[Congressional Record Volume 155, Number 85 (Tuesday, June 9, 2009)]
[House]
[Pages H6330-H6332]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    WEBCASTER SETTLEMENT ACT OF 2009

  Mr. JOHNSON of Georgia. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 2344) to amend section 114 of title 17, United 
States Code, to provide for agreements for the reproduction and 
performance of sound recordings by webcasters.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2344

       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 ``Webcaster Settlement Act of 
     2009''.

     SEC. 2. AUTHORIZATION OF AGREEMENTS.

       Section 114(f)(5) of title 17, United States Code, is 
     amended--
       (1) in subparagraph (D), by striking ``2008'' and inserting 
     ``2008, the Webcaster Settlement Act of 2009,'';
       (2) in subparagraph (E)(iii), by striking ``to make 
     eligible nonsubscription transmissions and ephemeral 
     recordings''; and
       (3) in subparagraph (F), by striking ``February 15, 2009'' 
     and inserting ``at 11:59 p.m. Eastern time on the 30th day 
     after the date of the enactment of the Webcaster Settlement 
     Act of 2009''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Georgia (Mr. Johnson) and the gentleman from California (Mr. Issa) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Georgia.


                             General Leave

  Mr. JOHNSON of Georgia. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days to revise and extend their remarks and 
include extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. JOHNSON of Georgia. I yield myself such time as I may consume.
  Mr. Speaker, the Webcaster Settlement Act of 2009 allows the 
recording industry and the providers of Internet radio, also known as 
Webcasters, to negotiate reasonable royalty rates for the streaming of 
sound recordings on the Internet.
  While a relatively new technology, the audience for Internet radio is 
growing rapidly. Fifty to 70 million Americans listen to Internet radio 
each month, in part because of the diverse programming available to 
cater to many different musical tastes.
  In 1995, Congress passed a digital performance right for sound 
recordings. In 1998, the Digital Millennium Copyright Act expanded the 
right to Internet radio services by granting them the privilege of 
using copyrighted music at an industry-negotiated rate, or in the event 
the industry could not negotiate a rate, at a government-mandated rate 
determined by the Copyright Royalty Board, or CRB.
  At the request of Webcasters, in 2004 Congress enacted the Copyright 
Royalty and Distribution Reform Act, which authorized a CRB proceeding 
to set fair statutory rates for Internet radio. Accordingly, in 2007, 
the CRB announced new statutory royalty rates for sound recordings to 
be paid by Webcasters.
  The CRB's decision, which sets rates on a minimum fee, per-song, per-
listener formula, would require Webcasters to pay significantly higher 
royalties than they previously paid under a percentage-of-revenue 
model.
  Because of concerns that the higher rates are likely to threaten the 
future of Internet radio, Congress enacted the Webcaster Settlement Act 
of 2008. Signed into law last October, it allowed for the 
implementation of royalty fee agreements reached on or before February 
15, 2009, between the recording industry and Webcasters that would 
serve as an alternative to the payment scheme set forth in the CRB 
decision.
  While some Webcasters were able to reach consensus with the recording 
industry, others have not yet reached an agreement. Enactment of the 
Webcasters Settlement Act of 2009 will give more parties an opportunity 
to reach a consensus by allowing them to negotiate alternative rates. 
This opportunity to reach consensus will protect the viability of 
technology enjoyed by millions of Americans every day.
  This legislation has the full support of the relevant parties. I 
commend the Internet radio and recording industries for the substantial 
progress that has been made in negotiations in recent months, and I 
encourage them to resolve all outstanding issues promptly so that we 
may see a thriving Internet radio industry in the near future.
  I commend my colleague, Jay Inslee of Washington, for his leadership 
on this legislation, as well as Intellectual Property Subcommittee 
Chairman Howard Berman for facilitating discussions between the 
parties.
  I would like to also commend Judiciary ranking member, Mr. Lamar 
Smith, for his leadership in making this a truly bipartisan effort, and 
I urge my colleagues to support this important legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ISSA. Mr. Speaker, it is my pleasure to yield such time as he may 
consume for our response to the gentleman from South Carolina (Mr. 
Brown).
  Mr. BROWN of South Carolina. Mr. Speaker, I appreciate the gentleman 
from California yielding.
  H.R. 2344, the Webcaster Settlement Act of 2009, grants limited 
statutory authority to SoundExchange, the government-designated entity 
that is responsible for disbursing Webcasting royalties to copyright 
owners.
  The bill gives SoundExchange the legal authority to effect an 
agreement that has already been negotiated with certain ``pureplay'' 
Webcasters for the performance of sound recordings over the Internet.

[[Page H6331]]

                              {time}  1400

  Under the terms, the bill will provide a window of 30 days for other 
Webcasters to agree to be bound by this new agreement.
  For those Webcasters who choose to take advantage, they will be able 
to substitute the rate and rate calculation methods provided in the 
agreement for those previously announced by the copyright royalty 
judges, CRJs, on April 30, 2007.
  These new terms will run through the end of 2015, which means that 
this group of Webcasters and sound recording artists who are due 
royalties under the Webcasting licensing will benefit from the extended 
period of certainty in their economic relationship.
  Mr. Speaker, I have a strong preference for voluntarily negotiating 
settlements, which allow each side to compromise, claim a measure of 
victory, and go home.
  This is particularly true when the alternative is for parties to 
engage in lengthy and expensive adversarial legal and lobbying efforts 
such as those that have followed the CRJs' determination in the 
Webcasters proceedings in 2007.
  When they issued their 117-page final order, the CRJs established the 
statutory rates and the terms for the performance of compulsorily 
licensed Internet streamed music for a 5-year period that is due to 
expire December 31, 2010.
  The law provides this process because we have an obligation to ensure 
that copyright owners whose works are made available in a government-
mandated license are fairly compensated by the private parties who seek 
to benefit from such use.
  Indeed, the Judiciary Committee and the Congress established the CRJ 
process, in no small part, in response to Webcasters' concerns that the 
previous Copyright Arbitration Royalty Panel, or CARP, process 
effectively prohibited many small entities from participating.
  Nevertheless, despite their advocacy for this process, some 
Webcasters have suggested from time to time that the CRJs acted 
unfairly in reaching their decision. But the record reveals that the 
decision came at the end of an 18-month proceeding that included 48 
days of testimony, 192 exhibits, 475 pleadings, motions and orders, and 
a transcript that exceeded 13,000 pages.
  Notwithstanding these facts, the Congress enacted the Webcasting 
Settlement Act of 2008 late last year to provide an additional period 
of time for parties to negotiate private agreements. That period 
expired February 15, 2009.
  Several entities, including the National Association of Broadcasters, 
are to be commended for reaching an accord during this window, but it 
appears a number of others were either unable or unwilling to come to 
terms during the generous period of time that Congress provided.
  Mr. Speaker, I urge my colleagues to support H.R. 2344, but in so 
doing, I note that it seems a bit like the tail wagging the dog for 
Congress to legislate and create exceptions to the due process and 
notice requirements in the existing statutory process each time one 
party or another calculates they could get a better deal by 
disregarding the deadline the law provides.
  Mr. JOHNSON of Georgia. Mr. Speaker, at this time, I would yield to 
my colleague from the great State of Washington, the Honorable Jay 
Inslee, as much time as he may consume.
  Mr. INSLEE. Mr. Speaker, I'm pleased to commend the Webcaster 
Settlement Act of 2009 to my colleagues.
  I just want to make two or three points. First, this phenomenon of 
online radio is just a tremendous service for our constituents; 42 
million Americans are enjoying this on at least a semiregular basis. It 
is growing rapidly. It is a very, very beloved service. And when it 
goes missing, as it did recently in my City of Seattle, a little 
station called OCO was sort of providing underground music to my local 
community and had to shut down as a result of the CRB decision, and it 
is much missed. We hope to get this and many other things back up when 
we get this settlement going.
  Second, I think there is widespread agreement that the average 47 
percent of revenues that the CRB decision would require simply is not 
sustainable for the industry. And I want to commend all parties to the 
discussions to try to find an appropriate way to move forward.
  The third point I want to make is that keeping online radio going and 
healthy is not just about entertainment; it's about news, it's about 
public information, it's about emergency preparedness. We've got to do 
everything we can to give our constituents multiple sources of 
information. By allowing this bill to go through--and, hopefully, the 
parties will reach a final settlement--we're going to allow a democracy 
to blossom.
  So I want to thank Chairman Conyers and Ranking Member Smith for 
their cooperation in facilitating this and commend this bill to my 
colleagues.
  Mr. ISSA. Mr. Speaker, I now yield myself such time as I may consume.
  Mr. Speaker, I strongly support this legislation and urge its 
passage, and I do so for a reason that I believe does tie fairly into 
another piece of legislation. This is a piece of bipartisan legislation 
with Chairman Conyers. Another piece tries to deal with a greater 
inequity than even this one.
  While Internet broadcasters or podcasters or Webcasters pay as much 
as half of their revenues, half of their gross revenues if they play 
performances of music, and NAB was cited as being a participant, let me 
make something very clear, Mr. Speaker. The National Association of 
Broadcasters has chosen to have an absolute ``burn the bridge'' 
attitude toward terrestrial broadcasters paying even a cent.
  I join with Chairman Conyers, Mr. Berman, myself, and many others, in 
urging that this pattern of lowering to what we believe is a more fair 
rate or helping lower to what we believe is a more fair rate, in fact, 
flies in the face of terrestrial broadcasters continuing to say that 
the only fair amount to pay in the way of royalties to the music 
producers, the actual performers, is zero.
  The public today, Mr. Speaker, when they hear this, if they hear 
this, will be shocked to find out that when they listen to terrestrial 
radio, nothing is paid to the artist.
  Well, if they listen to Internet radio, actually more than half in 
some cases of the gross revenues of these Internet broadcasters is paid 
to the performers.
  As Mr. Inslee said, I do believe that perhaps it is too much; that 
there is, in fact, a point at which, when you tax something too much, 
even if it's taxed to pay the performance, you may get too little of 
it. To that extent, we need to find an amount that balances fairly 
compensation for the creative artist who brought us this fine music and 
those who would seek to make it available to the public.
  I hope that this piece of legislation will help for those doing 
business on the Internet and that H.R. 2344 will be quickly adopted and 
that it will lead to more affordable rates for the Internet.
  But I cannot, in good conscience, fail to mention that these 
companies trying to start and promote a new industry and a service in 
many places in which terrestrial broadcasts may be poor or not 
available at all find themselves hampered while they pay half of their 
revenues out in royalties, competing against terrestrial broadcasters 
who insist on continuing to pay not a penny.
  So, Mr. Speaker, I will look for this legislation to become law. I 
look for the other legislation behind it to be brought to the floor, 
fairly considered, and voted on in order to bring performance fairness.
  I reserve the balance of my time.
  Mr. JOHNSON of Georgia. Mr. Speaker, I would join my colleague on the 
other side of the aisle in support of H.R. 848, which is the bill that 
you just mentioned, and the reason why is because it's just an issue of 
fairness. It's fairness to the artist as well as fairness to the 
platforms upon which we hear these sound recordings, Internet radio 
being one.
  Cable, satellite, they have to pay performance royalties, which is 
really performers' royalties. They must pay that. But the broadcast 
industry, AM/FM radio, basically, is protected, if you will, or 
exempted from having to pay. This is anticompetitive, and it also 
results in great tragedy where these radio stations are able to play 
music repetitively that we all enjoy listening to, and then the artist 
who performs the music doesn't get a dime. And so many of them are 
forced to work what I call the ``Chitlin Circuit'' and, you

[[Page H6332]]

know, can't even purchase their prescription medication for diabetes, 
whatever infirmity that they may have. And then some even die indigent 
and there's no coverage for burial expenses.
  And so it's really an issue of fairness. And unfortunately, the 
broadcast industry has done a despicable thing, and that is to play the 
race card. And they do it with the deceptive and false statement that 
H.R. 848 is an attempt to drive black broadcasters, black radio 
stations off, out of existence, and nothing could be further from the 
truth.
  May I inquire though, Mr. Speaker, as to whether or not there are 
anymore speakers?
  Mr. ISSA. Mr. Speaker, I have no further speakers at this time and 
would close quickly when the gentleman is ready.
  Mr. JOHNSON of Georgia. Mr. Speaker, I will yield back.
  Mr. ISSA. Mr. Speaker, I thank the gentleman from Georgia. I, again, 
reiterate my appreciation for his appropriate and wonderful statements 
on H.R. 848, a bill that would simply eliminate Congress' prohibition 
on the Copyright Royalty Board from reaching a fair and equitable 
royalty for performers.
  I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Cummings). The question is on the motion 
offered by the gentleman from Georgia (Mr. Johnson) that the House 
suspend the rules and pass the bill, H.R. 2344.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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