e.Digital Corporation (fka EDIG)

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Jeez - Another 180 days, When will it end.

Web Music Fight Plays Out in D.C.
By Andrew Osterman

2:00 a.m. July 31, 2001 PDT


WASHINGTON -- The U.S. government is about to dramatically alter the
business of
streaming audio on the Internet by deciding how much the recording
industry should be
paid each time someone listens to a song.

On Monday, the Copyright Office convened a long-awaited series of
hearings to set a
standard fee that webcasters must pay to the copyright owners of
songs. A panel will hear
testimony for the next 180 days, and the recommendations most likely
will be incorporated
into the eventual decision of the Copyright Office.







This Byzantine, bureaucratic process will end in an agreement that
will determine, among
other things, whether advertising-supported online music sites can be
profitable or not.

Robert Garrett, a lawyer representing the Recording Industry
Association of America,
proposed two different licensing schemes on Monday.

The first would be a flat 15 percent of all revenue generated by the
playing of copyrighted
material, and the second would be a per-song, per-listener fee of
$0.004. That's some 30
times as much as webcasters are hoping to pay.

"We don't have control over how our products are used, but we do have
the right to
compensation," Garrett said.

Part of Monday's hearing was closed to the public because the topic
was the financial
agreements the RIAA has already made with a small number of
webcasters.

In February, the Copyright Office asked the groups to voluntarily
determine a reasonable
rate for the webcasting of copyrighted material. Both sides proposed
their respective rates
-- but couldn't reach a compromise.

Currently, webcasters do not have to pay an industry-wide standard
rate, although 26
have inked individual agreements with the RIAA.

A Copyright Arbitration Royalty Panel, the group that began meeting
Monday, establishes a
compulsory license fee by guessing at the rates and terms that might
have been
negotiated by a willing buyer and willing seller in a free market.
These fees and terms
represent what all copyright users must pay for every song,
regardless of who owns the
rights.

The most common example of this is radio stations, which don't have
to negotiate with
every record company for every song they play. They simply check with
the Copyright
Office for the license fee, cut the check, and mail it to the
appropriate person.
The government's involvement in
the current controversy began
in 1995, when Congress enacted
the Digital Performance Right in
Sound Recordings Act "to ensure
that recording artists and record
companies will be protected and
to create fair and efficient
licensing mechanisms." It
required a license fee for
subscription webcasts.

According to the Copyright
Office, Congress "did not
understand how
non-subscription services were
utilizing the Internet to bring
music to the public or how to
license such enterprises."

The DPRA left a large loophole through which radio stations that
simultaneously webcast
their broadcasts were wiggling.

Three years later, Congress used the now-infamous Digital Millennium
Copyright Act to
amend the copyright law to include all digital transmissions. This
closed the loophole and
brought the National Association of Broadcasters (NAB) into the fray.

Whichever plan is approved by U.S. regulators will be retroactive to
October 1998, when
the Digital Millennium Copyright Act took effect.

In March 2000, the NAB tried to have most simultaneous transmissions
of radio broadcasts
via the Internet by FCC-licensed broadcasters exempted from the
licensing requirement by
saying that there was no difference how such transmissions were made.

This attempt failed and set the stage for the conflict between the
webcasters -- now
including webcasting services and streamed broadcasters -- and the
copyright owners.

http://www.wired.com/news/politics/0,1283,45703-2,00.html