Be one of over 500 musicians, lawyers, academics, policymakers, technologists and citizens gathering in Washington, DC, September 11-13, 2005 for our fifth annual Future of Music Policy Summit, where some of the most contentious issues at the intersection of music, law, technology and policy will be discussed.

Co-presented by FMC, MICPEL and the Entertainment and Sports Law Committee of the Maryland State Bar Association, the Policy Summit includes twelve panels and over a dozen breakout sessions that go beyond the typical conference fare, digging into the complex problems and challenges that crop up as emerging technologies meet traditional music industry structures, federal legislation and copyright law. Panel topics range from whether digital distribution is good for artists, to the licensing challenges associated with sampling, to intellectual property matters post-Grokster. Schedule here.

Easy and Secure Online Registration

Summit Sponsors

ASCAP ∗ Microsoft ∗ Recording Artists’ Coalition ∗ BMI ∗ American Federation of Musicians ∗ CD Baby ∗ SESAC ∗ IODA ∗ The Recording Academy ∗ Public Knowledge ∗ EFF ∗ Epiphone Guitars ∗ KEXP-FM Seattle ∗ Indie-Music.com ∗ Just Plain Folks ∗ Starpolish

Confirmed panelists and speakers include

Senator Maria Cantwell (D-WA)
FCC Commissioner Jonathan Adelstein
Marybeth Peters, Register, U.S. Copyright Office
Matthew Shipp, ASCAP artist, avant-garde jazz pianist
Joe Henry, ASCAP artist, songwriter/producer
Don Verrilli, Partner, Jenner & Block
Bertis Downs, Manager and General Counsel, REM
Shawn Fanning, Co-founder, Snocap
Fred von Lohmann, Senior Staff Attorney, Electronic Frontier Foundation
Melissa Ferrick, Artist/Right On Records
Ali Partovi, CEO, Garageband.com
Michael Geist, Internet & E-commerce Law, University of Ottawa
Don Rose, Acting President, A2IM
Kevin Arnold, Founder/CEO, IODA
Rebecca Greenberg, Executive Director, Recording Artists’ Coalition
Heather Hitchens, President, Meet the Composer
Suzan Jenkins, President, Jazz Alliance International
Mike Mills, Bass player, REM
Hank Shocklee, Music Industry Executive, Producer, Founder of Public Enemy
Derek Sivers, President and Programmer, CD Baby
Brian Austin Whitney, Founder, Just Plain Folks
Jim Urie, President, Universal Music & Video Distribution
D.A. Sonneborn, Ph.D. Assistant Director, Smithsonian Folkways Recordings

…and at least 40 more stellar panelists.

CLE Credit Available for Attorneys: Through our partnership with MICPEL and Maryland State Bar Association, attorneys are able to receive continuing legal education (CLE) credits for attendance (pending Bar approval). Go to website for details.

200 Scholarships for Working Musicians: We want the room to be packed with the folks who are most directly affected by these changes in technology and policy – musicians and songwriters themselves. Thanks to contributions from sponsors, we’re able to again offer musicians’ scholarships, which waive the registration fee. Apply online

Special Hotel Rates: Reserve a hotel room at GWU Inn at a special rate of $166 if you book by Thursday, August 18. Call 1-800-426-4455 and reference block 4463. Rooms in this block are nearly sold out and there is a major patriotic event happening in DC at the same time, so book your hotel rooms now.

Become a Summit Sponsor! We have a sponsorship level to suit your needs. Please contact us at 202-518-4117 or caroline [at] futureofmusic [dot] org.

Our Policy Summits help the media, citizens, creators and policymakers have a more sophisticated understanding of the opportunities and effects of new technologies on guarding the value of music for musicians, and guarding access to music for citizens. We hope to see you in September for what’s shaping up to be the best Summit yet.

On July 25, New York State Attorney General Eliot Spitzer announced that Sony BMG agreed to a $10 million settlement for its role in radio payola practices. You may recall from our December 2004 newsletter that a wave of big record labels were publicly denouncing their relationships with independent promoters in the wake of being subpoenaed by AG Spitzer.

FMC applauds Mr. Spitzer’s investigation into payola, which uncovered more than just a de facto form of payola practiced through record labels’ use of “indie promoters” who have exclusive relationships with certain radio stations. Emails between radio station and record label representatives included in Spitzer’s announcement indicated financial transactions, rigged contests and elaborate gifts — each used to ensure airtime for recognizable artists. You can read them for yourself here. Scroll down to bottom of press release and read “Sony Correspondence”

We all know that commercial radio play is tough to get, but that it’s also essential if a musician is to sell the hundreds of thousands of records to be considered a “success” by major label standards. This dynamic forces musicians to sign inequitable contracts with major labels as a precursor to potential airplay. The damaging effects of this practice go far beyond its illegal nature. These practices also leave no space for independent artists on the public airwaves. It has hurt mom and pop record shops, small club owners, independent record labels, musicians, and radio itself.

From the earliest days of FMC’s formation we have worked to expose this practice that has made radio airplay even more elusive. We have spoken on the Hill, at the FCC, the Department of Justice and the Federal Trade Commission. We’ve built coalitions with other musicians’ organizations to strengthen our voice. We have delivered statements to the FCC and Congress that have made the connections between media consolidation, localism and payola.

On August 9, the Federal Communications Commission announced it would investigate Sony BMG’s payola settlement. If it finds anyone involved broke the FCC’s payola regulations, the record label may face additional stiff fines. FMC will continue to work with other musicians’ organizations on this issue and report back on our continued progress. Expect this to be a hot panel topic at the Policy Summit:

FMC’s Radio Study

FMC’s 2003 Joint Statement on Current Issues in Radio to FCC and Congress

FMC’s December 2004 Newsletter #37

FCC Plans Payola Investigation

Radio Daze
Give Eliot Spitzer some credit. Though anyone remotely connected to the music business knew illegal payola was rampant in radio, New York State’s attorney general took a rare step into the spotlight last month and pointed it out in withering, embarrassing detail.
By Peter Kafka, Forbes.com, August 9, 2005

Because of unprecedented support for LPFM in Congress and at the FCC, long-fought-for efforts to expand LPFM stations into more populated areas may soon be a reality. Here’s a rundown of recent activities:

∗ Senate ∗
On February 8 – the 5th birthday of the creation of the LPFM license – Senators John McCain (R-AZ), Patrick Leahy (D-VT) and Maria Cantwell (D-WA) introduced SB 312, the Local Community Radio Act of 2005. While there are over 600 LPFM stations operational in the US, they are mostly found in rural areas where the radio spectrum is less congested. FCC rules currently require inordinately large swaths of spectrum between LPFM and full-power stations. If passed, this bill would repeal excessive interference protections and give thousands of communities the opportunity to acquire an LPFM license.

∗ House of Representatives ∗
On June 9, the Indigo Girls performed on Capitol Hill in support of Rep. Louise Slaughter’s (D-NY) introduction of a companion version of the Local Community Radio Act of 2005 in the House. Rep. Slaughter announced the bill, which has bipartisan support, in front of a crowd of lawmakers and staffers including Rep. Mary Bono (R-CA) and Rep. Schakowsky (D-IL). Stay tuned for an announcement of the official introduction of this bill in the House.

∗ FCC ∗
On July 7, the FCC released a Notice of Proposed Rulemaking asking the public to weigh in on the future of LPFM radio service. The current regulatory rules affecting LPFM deprive urban communities across the country from access to local radio. The FCC is now considering these original rules and in order to make good decisions, they need to hear from you.

Here’s where you can fill out a comment online.

Comments are due on August 22nd. Reply comments due September 6th. Want to know how else you can engage? We’re doing a breakout session with representatives from Prometheus Radio Project, Free Press, Common Cause and others at the Policy Summit.

Low Power Stations Imperiled as Giants Gobble Up Frequencies
Slaughter championed LPFM alongside the band the Indigo Girls, who said they were concerned about the loss of community-oriented broadcasting.
By Josh Sanborn, Cox News Service, Atlanta Journal Constitution, June 14, 2005

Indigos, Lawmakers Link for LPFM Legislation
The Indigo Girls, Amy Ray and Emily Saliers, performed to a packed room of about 150 congressional lawmakers, staffers and interest group representatives, gathered to hear the artists and to learn more about proposed legislation designed to expand Low Power FM’s reach across the country and to elevate the broadcast service’s status.
By Tony Sanders, Billboard Radio Monitor, June 9, 2005

On June 27, the Supreme Court announced two decisions about separate but interconnected issues that impact musicians and citizens. NCTA v Brand X impacts the basic architecture of the internet, while MGM v Grokster affects the applications that are offered to consumers using the internet.

These two decisions will have a significant effect on the FMC’s core interest: the transition of the existing music marketplace to a legitimate digital music economy that benefits musicians and consumers. 

FMC believes the Grokster ruling may have established an important middle ground position. In emphasizing that the liability lies with individuals and entities that encourage unauthorized distribution of creative works, the Court reinforced and upheld the Sony Betamax judgment, finding that technology itself is not at fault. Important questions remain about the more specific contours of the copyright-infringement inducement doctrine. As litigation proceeds, artists must be protected from infringement but also from the power of copyright aggregators who could exercise de facto control over future innovation. We are hopeful that this decision lays the groundwork for fostering both protection and innovation.

The Brand X case is more troubling. By supporting the FCC’s regulatory classification of cable modem services, the Supreme Court gave cable companies much more leeway in controlling both the applications and content that travels over their internet services. FMC remains watchful for attempts by both cable and phone companies to transform the internet into a proprietary high-speed network with industry as gatekeepers.

We believe the same dangers that artists experience with media consolidation could be replicated by concentrating control of the internet. Allowing tighter control of the broadband network architecture and facilitating increased influence for large copyright holders over the software developed for use on that network become even more significant policy concerns after these rulings.

FMC Press Release

We’re pleased to announce that key players in the MGM v. Grokster case will be joining us for a panel called “Intellectual Property Post-Grokster” at this year’s Summit. Jenner & Block’s Don Verrilli, who argued for the movie studios at the Supreme Court, will be joined by EFF’s Fred von Lohmann, RIAA president Cary Sherman, ASCAP’s Chris Amenita and Creative Commons Mia Garlick for what’s sure to be an informative discussion about emerging technologies and copyright law.

New File-Sharing Techniques Are Likely to Test Court Decision
Briefly buoyed by their Supreme Court victory on file sharing, Hollywood and the recording industry are on the verge of confronting more technically sophisticated opponents.
By John Markoff, NY Times, August 1, 2005

Net Losses?
The Federal Communications Commission (FCC) took a leap of faith last week when it slashed regulation of high-speed internet services.
Editorial, LA Times, August 10, 2005

Are you a musician? Do you need advice or information about health insurance? You’re not alone. A 2001 FMC survey of almost 3,000 musicians revealed that the complicated process of obtaining health insurance overwhelmed many of them.

FMC has teamed up with Alex Maiolo and Chris Stephenson to create HINT – the Health Insurance Navigation Tool. The goal of this project is to provide informed, rocker-friendly support and advice to curious musicians who need information about health insurance, for free.

The process is simple. Send a health insurance related question via hint [at] futureofmusic [dot] org (email) to hint [at] futureofmusic [dot] org, and Alex or Chris will call you back to discuss your insurance needs.

All calls will be confidential. FMC will collect summary data on the insurance needs of musicians so that we will better understand how to effectively work towards providing health insurance for artists in the future.

We see this project as a safety net for those musicians who remain uninsured because of lack of support and clear information. Those musicians who reach out for help will get it. With this small step we hope to bridge the gap between confusion and need. 

Watch for the official unveiling of the full-service HINT website very soon.

You can also visit Alex at our FMC Policy Summit!

On May 9, FMC participated in the official rollout of the Media Bill of Rights at the National Press Club. Over 175 organizations representing 20 million American citizens came together to endorse this document, designed as proactive statement articulating citizens’ rights to a free, fair and diverse media. With a rewrite of the 1996 Telecommunications Act in Congress’ sights, this document is designed to provide legislators with a citizen-based roadmap, and ensure that citizens have a seat at the policymaking table.

Here’s an excerpt from the preamble:
A free and vibrant media, full of diverse and competing voices, is the lifeblood of America’s democracy and culture, as well as an engine of growth for its economy. […] But too often, our nation’s policymakers favor media conglomerates’ commercial interests over the public’s Constitutional rights, placing America’s democracy, culture, and economy at risk. Instead, guided by the principles that follow, policymakers must ensure that the Constitutional rights of present and future generations to freely express themselves in the media, and to access the free expression of others, using the technologies of today and tomorrow, are always paramount. […]

The full text is here

The Media and Democracy Coalition grows larger by the day. Your organization can endorse the Media Bill of Rights by signing on here.

On June 13, the Supreme Court announced that it was denying requests for an appeal on the Prometheus vs. FCC case.

You had to be living under a rock to not know about what was happening at the FCC in 2003. The FCC revised media ownership rules to allow more consolidation. Prometheus Radio Project, an organization dedicated to facilitating the growth of LPFM service, then brought suit against the FCC claiming that these revised rules were irrational and against the public interest. The case made it to the Third Circuit Court of Appeals, where the court agreed with Prometheus. The Supreme Court then upheld the Third Circuit’s decision. The case is now remanded back to the FCC to rewrite the media ownership rules. Look for the FCC to begin crafting these new rules in late fall. There will be opportunities for public comment on them. We encourage you to remain engaged in opposing further radio deregulation.

Prometheus Press Release

Reactions Mixed to Supreme Court Denial
Reaction to the June 13 Supreme Court denial of an appeal from broadcasters and newspaper owners to review long-criticized new FCC ownership rules fell along predictable lines.
By Bill Holland, Billboard Radio Monitor, June 13, 2005
 http://billboardradiomonitor.com/radiomonitor/news/business/leg_reg/article_display.jsp?vnu_content_id=1000956400

U.S. High Court Declines Media Ownership Challenges
The U.S. Supreme Court on Monday declined to hear appeals by media companies challenging whether ownership restrictions are constitutional, leaving it up to U.S. regulators to decide the appropriate limits.
By Jeremy Pelofsky, Washington Post, June 13, 2005

On June 22, the Marybeth Peters, the Register of Copyrights testified before the House Subcommittee on Courts, the Internet, and Intellectual Property, suggesting the repeal of Section 115 of the Copyright Act. This is the section that establishes the mechanical compulsory license.

Most online digital music outlets must obtain public performance rights as well as mechanical rights in order have the flexibility to legally stream and/or digitally distribute recordings to the public. However, digital distributors find it inefficient and cumbersome to acquire two separate licenses from two separate organizations to pay the same copyright holder. Digital stores note that these complicated licensing issues create gaps in their catalog and inhibit the full development of online music services.

The US Copyright Office proposed changes to or the elimination of Section 115 to streamline the music licensing process. The June 22 testimony included a “discussion draft” of the “21st Century Music Licensing Reform Act”, which would repeal the section 115 compulsory license and consolidate the licensing duties of the PROs and the Harry Fox Agency (HFA) into one organization called a Music Rights Organization (MRO), which would have control over the licensing of both these rights.

Read the June 22 testimony

However, the June 22 testimony raises many questions. The public performance and reproduction/distribution are still two separate rights, and many people license these rights separately from one another. In addition, what would happen to the compulsory license that allows artists to record a “cover” song without prior licensing?

In July, Sen. Hatch (R-UT) held a similar hearing on Section 115 with a broad witness list that included representatives from the technology companies, songwriters, PROs, Harry Fox and record labels. There’s a good summary of this hearing here.

Sen. Hatch indicated that his hearing was the first of a number on this issue. We will continue to monitor this issue and report back. In addition, Our Policy Summit will include a breakout session specifically on Section 115.

In June, representatives from over 100 independent record labels gathered in New York City for the founding meeting of the American Association of Independent Music (A2IM). Modeled after the UK AIM, A2IM hopes to use the collective power of the independent labels to provide more bargaining power, especially useful as the transition to digital downloads continues to grow as a legitimate distribution and revenue source.

FMC welcomes A2IM and looks forward to working with them on issues where we share common interests in the future. Interested in learning more about A2IM? Attend an information session at our Policy Summit

Indie Labels Join Forces
By John Borland, CNET, June 7, 2005

More FCC news! On May 6, the DC District Court of Appeals threw out the FCC’s order establishing the “broadcast flag,” ruling that the FCC exceeded its authority in creating the flag. The broadcast flag is a signal embedded in a digital television signal that can restrict the distribution of programs.

Content companies like Hollywood movie studios are now asking members of Congress to give the FCC the authority to order the broadcast flag that the court order said the Commission did not have. Content companies are in favor of the broadcast flag because they believe it will keep viewers from making digital copies of their content and circulating them on the internet. There are no specific proposals yet, but broadcast flag-related provisions could be attached to any number of bills coming before Congress.

Opponents of the broadcast flag believe there are bigger consequences to its existence than just prohibiting illegal distribution of digital programs. For example, the flag will impose constraints on the design of consumer-electronics and computer products that will hinder consumers’ ability to use these devices; and it will limit what users can do with broadcast television content more than they are limited now.

Read the decision

Motion Picture Association of America’s (MPAA) CEO on Why the Broadcast Flag Should Go Forward
The U.S. Court of Appeals for the D.C. Circuit did not rule against the idea of a broadcast flag. It only ruled that the FCC does not have authority from Congress to issue such a regulation.
By Dan Glickman, CNET News, May 26, 2005

Media Attorney Jim Burger on Why the Broadcast Flag Won’t Work
The flag violates a fundamental content-protection maxim: that content must be protected at the source.
By Jim Burger, CNET News, May 26, 2005

11. Corporation for Public Broadcasting Appoints Patricia Harrison as President

In broader media news, on June 23 the Corporation for Public Broadcasting, which was set up by Congress in 1967 to shield public broadcasting from political influence, has appointed Patricia Harrison, the former Republican Party co-chair, as its president and chief executive.

Recently, CPB’s chairman, Kenneth Tomlinson, has stirred up controversy alleging that public affairs programming at PBS is too liberal.

Front-Runner for Public Broadcast Agency Job is Former GOP Chair
Harrison’s background in political advocacy has alarmed some public broadcasters, who are concerned that she would compromise CPB’s traditional role as a "heat shield" that protects public broadcasting from political pressure by Congress and the White House.
By Paul Farhi, Washington Post, June 9, 2005

FAM Values
After years of quiescence, of late even senior officials of PBS and the FCC have begun to protest publicly, decrying the ongoing power grab in such mainstream mouthpieces as The Washington Post and The New York Times.
By Rory O’Connor, Alternet, May 10, 2005

12. Newsstream

What’s In a Name? For Clear Channel, an Elevated Status
An aspiring monopoly by any other name is still an aspiring monopoly – or is it? Clear Channel announced on August 9 that its Chicago music operations will now be called Elevated Concerts.
By Jim Derogatis, Chicago Sun Times, August 10, 2005

Roll On, Beethoven
When BBC Radio 3 offered listeners free downloads of symphonies, more than a million jumped at the chance.
By Sarah Shannon, The Independent, August 9, 2005

Recording Industry Says Number of Legally Downloaded Tracks Triples in First Half of 2005
The number of digital music tracks legally downloaded from the internet almost tripled in the first half of 2005 as the use of high-speed broadband connections surged around the world.
By Jane Wardell, Associated Press, July 22, 2005

Setting the Live Music Free
Websites enable the exchange of concert recordings, a practice that has thrived around the Grateful Dead and doesn’t bother the music industry.
By Steve Hochman, LA Times, August 8, 2005

Indie record labels seeing gold
iTunes pay hike, major label’s "payola" scandal leave indie music labels feeling like playing field is leveling at last.
By John Borland, CNET, July 26, 2005

Coffee, tea or CD?
Starbucks is jolting the music business, serving exclusive CDs and customized mixes along with its grandes and ventis
By Dan DeLuca, Philadelphia Inquirer, July 31, 2005

Lawmaker Revs Up Fair-Use Crusade
Rep. Rick Boucher is a rarity in Congress when it comes to digital media. He’s taken the side of consumers – not Hollywood and the music industry – in the sundry controversies surrounding digital entertainment.
By Katie Dean, Wired, June 16, 2005

Hopes for Legal Music Podcasts Rise
But like other music disc jockeys producing podcasts, which are radio-like shows that can be downloaded from the Internet to a computer or digital music player, he has been operating with one foot squarely in a gray area of the law.
By John Borland, CNET News, June 16, 2005

13. What We’re Up To

Jenny Toomey
Jenny would like to apologize to anyone who read in the last newsletter that she was busy in March and April. Considering the amount of work and travel in May, June and July, clearly, she hadn’t fully understood the meaning of the word. If you’ve read this far into the document you’ve seen us update you on almost a dozen individual issues so significant to musicians that each one could be their own FMC newsletter. Along with the dedicated FMC staff, Jenny’s been working on "allathat" as well as fundraising and pulling together the fifth annual summit. She has traveled from New York, to Seattle, to San Francisco, to The Hague, to Chicago, to Northampton, to Delaware and to other places she has probably already forgotten. In August she looks forward to never leaving the confines of her home.

Kristin Thomson
Since the last dispatch, Kristin has been madly gearing up for the fifth annual Policy Summit, which is shaping up to be the best yet. She recently spoke on panels at Villanova Law School and at the Maryland State Bar Association annual meeting, despite not being a lawyer herself. She also moderated a NARAS "Music in the Schools" Q&A session with the very-awesome Sleater-Kinney when they stopped in Philadelphia on June 24. In early July she spent three sleepless days dispatching and driving artist and crew transportation at the Philadelphia Live 8 show. Her Philly band Ken released its first CD (after, ahem, 10 years of existence) at a show at the Khyber in Philly on July 16. Now available on CD Baby!

Michael Bracy
In an effort to simplify a life complicated by FMC, his lobbying firm, record label, three children, upcoming NFL football season and (new to DC!) baseball pennent race, Michael is going to keep his update simple and clean by focusing on one word: progress. Spitzer investigation?
Progress. Low Power FM legislation? Progress. Emerging media consolidation/telecommunications policy coalition? Progress. Policy Summit? Progress. Slow Dazzle, Phosphorescent, Great Lakes Swimmers, South San Gabriel and Flotation Toy Warning releases? Progress. New Mendoza Line record (out early November)? Significant progress. Year two of the return of Joe Gibbs? We’ll have to see…

Peter DiCola graduated from the University of Michigan Law School on May 7th, and began serving as Research Director for FMC on June 1st. He is working on his ongoing research about the FCC’s media ownership rules as well as laying the groundwork for some new projects