[Congressional Record (Bound Edition), Volume 154 (2008), Part 16]
[House]
[Pages 22832-22835]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    WEBCASTER SETTLEMENT ACT OF 2008

  Mr. BERMAN. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 7084) to amend section 114 of title 17, United States Code, 
to provide for agreements for the reproduction and performance of sound 
recordings by webcasters, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 7084

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Webcaster Settlement Act of 
     2008''.

     SEC. 2. AGREEMENTS ON BEHALF OF WEBCASTERS.

       Section 114(f)(5) of title 17, United States Code, is 
     amended--
       (1) in subparagraph (A)--
       (A) by striking ``small commercial'' each place it appears 
     and inserting ``commercial'';
       (B) by striking ``during the period beginning on October 
     28, 1998, and ending on December 31, 2004'' and inserting 
     ``for a period of not more than 11 years beginning on January 
     1, 2005'';
       (C) by striking ``a copyright arbitration royalty panel or 
     decision by the Librarian of Congress'' and inserting ``the 
     Copyright Royalty Judges''; and
       (D) in the second sentence, by striking ``webcasters shall 
     include'' and inserting ``webcasters may include'';
       (2) in subparagraph (B), by striking ``small commercial'' 
     and inserting ``commercial'';
       (3) in subparagraph (C)--
       (A) by striking ``Librarian of Congress'' and inserting 
     ``Copyright Royalty Judges'';
       (B) by striking ``small webcasters'' and inserting 
     ``webcasters''; and
       (C) by adding at the end the following: ``This subparagraph 
     shall not apply to the extent that the receiving agent and a 
     webcaster that is party to an agreement entered into pursuant 
     to subparagraph (A) expressly authorize the submission of the 
     agreement in a proceeding under this subsection.'';
       (4) in subparagraph (D)--
       (A) by striking ``the Small Webcasters Settlement Act of 
     2002'' and inserting ``the Webcaster Settlement Act of 2008'' 
     ; and
       (B) by striking ``Librarian of Congress of July 8, 2002'' 
     and inserting ``Copyright Royalty Judges of May 1, 2007''; 
     and
       (5) in subparagraph (F), by striking ``December 15, 2002'' 
     and all that follows through ``2003'' and inserting 
     ``February 15, 2009''.

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


                             General Leave

  Mr. BERMAN. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. BERMAN. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, I rise in support of H.R. 7084, the Webcasters 
Settlement Act of 2008, which grants authority to relevant parties to 
negotiate an alternative royalty rate for the use of music on Internet 
radio stations under the existing government compulsory license.
  This license gives webcasters the privilege of using copyrighted 
recorded music at a government-mandated rate determined by the 
Copyright Royalty Judges.
  The recent government rate was determined on March 2, 2007. After 
considering voluminous written submissions and 48 days of trial 
testimony that filled 13,288 pages of transcript, the Copyright Royalty 
Judges determined fair, marketplace-based rates, averaged over a 5-year 
rate period. The judges followed their authorizing statute and carried 
out their duties in a fair and impartial manner. Both sides were able 
to present thorough cases and the judges came to a fair result based on 
the evidence presented.
  Since that determination, certain webcasters have requested that 
copyright owners enter into negotiation to offer an alternative rate 
for webcasters who meet unique conditions, and requested that the 
Committee on the Judiciary facilitate such negotiations. These 
negotiations have been proceeding in earnest over the past 2 months, 
and the parties are making considerable progress.
  Because the parties will not be able to finish their negotiations 
before Congress recesses, however, and because authority by Congress is 
required for a settlement to take effect under the government 
compulsory license, we are pushing this legislation that will grant 
such authority and hope the negotiations will continue in a positive 
direction for both sides.
  I might add that the issue of broadcasters who are doing or want to 
do webcasting negotiations in that area also will be starting in the 
immediate future.
  The SPEAKER pro tempore. The gentleman's time has expired.
  Mr. BERMAN. I yield myself 1 additional minute.
  It is an important principle that negotiations are more appropriate 
before the copyright royalty proceeding. However, these conversations 
that have taken place under the committee's auspices are occurring in 
unique and extraordinary political and business circumstances and are 
unlike typical marketplace negotiations.
  This bill provides that any alternative private deal-making or any 
private deal regarding an alternative rate would not be precedential, 
unless, of course, the parties agreed that it should be. Some of the 
rates that are being discussed represent a large discount, a huge 
discount from what independent decisionmaking bodies have found to be 
marketplace rates, and less than what I understand many webcasters have 
been paying since the judges reached their decision.
  Neither this deal nor this bill should be understood as a criticism 
of the

[[Page 22833]]

judges' decision, and I would expect marketplace rates to be higher and 
at least a reflection of what the judges decided absent the distinct 
circumstances that apply here.
  I hope this legislation will make it easier for more music to be 
performed online by paying services, and also that there will be an 
increase in compensation to creators.
  I urge my colleagues to support the bill.
  I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, H.R. 7084, the Webcasting Settlement Act of 2008, grants 
limited statutory authority to SoundExchange, the government designated 
entity responsible for disbursing webcasting royalties. Specifically, 
the bill gives SoundExchange the ability to enter into and negotiate 
agreements with webcasters for the performance of sound recordings over 
the Internet.
  As background, the Copyright Royalty Board last year issued its final 
rate determination in a webcasting proceeding. That decision, which was 
the product of a lengthy and extensive adjudicatory process open to all 
parties, has withstood all legal challenges in the D.C. Court of 
Appeals.
  In issuing its final ruling, the CRB established the market rates and 
terms for the performance of statutorily licensed Internet streamed 
music for a 5 year period that ends December 31, 2010.
  Preferring voluntarily negotiated settlements to the continuation of 
adversarial legal proceedings, SoundExchange and representatives from 
both the commercial and noncommercial webcasting operators have been 
attempting to craft a compromise that might end this litigation and 
provide certainty to sound recording copyright owners and webcasters 
alike.
  While progress has reportedly been made, the law does not permit a 
successfully negotiated agreement to be given effect after the CRB has 
issued its final ruling. To provide the needed flexibility, the 
Webcaster Settlement Act of 2008 provides a limited window of time to 
enable the parties to try and reach a voluntary accord.
  In supporting this legislation and approach, I believe it is 
particularly important that SoundExchange reach out and expand the 
number of webcasting representatives with whom they have been meeting. 
This will ensure all legitimate points of view are considered in 
negotiating settlements. This authority will accomplish little in the 
long run if the interests of the public and all significant 
stakeholders are not carefully weighed and reflected in the final 
agreements.
  In closing, Mr. Speaker, I note this proposal is similar to the 
manner in which Congress resolved a webcasting royalty dispute in 2002.
  While there are significant differences between H.R. 7084 and the 
earlier law, this bill is needed at this time. If this authority is 
utilized properly, it will benefit the public.
  I urge my colleagues to support H.R. 7084.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BERMAN. Mr. Speaker, I am very pleased to yield 3 minutes to the 
gentleman from Washington (Mr. Inslee), the author of this legislation. 
The gentleman has been very focused on this issue since the time the 
Copyright Royalty Board came down with what I view as a just decision, 
but which others may have a different opinion of.
  Mr. INSLEE. Mr. Speaker, I am delighted to be here tonight to help 
pass the Webcaster Settlement Act of 2008. The reason is I really do 
believe the upshot of this legislation will be the survival of 
webcasting as we know it in the United States, to really allow our 
consumers and our constituents to continue to enjoy tremendous 
opportunities to listen to great music and great news over the 
Internet, and allow the continued development of businesses around the 
business model of webcasting.
  I am very appreciative of Chairman Berman and his efforts to 
facilitate discussions to help resolve this difficult issue and to the 
ranking member, Mr. Smith, who is a cosponsor of this legislation. This 
really is a bipartisan effort to find a resolution to a difficult 
issue.
  As Mr. Berman indicated, there is a wide divergence on what the right 
royalty to pay is. Certainly a lot of businesses were jeopardized by 
this decision. I just note one that led to this relief. Big R Radio, it 
is actually in the State of Washington where I hail from, under the CRB 
decision that gave rise to this issue, it would have caused Big R Radio 
to exceed by 150 percent of their revenues what they would have to pay 
in royalties.

                              {time}  2015

  We have heard many businesses would be in that situation.
  We have been engaged now for some period of time, discussions to try 
to find a resolution and agreement between those who are webcasters, 
who have big dreams, and providing tremendous music to allow them to 
continue.
  We hope that those will succeed. We think that we are close to a 
successful resolution of those discussions. Mr. Berman has been very 
helpful in that regard.
  But to get there, we need to have this bill to make sure that when an 
agreement is reached, that it has, in fact, the sanction of the United 
States. This bill is really kind of simple. It just basically says that 
the parties, if they can reach an agreement, Uncle Sam will not get in 
the way. Certainly that makes sense from all standpoints on both sides 
of the aisle.
  I just want to note how important it is. I know many people have been 
interested in this in the last few days to encourage Congress to pass 
this legislation. Webcasting really has become a fabric of people's 
daily lives.
  I want to read one quote from Luis Jimenez, who is involved in 
Live365 network. He is from Frederick, Maryland. This is a quote:
  ``Internet radio gave me the freedom to put together my own format 
station without having to be a cookie-cutter station. Listeners and 
musicians love it because of the variety of music and the fact local 
and independent artists are played.'' That's a quote from the Frederick 
News Post.
  This is really why our constituents love this service. We want to 
find a business model where webcasting can thrive, where consumers can 
listen, and, at some point, terrestrial broadcasters who will be able 
to simulcast under this the legislation, they will be able to access 
the benefit of this legislation, and they will be involved in 
negotiations to find a right, appropriate level.
  I am delighted by the passage of this, and I thank all involved in 
this effort.
  Mr. SMITH of Texas. Mr. Speaker, first I want to thank the gentleman 
from Washington (Mr. Inslee) for his comments.
  I would like to yield as much time as he may consume to my colleague 
on the Judiciary Committee, the gentleman from Utah (Mr. Cannon) who is 
now serving as the ranking member of the Administrative and Commercial 
Law Subcommittee of the Judiciary Committee.
  Mr. CANNON. Mr. Speaker, I rise today in support of H.R. 7084, the 
Webcasters Settlement Act of 2008.
  I want to thank my friend, Chairman Berman, for his tireless work on 
this issue, as well as Mr. Inslee, Ms. Zoe Lofgren and the ranking 
member of the Judiciary Committee, Mr. Smith.
  Since the CRB's ruling in March of 2007, the stakeholders, including 
the Digital Media Association, NPR and RIAA, have been negotiating for 
a lower rate to preserve the existence of Internet radio as we know it.
  We know that the rates set by the CRB would have killed Internet 
radio, and today we stand on the cusp of a major breakthrough after 
months of difficult negotiations between the private parties. This bill 
does nothing to affect the scope of performance rights or make any 
other changes to the underlying copyright law. It clearly does not 
affect broadcasters. They will not be bound by any settlement, 
negotiated settlement or settlement agreement.
  This bill simply clears the path for the private negotiations to 
continue

[[Page 22834]]

while Congress is in recess. I have long opposed congressional mandates 
and other government impositions on private parties.
  I urge my colleagues to support this legislation. It simply gives the 
webcasters and copyright holders the freedom to continue the 
negotiation process.
  Without this legislation, negotiation could not continue, and all 
parties would be bound by the CRB decision.
  Mr. Speaker, this is likely to be the last time I address the House, 
at least for some time, and I would like to take a moment to thank the 
Judiciary Committee staff, and the majority staff, and minority staff, 
for their tireless work, and for the floor staff of both the majority 
and minority parties who have been amazingly good at keeping things 
moving here.
  Finally, I would like to thank our wonderful clerical staff who keep 
things moving and have made this such a pleasant and wonderful place to 
do business. I think I should also like to add thanks to our security 
for the floor for the wonderful support they have been.
  Mr. BERMAN. I have great admiration and respect for the previous 
speaker, Mr. Cannon, who will be moving on from this body soon.
  Mr. Speaker, I want to recognize a key person in all of this process 
on webcasting rates, a member of our subcommittee, a very active member 
of our subcommittee, the gentlelady from California, for as much time 
as she may consume.
  Ms. ZOE LOFGREN of California. Mr. Speaker, I rise in support of the 
Webcaster Settlement Act. Since the Copyright Royalty Board announced 
its decision dramatically increasing royalty rates for webcasters, 
Internet radio has really been in serious jeopardy. In some cases, fees 
under the ruling actually exceeded the revenue, obviously a business 
model that is impossible to sustain.
  Because the demise of Internet radio is absolutely in no one's 
interest, not in the stakeholders, Members of Congress have worked very 
hard to reach a negotiated compromise that would supersede the CRB 
decision and preserve the continued viability of Internet radio.
  I particularly want to commend Representative Berman for his work in 
bringing the parties together. They were very far apart, and his 
personal attention to this has been a key element for this progress.
  This act buys some time for the negotiations to continue, removes the 
statutory impediment to implementation of a negotiated compromise, and 
I am very hopeful that we will achieve what we wish.
  The alternative to this legislation would be a court-imposed solution 
that would drive many of the newest and most promising innovators like 
Pandora, located in Alameda County, out of the marketplace. It's not 
just the providers of content, it's the American public, indeed the 
world, that is able to use the digital world for access to content. We 
don't want, any of us, to stand in the way of that.
  I just want to take a minute here, because this may be the last time 
that I have an opportunity to work on a bill on this floor with 
Congressman Cannon, who will not be returning to the 111th Congress.
  I just want to say, if you look at Congressman Cannon's record and 
mine, you will find very different records, one of the most 
conservative Members of Congress, and I am not.
  But I will say that working with Congressman Cannon is a tremendous 
honor, because he is a very smart guy and he is very focused. There are 
never any games working with him. It's always what can he see that's in 
the public's interest. When you can work with someone like that, even 
though it's a conservative and a nonconservative, you can make 
progress.
  It's just been an honor to work with Congressman Cannon. He has 
served his district, his State and his country with tremendous 
distinction. I just want to thank him for all he has done. I know he 
will have many other things to contribute in the private sector, but 
it's really been an honor to work with him.
  Mr. SMITH of Texas. I too want to thank the gentleman from Utah (Mr. 
Cannon), my colleague on the Judiciary Committee, for his service to 
this institution and to our country.
  Chris Cannon has served, while he has been on the Judiciary 
Committee, both as the chairman of the Commercial and Administrative 
Law Subcommittee, and as ranking member, a position he holds right now.
  The gentleman from Utah has brought to that position an incredible 
knowledge and expertise and commitment to so many issues that impacts 
so many Americans in this country today.
  He has, in my judgment, that rare blend of a sense of humor and a 
seriousness of purpose that make him an ideal Member of Congress. Those 
talents and those skills and his dedication to Congress and to our 
country will be missed, but we look forward to staying in touch with 
him and wish him well in his next adventure.
  Mr. Speaker, I yield back the balance of my time.
  Mr. BERMAN. I am pleased to yield again to the sponsor of this bill 
an additional minute.
  Mr. INSLEE. Mr. Speaker, I do also want to express my great respect 
for the previous speaker, Representative Cannon. He is a fellow of such 
great heart and cheerful countenance, it has been a pleasure to serve 
with him. He and I now belong or shortly will belong to an elite group. 
He will be joining the Former Members of Congress. I am also a member 
of the Former Members of Congress.
  I just want to relate to him that many of us who are not serving at 
one time, it is a respectful and honorable position to be in. I want 
his family to know how much we respect his service. We know he is going 
to go on to do great things for his community and his family.
  Congressman, I would like to tell you how much we respect you. Hope 
you come by and say hello on occasion. Congratulations.
  Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
  I just want to take a moment, the irony of both Mr. Smith and Mr. 
Cannon being on the floor at the same time. For so many years, I was on 
Ethics Committee with Mr. Smith as chairman during a big part of that 
time, on the Immigration Committee with Mr. Smith being chairman for a 
part of that time, and on Intellectual Property, when Mr. Smith was 
chairman for a serious part of that time.
  I hate to say this in front of the ranking member of the Judiciary 
Committee, but with the gentleman from Utah, with whom I worked so 
closely on so many different aspects of the immigration issue, I will 
sorely miss you.
  We didn't agree as much on all the intellectual property issues as we 
did on the immigration issues. But the other side of the coin is, I 
didn't agree with the ranking member of Judiciary on the immigration 
issues as much as I did on the intellectual property issues.
  But in both cases it has really been a delight to work with both of 
you, and particularly you, Mr. Cannon, because at least for now you 
won't be back here next year. I will miss both your person and your 
work on these issues, and we shall prevail.
  Mr. CANNON. Would the gentleman yield?
  Mr. BERMAN. I do.
  Mr. CANNON. This is an amazing, actually, pass. Mr. Inslee and I, of 
course, have worked on the Natural Resources Committee together and 
differed sharply on many issues, but never unpleasantly.
  This is an amazing pass where people of such divergent views are 
together on the same issue. It's a nice send-off. I appreciate your 
kind comments and those of the gentlelady from California and the 
gentleman from Washington and the gentleman from Texas.
  Mr. BERMAN. Mr. Speaker, in closing, I just want to say that we have 
before us legislation that is supported by the DMA association, the 
Digital Media Association and the Sound Exchange, the collection 
agency, as well as their component memberships, including the labels, 
the performers, the musicians, the backup singers, National Public 
Radio, the small

[[Page 22835]]

webcasters. I should report, based on the conversations and an 
amendment that extends till February 15 the deadline, this bill does 
not have the opposition of the National Association of Broadcasters.
  Mr. Speaker, I would like to make clear that no provision of H.R. 
7084 should be construed to opine on what entity or entities can be 
considered a ``receiving agent'' under 17 U.S.C. Section 114(g)(4). I 
understand that there is ongoing litigation pertaining to the 
qualifications of a receiving agent and I would not want H.R. 7084 to 
influence a court's ultimate decision on this matter.
  Mrs. BLACKBURN. Mr. Speaker, I rise in support of the Webcaster 
Settlement Act of 2008, and want to thank the gentleman from Washington 
for his leadership in bringing this resolution to the floor.
  H.R. 7084 is a simple yet critical legislative solution that allows 
private sector actors to keep a negotiating process alive. Why? Because 
Internet radio royalties operate under a government license, and 
Congressional approval is necessary to allow a private sector agreement 
to effectuate outside the government process.
  This is a good thing. After all, if I have a choice between a 
government mandated solution and a private sector agreement, I will 
take the private sector agreement almost every time.
  The Webcaster Settlement Act of 2008 guarantees that our nation's 
performing artists, musicians, record labels and webcasters can 
continue copyright negotiations that are making slow but steady 
progress. And a resolution to the issue is critical, so Internet radio 
listeners can keep on listening and the people performing those songs 
can be properly compensated.
  The Copyright Royalty Board is small government body tasked with 
determining royalty rates for the use of music over Internet radio. It 
is obscure to some, but its decisions are critical to my constituents 
in Tennessee and Internet radio users across the country. 
Unfortunately, this body was tasked with the authority to adjudicate a 
rate structure at the direction of Congress back in 2004. This proved 
to be unwise, since the Board's decision announced in March of 2007 
sparked a lengthy lobbying battle and an acrimonious relationship 
between two important members of the music industry's family; the 
copyright holder and the copyright deliverer.
  We now understand that the parties are gradually coming together, and 
growing closer to finding common ground. Congress should do everything 
in its power to ensure the negotiations continue, and H.R. 7084 is the 
vehicle to guarantee the talks will continue.
  I urge my colleagues to support it, and yield the balance of my time.
  Mr. BERMAN. I urge the passage of H.R. 7084 and yield back the 
balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Berman) that the House suspend the rules 
and pass the bill, H.R. 7084, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________