In a draft bill seen by CNET News.com, key legislators propose limiting Americans' rights related to copying music or transferring files.
At the same time, the draft legislation seen by CNET News.com would place the struggling Webcasting industry on firmer legal footing.
Two key House legislators wrote the double-edged proposal in consultation with the Library of Congress' Copyright Office. They appear likely to introduce it this month.
The creation of the two-part draft comes as politicians and judges are grappling with the slippery mix of high-speed Net access, digital content, and the popularity of file-swapping networks. Last week, record labels hinted they might broaden their legal fusillade to encompass lawsuits against individuals.
Reps. Howard Coble of North Carolina and Howard Berman of California, who authored the draft, say their proposed changes to copyright law follow suggestions made last August by the Copyright Office.
"The Copyright Office recommended that Congress amend the Copyright Act," the two politicians wrote in a five-page letter sent last month to members of the subcommittee that oversees intellectual property. Coble is the Republican chairman of the panel, and Berman, who announced plans last month for an unrelated bill assailing peer-to-peer networks, is the senior Democrat.
The first part of their proposal, which would limit backup copies, has already drawn objections from academics and nonprofit groups that have reviewed it.
Under current copyright law, Americans who record a TV program or radio segment generally may "sell or otherwise dispose of" that analog recording or digital file as they wish.
The proposed bill would end that exemption, handing copyright owners substantial new control over the distribution of their works by curtailing copying rights granted to consumers under a doctrine known as "fair use."
"If you were to take today's episode of 'E.R.' and tape it and give it to your mother, it would be copyright infringement under this bill," said Jessica Litman, a professor at Wayne State University who specializes in copyright law.
A less incendiary section of the draft would give a minor boost to Webcasters by saying they're off the hook for temporary copies, called cached or buffered copies, made while streaming music to listeners. To qualify, a Webcaster must be licensed by an agency such as ASCAP and must ink an agreement with the record labels.
According to the draft bill, such Webcasting "is not an infringement of copyright"--if temporary copies are made only to facilitate music distribution and if the copies are stored only for a time that's necessary for the broadcast.
Critics of the measure said it would address a significant issue in how copyright law is applied to Webcasting. They noted, however, that it leaves some loopholes and ignores more pressing licensing issues threatening the industry, such as a recently proposed royalty scheme that some Net radio broadcasters say will put them out of business.
"Exempting Webcasters' buffer copies from royalty obligations (is) the right thing to do--but almost meaningless given that, absent quick congressional action, the royalty scheme recently adopted by the Library of Congress will shut down most Webcasters the day it takes effect," said Philip Corwin, a lobbyist at Butera and Andrews representing Sharman Networks, which distributes the Kazaa file-sharing software.
Last month, the Librarian of Congress set royalty fees for Web radio companies, ruling they would pay 0.07 cent, or about a 14th of a cent, for each song played for a single listener. Many Webcasters have said the rates are prohibitively high.
Slow to take sides
In an unusual twist, Coble and Berman stressed in their letter to colleagues that their authorship of the draft bill does not necessarily "constitute an endorsement of its contents." Rep. John Conyers of Michigan, the top Democrat on the full Judiciary committee, also helped in the creation and included the same unusual disclaimer.
Spokeswoman Gene Smith said Thursday that Berman opposes the bill and drafted it only at the request of House Judiciary Committee Chairman James Sensenbrenner, R-Wis.
"Part of it exempts buffer copies," Smith said. "Howard thinks there has been no demonstrated need for that. It's not a demonstrated problem.
"The biggest impediment to more licensed, lawful services online is piracy, and that's why he is pushing his peer-to-peer bill," Smith said. Berman represents California's San Fernando Valley, adjacent to Los Angeles and Hollywood's cluster of entertainment companies.
Last month, Berman said he would introduce a bill to let copyright owners, such as record labels or movie studios, launch technological attacks against file-swapping networks, where their wares are illegally traded. He plans to introduce it next week.
Coble's office declined to comment on the substance of the draft bill.
"We're awaiting the responses from the subcommittee members," a spokesman for Coble said.
The origin of the joint proposal lies in the 1998 Digital Millennium Copyright Act (DMCA). Part of that controversial law, which has been the subject of high-visibility court challenges and led to the prosecution of Russian programmer Dmitry Sklyarov, required the Copyright Office and the Commerce Department to report on how effective key portions of the DMCA have been.
In its analysis, the Commerce Department made no proposals to amend the DMCA. But the Copyright Office did in its report released last August.
In March, the House Judiciary committee asked for public comments based on the Copyright Office's recommendation. The panel's announcement said, "We are initiating a process to review relevant digital music issues and related proposals to amend the Copyright Act that have been brought or will be brought to our attention."
Curtailing fair use
One impetus for the draft bill, which remains untitled, could be to derail a more comprehensive bill favored by Webcasters called the Music Online Competition Act. It's co-authored by Rep. Rick Boucher, D-Va., who has vowed to oppose some of the more dramatic attempts by the music industry to tighten copyright laws.
Some of the same opponents appear poised to offer a lukewarm endorsement of the Webcasting measure in the draft bill, while denouncing the limits on fair-use rights.
R. Polk Wagner, who teaches intellectual property law at the University of Pennsylvania, says the proposal has "the potential to cut back fair use rather substantially."
"Let's say I obtained a copyrighted work under fair use, say a photo of Mickey Mouse," Wagner said. "If I wanted to discuss, criticize or share that work, I need to interact with other people. Yet section one of the draft bill quite clearly says I have no rights to distribute the work, which would seem to rather severely limit my use. In the digital era, interaction takes place by transferring and copying files."
Fred von Lohmann, an attorney with the Electronic Frontier Foundation, went further in his criticism.
"The Berman-Coble change would arguably make it illegal for me to swap my iPod with a friend for a week, something I recently did," von Lohmann said. "Who knows what cool stuff might have thrived in this niche exception, but for (this proposed) change?"