FC: Audiophiles find Washington ally in electronic merchandisers

[Declan McCullagh <declan () well com>]

http://www.stereophile.com/shownews.cgi?1221

                December 17, 2001 -- It seems that all of the forces in
   the music industry have lately been conspiring against the music lover
   and audiophile. The record labels and their hired gun, the Recording
   Industry Association of America (RIAA), have so far blocked digital
   outputs on high-resolution audio players, insisted that watermarks be
   inserted into both high- and low-resolution audio data, and have even
   started to restrict consumer's fair use of compact discs and digital
   downloads.
   
   The National Association of Recording Merchandisers (NARM) is one of
   the few official voices standing up for the music-buying public, in
   addition to its primary role as support organization for music
   retailers. The group recognizes that grumpy consumers ultimately mean
   unhappy retailers, and it announced last week that it is submitting
   written testimony to a US House of Representatives oversight hearing,
   criticizing the Digital Millennium Copyright Act Section 104 Report
   that was released earlier this year by the Copyright Office. [...]

   NARM's testimony is included below:
   
   "America's retailers of music, represented by the National Association
   of Recording Merchandisers,
   
   "AGREE with the conclusion that a mechanical royalty should be paid
   when a reproduction is made (a download), and that a performance
   royalty should be paid when a public performance is made (streaming).
   No reproduction infringes the performance right unless someone can
   actually hear the performance. No public performance infringes the
   reproduction right unless a copy or phonorecord remains after the
   public performance is over.
   
   "AGREE with the conclusion that lawfully made digital downloads of
   sound recordings are entitled to the full application of Section
   109(a). Section 109(a) entitles the owner of a lawfully made copy to
   sell it or give it away without the consent of the copyright owner.
   
   "DISAGREE with the Copyright Office's assertion in Footnote 41 that
   Section 109(a) is a right without a remedy. There is absolutely no
   legal basis for concluding that Congress didn't mean what it said in
   enacting Section 109(a), or that Congress intended Section 109(a) to
   be voidable at the discretion of a copyright owner.
   
   "AGREE with the Copyright Office's conclusion that Section 109(a)
   should not be interpreted to authorize the sale or other disposition
   of archival copies apart from the originals. If an archival copy is
   sold separately from a legally downloaded copy, it is no longer
   archival, and therefore, it no longer enjoys Section 109(a) rights.
   
   "AGREE that consideration be given to the creation of a new archival
   exemption that provides expressly that backup copies may not be
   distributed (Option 2), but with care to avoid unintended results. The
   proposal to amend Section 109(a) to require that copies be lawfully
   made and lawfully distributed (Option 1) would have the effect of
   completely nullifying Section 109(a)'s applicability to digital
   downloads, and should be rejected. Such language would give copyright
   owners control over perfectly lawful downloaded copies for which
   retailers and consumers have already paid.
   
   "QUESTION the wisdom of continuing to just let the marketplace try to
   solve these issues. In recent months the music industry has announced
   plans in which consumers will be limited to one of only two similar
   business models, two media players, little or no price competition,
   and an incomplete selection of music through a handful of retail
   channels. Contrary to the first sale doctrine's principles, copyright
   monopolies are being leveraged to eliminate or restrict all
   competition in the retailing of copyrighted content. The Copyright
   Office Report fails to note the potential harm to the public of
   limiting exclusively to the copyright owners the right to develop new
   business models.
   
   "DISAGREE with the suggestion that use by copyright owners of Section
   1201 to protect business models rather than copyrights does not
   warrant Congressional concern. Congress never intended for Section
   1201 to permit copyright owners to neutralize the limitations Congress
   justifiably placed upon their copyrights, or to use technology to
   create for themselves rights never before conferred, such as the right
   of private performance. Today, Section 1201 is being used to shield
   the unauthorized usurpation of public rights by copyright owners.
   Copyright owners are claiming that though the owner of a lawfully made
   copy may legally sell or give away that copy, the copyright owner may
   nevertheless use access control technology to prevent the buyer or
   gift recipient from privately and lawfully performing the work. Such
   power upsets the careful balance of public and private interests that
   Congress has historically preserved in crafting the Copyright Act.
   
   "QUESTION some of the unsubstantiated allegations of economic harm (or
   threats of possible future economic harm) to copyright owners that
   have colored the Report. Retailers of music are the first to feel the
   sting of sales lost to pirates. We share the concern of copyright
   owners about potential harm to our industry. Nevertheless, retailers
   are reluctant to attribute every lost sale to piracy. Sales are also
   lost to free CDs from record clubs, to lousy weather, a soft economy,
   and poor releases. Retailers know that Napster did not kill the
   singles market. Before Napster came along, record companies were
   killing the singles market by not releasing singles. We need
   independent studies which can help us all better evaluate the impact
   of new technologies on the economics of our business.
   
   "QUESTION the conclusion that Section 109(a) should not be updated so
   that the principles of the first sale doctrine may carry forward to
   prevent copyright owners from exercising control over individual
   copies that they do not own. The Constitution and the public policy
   foundations of copyright law lend no support for allowing copyright
   owners to expand their control over electronic commerce once they have
   been fully compensated for the license to their exclusive rights."



-------------------------------------------------------------------------
POLITECH -- Declan McCullagh's politics and technology mailing list
You may redistribute this message freely if you include this notice.
Declan McCullagh's photographs are at http://www.mccullagh.org/
To subscribe to Politech: http://www.politechbot.com/info/subscribe.html
This message is archived at http://www.politechbot.com/
-------------------------------------------------------------------------