a new category of limited interactive 
     services, including an appropriate premium rate for such 
     services, within the statutory license contained in section 
     114 of title 17, United States Code.
       (b) Report.--Not later than 90 days after the convening of 
     the meeting under subsection (a), the Register of Copyrights 
     shall submit a report on the discussions at that meeting to 
     the Committee on the Judiciary of the Senate and the 
     Committee on the Judiciary of the House of Representatives.
                                 ______