The Future of Music Coalition’s Statement
prepared for the Copyright Office Roundtable
May 10, 2002

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The Future of Music Coalition was formed over two years ago to serve as a voice for artists in the emerging, and often contentious, debates over how technology will reshape the music industry.

Our main organizing principle is that the established music industry structures often do not serve musicians or citizens, but rather corporate interests. Another organizing principle is that these debates around technology rarely, if ever, present black and white solutions.

The issues that bring us together today fit squarely in the gray category. But maybe it’s appropriate to say it’s a lighter shade of gray than many recognize. Due to the diligent work of the Copyright Office, especially in convening this panel today, the remarkable energy of the webcasting community, and the willingness of the record industry to pursue reasonable solutions, the Future of Music Coalition is quite optimistic that realistic negotiated settlements to these concerns are both possible and likely.

We are preparing somewhat lengthy testimony that will be submitted early next week to the Senate Judiciary Committee that goes into our views regarding webcasting in more detail. That being said, our core beliefs in these debates are as follows:

1. Establishment of Alternative Licensing Structures

It is critical to recognize that there is no single definition of a “webcaster”. Rather, we believe it is possible to place most, if not all, webcasters into one of four classes:

a. Corporate webcasters
b. Small entrepreneur webcasters
c. Non-commercial and community broadcasters
d. Hobbyist webcasters

Each of these classes webcast for different reasons and according to different models. As a result, these distinctions need to be taken into account both in terms of rates and reporting requirements, just as they are on the terrestrial bandwidth.

Do large corporations need to pay at a rate that recognizes the value of artistic labor? Absolutely. Does it help artists or music fans if new models of webcasting are unable to develop because webcasters are forced to work under one-size-fits-all rates and reporting requirements? Of course not. Those are the black and white choices, and we believe musicians should not be forced to choose between essentials. Exposure and compensation are the bread and water of our constituency and no one can survive on only bread or water. In other words, working musicians should not be asked to choose between, on one hand, the broadest possible exposure through webcasting and, on the other hand, a fair royalty rate.

The Future of Music Coalition believes there is enough common ground to create commercial, non-commercial, incubator and hobbyist licenses, each with distinct rates and reporting requirements. Terrestrial bandwidth, with its tradition of graded licensing rates, stands as a good model from which to start this work. We hope that, with the installation of a graded licensing and reporting system, we would create a workable solution that both allows for webcasting on all levels to thrive, while also building new revenue streams for musicians.

2. Reasonable Reporting Requirements and the Automation of Reporting

It is vitally important for all classes of webcasters to document, to the extent that they are reasonably able, the music they choose to play. At the same time, it is important that the administrative burden placed on webcasters not be out of synch with the realities of their staffing and revenue situations. In the short term, smaller and noncommercial webcasters should have to report data that is sufficient to uniquely identify the songs played so that artists and songwriters can be fairly compensated. In the long term, the FMC believes the best remedy is a publicly held authentication database that would reduce reporting requirements to several clicks of a mouse.

3. Elimination of Ephemeral Copy Logs

Simply put, the Future of Music Coalition calls the elimination the requirements to report ephemeral logs. We fail to grasp the logic of forcing webcasters to engage in a never-ending, and possibly technically unfeasible, process of destroying then rebuilding something that is simply part of the process of webcasting music. As always, we are eager to be educated if we are missing the boat, but this requirement seems without merit.

4. Removal of the Requirement to Report under the Penalty of Perjury

Given the concerns stated above about the potential impracticality of certain reporting requirements, and given the reality that any new process like this will take time to become standardized, it seems unduly harsh to require webcasters to sign their log sheets under the penalty of perjury. This is an overly punitive approach to a fairly basic challenge – a challenge that has been addressed by decades of policy precedents in other federal agencies. When a citizen submits information to the federal government in an official proceeding, it is done with the understanding that the information that is being supplied is truthful to the best of the citizen’s knowledge. The FMC urges the Copyright Office to eliminate requirement to file under the penalty of perjury.

The FMC recognizes that today’s Roundtable is the first step in a reformation process. In order for licensing rates and reporting requirements to be scaled to meet the realities of different classes of webcasters, there will need to be further discussions between various parties to first distinguish the four classes of webcasters and then come up with rates and requirements that are in line with their unique characteristics. The FMC is more than willing to take part in these discussions if it ensures that webcasting can continue to offer diverse and creative programming to the public, and serve as an new revenue stream for musicians. We’re particularly interested in any steps that can be taken to encourage cooperation between the opposing parties. Just three weeks ago the FMC drafted a CARP fact sheet that explained the CARP process and the issues regarding rates and reporting requirements, and we pledge to do anything to continue to disseminate information to the public.

Again, we applaud the Copyright Office for holding this important forum and look forward to contributing as we can to this ongoing discussion.

Respectfully submitted,

Jenny Toomey. Executive Director
Michael Bracy, Director of Government Relations
Walter McDonough, Esq., General Counsel
Kristin Thomson, Research Director
Brian Zisk, Technologies Director

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