Capitol Hill politicians supportive of getting tunes flowing on the Internet are expected to push legislation Thursday ordering music companies to offer the same price when cutting various deals with Web denizens.
Rep. Rick Boucher (D-Va.), whose home state includes tech giant AOL Time Warner, is slated to hold an early morning press conference detailing the bill, which is being co-sponsored by Rep. Christopher Cannon (R-Utah).
The recording industry is expected to launch a massive counteroffensive once the measure is presented in final form. Music execs said it is ridiculous to make a company cut a deal with one venture then have to attach the same pricetag to subsequent deals.
“A protracted legislative fight will not move us closer to where the music industry wants to be – delivering music to fans through a variety of different, innovative Web sites,” said Recording Industry Assn. of America president-CEO Hilary Rosen. “Unfortunately, the Cannon-Boucher bill introduced today will divert time, energy and resources from achieving that goal. It is essentially a solution – a very bad solution – in search of a problem.”
Boucher and Cannon could not be reached for comment late Thursday.
A longtime advocate of the Internet, Boucher has long maintained that the major labels are holding up the advent of Web ventures, such as MP3.com or even Napster, so that they can maintain a lockhold on this budding, and potentially lucrative, business.
The Boucher-Cannon bill also would loosen copyright laws to help legitimate, Net-based music services get up and running without the threat of being shut down by the courts for infringement.
Capitol Hill observers cautioned that the bill was still being altered Thursday, meaning no one had seen the final version. But Cannon and Boucher are likely to frame their legislation as facilitating competition.
Recording industry execs, as well as other Capitol Hill observers, said such legislation faces little chance of passing, particularly because of the provision requiring music companies to offer the same deal at the same price to one and all.
“This can’t pass a Republican Congress. I haven’t seen this much bureaucracy since I read Clinton’s health plan,” one Capitol Hill veteran said.
Rosen said it is wrong to substitute government regulation for the marketplace, and inconsistent with the views of experts that government regulation of the Internet would be a disastrous mistake.
On another front in the drive to bring music to the Internet, a federal judge has upheld a new copyright rule requiring broadcasters and Webcasters to pay royalties for music streamed on the Internet.
This is a different battle from the one being fought over interactive Internet music services addressed in the Boucher and Cannon legislation.
Broadcasters have fought the U.S. Copyright Office tooth and nail over the rule, which they say unravels years of tradition. Historically, broadcasters have not had to pay such royalties for music aired on the radio, and say the Internet should be considered the same as AM and FM radio.
No go, said the U.S. District Court for the Eastern District of Pennsylvania in upholding the Copyright Office, and tangentially, the Recording Industry Assn. of America. Rosen applauded the Pennsylvania court’s decision.
“Broadcasters, record companies and consumers have long enjoyed a symbiotic relationship whereby airplay on radio stations benefits all parties, along with generating enormous revenues for the record labels,” National Assn. of Broadcasters president-CEO Edward Fritts said. “We’re disappointed that this unique relationship will be disrupted by the court ruling.”
Coincidentally, the rate of the new royalty for Webcasting is presently being deliberated by a three-member arbitration panel appointed by the Copyright Office. The proceedings opened this week, with Netcasters facing off with record labels and artists.