House panel OKs digital licensing bill

Critics say complex copyright proposal could erode fair use rights and set a precedent that threatens devices like TiVo.

A U.S. House of Representatives panel on Thursday approved a digital copyright bill that critics say could imperil home-use copying of music and video recording devices like TiVo.

The Section 115 Reform Act, or SIRA, introduced by Texas Republican Lamar Smith, attempts to overhaul a piece of copyright law that established a complex system of "mechanical royalties" for record companies, recording artists, songwriters and publishers in exchange for the right to reproduce and distribute their music.

There's a general consensus among politicians, the U.S. Copyright Office and the music industry that the law, first written in the era of piano music rolls , is in need of updates for a digital era. Right now, companies wishing to sell music have to negotiate separate licenses for each song's recording.

SIRA proposes establishing a "blanket licensing" system in which those entities would apply for and receive licenses through a one-stop shop. Established by the Copyright Office, that body would act as a representative for music publishing companies with the greatest share of the market.

Supporters of the bill argue that such an approach would make it easier for online music services to secure speedier approval for vast libraries of music, opening up the possibility for new market entrants, greater selection and lower prices.

"We now have the ability to give legal services the tools to compete with and hopefully drive illegal music services out of business," said California Democrat Howard Berman, a co-sponsor of the bill.

In a joint statement, the Recording Industry Association of America, the Digital Media Association and the National Music Publishers Association said they had "much to gain" from the legislation but still hadn't reached "complete agreement on all aspects" of it. An RIAA representative contacted by CNET News.com would not elaborate on those concerns.

Others, including two Democrats who reluctantly agreed to approve the bill on Thursday, have aired louder gripes about the current language. The Electronic Frontier Foundation, for its part, encouraged its visitors to call their elected representatives and make their dissatisfaction known.

In a three-page letter (click for PDF) this week to the bill's authors, a coalition of 19 consumer-oriented advocacy groups and companies--including the American Association of Law Libraries, BellSouth, the Consumer Electronics Association, Public Knowledge, RadioShack, and Sirius and XM satellite radio--claimed the proposal poses a threat to fair use.

Under copyright law, separate licenses exist for the "performance" of a song and for the reproduction or distribution of it. The consumer groups argued that the bill views digital recordings as falling into both categories, which could lead to "potentially duplicative fees" by forcing sellers to pay more than once for the same content. Those fees, some contend, would have to be passed on to consumers.

And by viewing digital music in such a light, they argued, Congress could open the door for requiring licenses for reproductions in other areas, ranging from time-shift recordings on VCRs or TiVos to analog cassettes or CDs recorded from the radio. Such a development could lead to a dangerous erosion in fair use rights, which permit consumers to copy copyrighted material without permission for noncommercial purposes.

The groups also charged that the bill would, for the first time, require licenses for every cache, buffer and other "incidental" copy of a song. "There is no basis for giving copyright owners added control because of incidental copies that have no independent economic value apart from the performance itself," the letter said.

Granted, the bill provides that such a license would be "royalty-free"--that is, of no cost to the user. But the better approach would be to exempt those incidental copies entirely from the licensing regime, said Rep. Rick Boucher, a Virginia Democrat who added that he'd vote for the bill Thursday with the understanding that a number of changes would be made. Before the vote, Boucher gave remarks that essentially echoed the consumer groups' concerns.

Smith said he would be open to discussing the suggested changes "as soon as next week, if possible."

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