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From: no...@house.gov
Subject: 1998CRH1456A COPYRIGHT TERM EXTENSION ACT, Part 3/4
Date: 1998/03/26
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[[Page H1469]]

     food service or drinking establishments in which nondramatic 
     musical works are performed publicly and who claims that any 
     license agreement offered by that performing rights society 
     to the industry of which the individual proprietor is a 
     member is unreasonable in its license fee as to that 
     individual proprietor, shall be entitled to determination of 
     a reasonable license fee as follows:
       ``(1) The individual proprietor may commence such 
     proceeding for determination of a reasonable license fee by 
     filing an application in the applicable district court under 
     paragraph (2) that a rate disagreement exists and by serving 
     a copy of the application on the performing rights society 
     Such proceeding shall commence in the applicable district 
     court within 90 days after the service of such copy, except 
     that such 90-day requirement shall be subject to the 
     administrative requirements of the court.
       ``(2) The proceeding under paragraph (1) shall be held, at 
     the individual proprietor's election, in the judicial 
     district of the district court with jurisdiction over the 
     applicable consent decree or in that place of holding court 
     of a district court that is the seat of the Federal circuit 
     (other than the Court of Appeals for the Federal Circuit) in 
     which the proprietor's establishment is located.
       ``(3) Such proceeding shall be held before the judge of the 
     court with jurisdiction over the consent decree governing the 
     performing rights society. At the discretion of the court, 
     the proceeding shall be held before a special master or 
     magistrate judge appointed by such judge. Should that consent 
     decree provide for the appointment of an advisor or advisors 
     to the court for any purpose, any such advisor shall be the 
     special master so named by the court.
       ``(4) In any such proceeding, the industry rate, or, in the 
     absence of an industry rate, the most recent license fee 
     agreed to by the parties or determined by the court, shall be 
     presumed to have been reasonable at the time it was agreed to 
     or determined by the court. The burden of proof shall be on 
     the individual proprietor to establish the reasonableness of 
     any other fee it requests.
       ``(5) Pending the completion of such proceeding, the 
     individual proprietor shall have the right to perform 
     publicly the copyrighted musical compositions in the 
     repertoire of the performing rights society, and shall pay an 
     interim license fee, subject to retroactive adjustment when a 
     final fee has been determined, in an amount equal to the 
     industry rate, or, in the absence of an industry rate, the 
     amount of the most recent license fee agreed to by the 
     parties. Failure to pay such interim license fee shall result 
     in immediate dismissal of the proceeding, and the individual 
     proprietor shall then be deemed to have had no right to 
     perform the copyrighted musical compositions in the 
     repertoire of the performing rights society under this 
     section from the date it submitted its notice commencing the 
     proceeding.
       ``(6) Any decision rendered in such proceeding by a special 
     master or magistrate judge named under paragraph (3) shall be 
     reviewed by the presiding judge. Such proceeding, including 
     such review, shall be concluded within 6 months after its 
     commencement.
       ``(7) Any such final determination shall be binding only as 
     to the individual proprietor commencing the proceeding, and 
     shall not be applicable to any other proprietor or any other 
     performing rights society, and the performing rights society 
     shall be relieved of any obligation of nondiscrimination 
     among similarly situated music users that may be imposed by 
     the consent decree governing its operations.
       ``(8) For purposes of this section, the term `industry 
     rate' means the license fee a performing rights society has 
     agreed to with, or which has been determined by the court 
     for, a significant segment of the music user industry to 
     which the individual proprietor belongs.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 5 of title 17, United States Code, is 
     amended by adding after the item relating to section 511 the 
     following:

``512.Determinations of reasonable license fee for individual 
              proprietors.''.

     SEC. 204. DEFINITIONS.

       Section 101 of title 17, United States Code, is amended--
       (1) by inserting after the definition of ``display'' the 
     following:
       ``A `food service or drinking establishment' is a 
     restaurant, inn, bar, tavern, or any other similar place of 
     business in which the public or patrons assemble for the 
     primary purpose of being served food or drink, in which the 
     majority of the gross square feet of space is used for that 
     purpose, and in which nondramatic musical works are performed 
     publicly.'';
       (2) by inserting after the definition of ``fixed'' the 
     following:
       ``The `gross square feet of space' of a food service or 
     drinking establishment means the entire interior space of 
     that establishment and any adjoining outdoor space used to 
     serve patrons, whether on a seasonal basis or otherwise.'';
       (3) by inserting after the definition of ``perform'' the 
     following:
       ``A `performing rights society' is an association, 
     corporation, or other entity that licenses the public 
     performance of nondramatic musical works on behalf of 
     copyright owners of such works, such as the American Society 
     of Composers, Authors and Publishers (ASCAP), Broadcast 
     Music, Inc. (BMI), and SESAC, Inc.''; and
       (4) by inserting after the definition of ``pictorial, 
     graphic and sculptural works'' the following:
       ``A `proprietor' is an individual, corporation, 
     partnership, or other entity, as the case may be, that owns a 
     food service or drinking establishment. No owner or operator 
     of a radio or television station licensed by the Federal 
     Communications Commission, cable system or satellite carrier, 
     cable or satellite carrier service or programmer, Internet 
     service provider, online service provider, telecommunications 
     company, or any other such audio-visual service or programmer 
     now known or as may be developed in the future, commercial 
     subscription music service, or owner or operator of any other 
     transmission service, or owner of any other establishment in 
     which the service to the public of food or drink is not the 
     primary purpose, shall under any circumstances be deemed to 
     be a proprietor.''

     SEC. 205. CONSTRUCTION OF TITLE.

       Except as otherwise provided in this title, nothing in this 
     title shall be construed to relieve any performing rights 
     society of any obligation under any State or local statute, 
     ordinance, or law, or consent decree or other court order 
     governing its operation, as such statute, ordinance, law, 
     decree, or order is in effect on the date of the enactment of 
     this title, as it may be amended after such date, or as it 
     may be issued or agreed to after such date.

     SEC. 206. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect 90 days after the date of the enactment of this title.
  Mr. McCOLLUM (during the reading). Mr. Chairman, I ask unanimous 
consent that the amendment be considered as read and printed in the 
Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Florida.
  There was no objection.
  Mr. McCOLLUM. Mr. Speaker, we are going to have a serious dispute 
today in some detail about how we deal with music licensing, but let me 
tell my colleagues what my amendment is all about. It is all about what 
is called compromise. It is all about the fact that for about 5 years 
now we have been debating, maybe a little longer than that, how to get 
a copyright extension bill out which affects thousands of people and 
all kinds of businesses totally unrelated to what the Sensenbrenner 
amendment is about.
  The reason we have had that debate is because the restaurant owners 
of America have wanted to be exempted from some long-term fees that 
they have had to pay song writers for playing their music in their 
restaurants, and the song writers and their associations that collect 
the fees have been resisting that. And we have arbitrated and tried to 
get dispute settlements and all kinds of things.
  The gentleman from North Carolina (Mr. Coble), who is my subcommittee 
chairman, and the gentleman from Illinois (Mr. Hyde), who is my full 
committee chairman, and the gentleman from Michigan (Mr. Conyers), who 
is our ranking member, and the gentleman from Massachusetts (Mr. Frank) 
have all worked hours and hours trying to get agreement between these 
parties on something so we could move this bill ahead.
  Well, we never got there. But this amendment I am offering is 
essentially where those gentlemen think the compromise ought to be. It 
is true compromise.
  What it does is this: It provides that most of the restaurants of 
this country, the vast majority, will be exempted from paying this fee, 
so the small businessman will not have to pay it anymore. It is about 
$30 a month, they tell me, for each restaurant, and the big restaurants 
are still going to have to pay it. I think that is fair because that is 
the property right of the song writer that he or she has invested their 
entire livelihood in.
  In fact, what it boils down to, if we talk about song writers, is 
that, and there are thousands of them out there, very few of them ever 
have a big hit. The few that do are not terribly worried about it, but 
the thousands that do not average under $10,000 a year in income, 
average under that. So they are really very small business people, and 
their primary livelihood, their only livelihood, frankly, comes from 
the royalties on their songs. And royalties pay gradually.
  Many, many different times, as the gentleman from Wisconsin (Mr. 
Sensenbrenner) correctly pointed out, these songs are played, 
reproduced at different levels, and a little bit here or a little bit 
there, penny here or penny there, is paid into a royalty house that

[[Page H1470]]

distributes money to these folks that only nets them out, after all is 
said and done, for everything they write in a given year about $10,000 
overall in the whole Nation.
  And the restaurants are a big part of that. And if we take away, as 
the Sensenbrenner amendment does, virtually all restaurants in the 
United States paying these fees and lots of other businesses too, we 
have taken away a big hunk of that $10,000 that the average song writer 
gets in the United States from his or her work product each year.
  But my amendment is going to go to exempting small businesses. It is 
the compromise to do that. It does it by using the same 3,500 square 
feet number that the Sensenbrenner amendment does to exempt, but it 
does it on a gross square footage level, which is a lot more reasonable 
to do, where we talk about the entire restaurant, whether it is made up 
with kitchens or bathrooms or whatever, not trying to get in there and 
be more obtrusive, that I do not think most restaurants would want, and 
trying to measure out every restaurant to figure out just exactly how 
much this or that or the other restaurant has in the way of square 
footage for the actual eating space.
  It takes what will probably be on the books in the local community 
with the ordinances that they have and the zoning requirements and all, 
so we can clearly see, without having to go in there and take a tape 
measure, how much are you going to base the fee upon?
  Anyway, the net result of this dispute is that we exempt, as I say, 
65 or 75 percent in my amendment, whereas his does virtually all the 
restaurants in the United States.
  If a restaurant has 6 or fewer speakers for broadcasting on radio or 
television or 4 or fewer televisions, my substitute amendment will 
exempt that restaurant no matter what size it is, no matter what size 
it is. That seems very reasonable.
  But at the same time we provide balance. Besides making these changes 
that exempt a lot of restaurants, we provide balance in the compromise 
amendment to the song writers because we protect their property rights 
so they get something back from the larger restaurants. And we 
recognize they do not always have the big hit by giving them this 
protection.
  By the way, my amendment would increase the exemptions by about 406 
percent over what they are now. I think now there are very few that are 
exempted. But we also provide some balance in terms of the access to 
the courts and to the rate dispute settlement process that has been 
discussed. Right now there are problems in the fact that the rate 
commission that decides various disputes over whether this fee or that 
fee should be paid when a restaurant owes is set up in New York and 
everybody has to go to New York. That is expensive.
  Granted, almost all the small restaurants are being exempted, but 
even the larger ones, we do not want them to have to go to New York. We 
do not want any other business to have to travel that far from home. So 
we set up a provision in the substitute amendment that the circuit seat 
of every one of the Federal judicial circuits, that is, 12 of them, 
where the Federal circuit courts sit, there will be a circuit rider 
from that rate commission travel out there periodically so rate 
disputes can be heard.
  But we will have uniformity. We will not go to the arbitration in 
every local hometown that the Sensenbrenner amendment proposal would 
do.
  The CHAIRMAN. The time of the gentleman from Florida (Mr. McCollum) 
has expired.
  (By unanimous consent, Mr. McCollum was allowed to proceed for 1 
additional minute.)
  Mr. McCOLLUM. Mr. Chairman, so what I am trying to do in this 
substitute is fairly straightforward; it is to provide an opportunity 
for the Members to vote on as close as we can get it to where the 
dispute has been put in terms of compromised negotiations over all of 
these 5 years.
  When it became ripe here in the last couple of weeks, we did not get 
this to closure. Frankly, the restaurants want more. Frankly, the song 
writers would like to have it more their way. But the reality is, this 
is truly a compromise that will provide my amendment, my substitute, 
provide relief for the truly smaller restaurants, 65, 70 percent of all 
restaurants in the United States never have to pay these licenses fees 
again; provide easy access to courts, to settling these disputes 
closely in the geographical area, and protect the property rights of 
the song writers so the song writers can still get some money, some 
income, since most of them do not have a whole lot, from the larger 
restaurants and the larger establishments. That is what it is all 
about.
  I urge a vote for my substitute as the reasonable alternative and 
compromise.
  Mr. SENSENBRENNER. Mr. Chairman, I rise in opposition to the 
amendment.
  Mr. Chairman, first of all, this McCollum amendment is no compromise. 
It was the last offer of the music-licensing monopolies, ASCAP and BMI, 
in the negotiations which broke off and has been rejected unanimously 
by all the organizations that support my amendment. The adoption of the 
McCollum amendment will not fix the problem with music licensing.
  I would like to give a little comparison between the two. First, the 
McCollum amendment does not provide for local arbitration. Any business 
owner or proprietor that wishes to contest a rate demand by ASCAP and 
BMI still has to go to court and hire a lawyer.
  Now, instead of having to go to New York, the McCollum amendment has 
the cases heard by a Special Master in each of the 12 circuits. That 
does not reduce the cost to a proprietor who wishes to contest 
something that he feels unreasonable. Going to San Francisco from 
Pocatello, Idaho, or to Atlanta from Kissimmee, Florida, or to Chicago 
from Superior, Wisconsin, is going to cost a lot of money and the meter 
ticks; and local arbitrations in the Sensenbrenner amendment will solve 
that.
  Secondly, the McCollum amendment only covers certain restaurants and 
not other music users, whereas, my amendment is universal. Only bars 
and restaurants are covered by the McCollum amendment, not funeral 
homes, the dentist's office, florists, the Main Street appliance store. 
They still are subject to the same type of harassment by ASCAP and BMI 
that my amendment seeks to eliminate. So unless our funeral home or our 
dentist's office has got a restaurant or a bar license, then we do not 
get the exemption. So it is very narrowly targeted.
  Third, the McCollum amendment is poorly targeted and would include 
parts of a restaurant where music is not played. For example, the 3,500 
square feet contained in the McCollum amendment includes the bathroom, 
the broom closet, the refrigeration area, the storage area and the 
like, instead of the 3,500 square feet in my amendment, which is just 
where the music is played. If we want to pay a royalty fee or have to 
pay a royalty fee, we ought to pay a royalty fee where people can 
listen to the music rather than where there is no music.
  The McCollum amendment also does not apply to all music licensing 
societies in its circuit rider provision. It only provides to ASCAP and 
BMI, which are the subject of the consent decrees that were entered 
many years ago. Bob Dylan is not a member of ASCAP and BMI, and if one 
of his tunes comes up on the radio or the TV, the McCollum amendment 
does not apply, and the restaurateur or the bar owner or the other 
retail proprietor is subject to the existing law. The Sensenbrenner 
amendment does not have that defect.
  There is no freedom from vicarious liability in the McCollum 
amendment. So our city's convention center or a big hotel which is open 
for various types of exhibitions is on the hook because one of their 
tenants that they have leased space out to happens to turn on the TV 
when licensed music is played. The Sensenbrenner amendment gets rid of 
the vicarious liability, and that is a protection for hotels as well as 
for the municipalities that operate convention centers and the like.
  The McCollum amendment circuit rider adjudication provision is only 
as good as the Department of Justice consent decrees. If the DOJ gets 
rid of the consent decrees, then everything goes back to New York City. 
And DOJ has done that on many complicated areas, the most prominent of 
which is the AT&T litigation consent decree.

[[Page H1471]]

  The McCollum amendment only applies to a restaurant owner who does 
not own any other business besides his restaurant. So if the restaurant 
owner is into something else, the McCollum amendment does not apply. It 
would go back to the existing law which is so strongly objected to.
  And finally, under the McCollum amendment, an appliance store dealer 
who sells radios and TVs would still have to pay royalties for music 
that comes across the TV when he turns them on to sell them. The 
Sensenbrenner amendment does not do that.
  I think that the McCollum amendment is a sham. It is a fig leaf that 
really does not solve the problems that have caused this issue to come 
to the Congress. And finally, I would like to point out that there are 
those who say that passing the Sensenbrenner amendment is going to take 
away the income of poor, starving artists. If they believe ASCAP's 
figures, only 14 cents of their revenue on the dollar comes from fees 
from bars and restaurants. My amendment does not exempt live 
performances, big nightclubs----
  The CHAIRMAN. The time of the gentleman from Wisconsin (Mr. 
Sensenbrenner) has expired.
  (By unanimous consent, Mr. Sensenbrenner was allowed to proceed for 1 
additional minute.)
  Mr. SENSENBRENNER. And establishments that play their own recorded 
music, their own CDs and tapes.
  My guess is that the exemption that my amendment proposes might 
reduce ASCAP's and BMI's fees by as much as 5 cents on the dollar, but 
they will be able to pick that up with the 20-year term extension that 
is contained in the underlying bill.
  Vote for balance, vote against McCollum and vote for Sensenbrenner.
  Mr. DOGGETT. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I have done everything I could to stop the 
Sensenbrenner amendment except threaten to sing myself; and I would ask 
my colleagues to spare the House that kind of circumstance by 
supporting the amendment the genuine compromise and moderate approach 
that the gentleman from Florida (Mr. McCollum) has offered as a 
substitute to the Sensenbrenner amendment.
  A lot was just said about it. But I think that the bottom line that 
most people in this House and across the country would want to know 
about is that if it is approved, if this McCollum music licensing 
amendment substitute is approved, 65 percent of all the eating and 
drinking establishments in this country will be exempt, their problems 
will be taken care of.
  Already the national licensed beverage folks have agreed to something 
very, very similar, if not exact, to the amendment that the gentleman 
from Florida (Mr. McCollum) is offering. The same amendment would 
exempt audio sound systems with fewer than 6 speakers and would exempt 
video systems with 2 television sets. So there is ample room for 
agreement.
  I am troubled frankly by some of the provisions in this amendment. I 
would like to leave the system largely as it is at present. But I think 
that trying to achieve some balance is a realistic compromise, my 
colleague has come forward with a reasonable amendment.
  We do need to focus, though, on what a failure to adopt his amendment 
is really all about. You see, there really is not any free lunch, we 
have all heard that, and if the restaurants across this country were to 
offer one free lunch after another, we know full well that they would 
go out of business because they have to earn a profit on their labor 
and on their services.

                              {time}  1215

  The same thing is true with reference to those who offer something to 
our community through song writing and through their creative spirit. I 
believe that those same folks deserve to have their property protected 
just as much as the restaurant owner or any small business in this 
country.
  I think one of the reasons we see some of our colleagues tending to 
put our songwriters in a different category is that we often think of 
them as the rich and famous. We think of famous artists like Willie 
Nelson and Jimmy Dale Gilmore, we think of people coming star-studded 
in the limousines and the designer clothes to the Grammys and the other 
celebrations of music like our South by Southwest Music Festival down 
in Austin. But the truth of the matter is that most of our artists are 
out there working somewhere else and doing a little creative work on 
the side and these revenues which are only costing the restaurant or 
the small business that uses this work product about $1.58 a day, those 
revenues are vital to that creative spirit.
  I think not only of the famous groups there in Austin, but one that 
is becoming a little more famous, the Austin Lounge Lizards. They have 
a hit called ``Newt the Gingrich.'' If they want to play that over in 
the Republican Conference to add a little bit more tranquility and a 
little ambience, they would be permitted under the McCollum amendment 
to do that without having to pay any licensing fee. I think it would be 
worth $1.58 a day to them to do that. But in the spirit of compromise, 
they would be exempted from this. And struggling groups like that and 
the members of that band who will be up here I think later in the 
spring to play in Washington, they work full-time at other jobs.
  We ought to recognize the creative genius that they bring, that they 
are not driving the limousines, they are in the cowboy boots and they 
are driving the pickup trucks down in our area, and that they have 
property rights that deserve to be protected, not stolen as would be 
accomplished by the Sensenbrenner amendment if it were adopted in full.
  I quoted from this earlier, but I think it is important to note that 
even going right up to the Supreme Court of the United States, the 
importance of music and music rights has been recognized. It was 
Supreme Court Justice Oliver Wendell Holmes who said it is true that 
music is not the sole object but neither is the food. The object is a 
repast in surroundings that give a luxurious pleasure, not to be had 
from eating a silent meal.
  If music did not pay, it would be given up. Whether it pays or not, 
the purpose of employing it is profit and that is enough. Indeed it is. 
It is a very real quantity. As Justice Holmes wrote in the language of 
an earlier era when this right was recognized, the songwriter 
contributes something to the restaurant or the small business or the 
convention that uses that songwriter's product, that is very real. It 
would not be used at all if the person using it did not think that it 
would bring more profit.
  The CHAIRMAN pro tempore (Mr. Gutknecht) The time of the gentleman 
from Texas (Mr. Doggett) has expired.
  (By unanimous consent, Mr. Doggett was allowed to proceed for 1 
additional minute.)
  Mr. DOGGETT. Mr. Chairman, I want to be wholly bipartisan, as the 
gentleman from Florida (Mr. Scarborough) and I have been on the party 
line, but I would just close in being truly bipartisan on the issue of 
music by making reference to a songwriter from outside of Austin, a 
fellow named Don McLean, who wrote ``American Pie.'' The first verse 
goes like this:
     A long, long, time ago
     I can still remember how that music used to make me smile
     And I knew if I'd had my chance
     That I could make those people dance
     And maybe they'd be happy for a while
     But February made me shiver
     With every paper I'd deliver
     Bad news on the doorstep
     I couldn't take one more step
     I can't remember if I cried
     When I read about his widowed bride
     But something touched me deep inside
     The day the music died.

  What this amendment is all about is to ensure that the creative 
genius of our songwriters does not die, at least protected in part with 
the moderate, reasonable approach that the gentleman from Florida (Mr. 
McCollum) has advanced here today.
  Mr. DREIER. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I rise in support of the McCollum amendment. I would 
like to bring up the name of our very dear, departed colleague Sonny 
Bono. Sonny Bono was someone who got very involved in this issue. He 
felt very strongly about it. Sonny Bono had a very unique perspective 
on this issue. He was a restaurateur, and he was also a songwriter.
  I believe that as we look at this issue, that Sonny would have 
supported what I do believe is a compromise. The gentleman from 
Wisconsin (Mr. Sensenbrenner) indicated this

[[Page H1472]]

is not a compromise, but as I have talked to lots of people on this 
issue, it seems to me that this is in fact a compromise. Obviously not 
everyone agrees to it, but it is a compromise.
  What does it do? It actually increases, as the gentleman from Texas 
said, the number of exemptions by 400 percent, to 65 percent of those 
restaurants that actually will be exempt. That is information that was 
provided to us by the Congressional Research Service.
  There is another issue here that is rather troubling to me, and that 
is as we deal in this global economy today, which obviously is getting 
smaller and smaller and smaller as we have found from the trip of the 
President to Africa who was there touting the agreement which we just 
passed in this House last week on expanding new trade opportunities 
with sub-Saharan Africa, it seems to me that as we look at that very 
important issue which we as Americans continue to argue in behalf of, 
that being intellectual property, the fact that when an individual has 
an idea, a concept, that person should be remunerated for that. If we 
were to pass the Sensenbrenner amendment, it would send, I believe, a 
terrible signal to our global trading partners that we as a nation are 
not going to be there on the front line arguing in behalf of 
intellectual property.
  Mr. Chairman, I am strongly supporting the McCollum amendment. 
Frankly, I do not think it is the very best measure but I am in support 
of it as a compromise. It is a compromise that many of our friends in 
the entertainment industry seem to be accepting.
  Mr. McCOLLUM. Mr. Chairman, will the gentleman yield?
  Mr. DREIER. I yield to the gentleman from Florida.
  Mr. McCOLLUM. Mr. Chairman, as the gentleman knows, as part of that 
compromise, we have actually increased from what the gentleman from 
Wisconsin (Mr. Sensenbrenner) is offering the exemption for up to four 
TV sets instead of two in a restaurant which actually is very sizable. 
We have doubled the number. That was something that, quite frankly, the 
music industry really did not want us to do. We have tried to go out. 
That is beyond the discussion point where this was a couple of weeks 
ago. There has been a big effort at that.
  Also, the gentleman from Wisconsin has taken away some liability that 
the owner of a space that might be renting it has whenever they might 
be improperly showing, say, Titanic or something, so you do not any 
longer get a fee. It is kind of clever, the owner who might know about 
this.
  Last but not least, he has come along also and done some other things 
that are kind of in the grass back there. He has managed to come to the 
position of saying even the music channel like Muzak, even if you play 
that, and that is what you are playing from a transmission other than 
radio and TV, which is all that we were discussing before we got to 
today in these debates between restaurants and music writers.
  Mr. DREIER. If I could reclaim my time, I would say maybe the 
gentleman went even further than I might have in this negotiating 
process. I will nevertheless continue to support the amendment.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. DREIER. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, on this question about 
whether or not this is a compromise, and the gentleman has mentioned 
our late colleague Sonny Bono who worked so hard for this, he frankly 
thought this went much too far. He wrote a letter to the Registrar of 
Copyrights expressing his opposition to the notion of giving away on 
the square footage that he felt it might undermine our international 
negotiating process.
  I say that simply for those who would deny that this is a genuine 
compromise. There were people who were strong supporters of the 
original bill who thought it went too far.
  Mr. Chairman, I am supportive of it because I think it is a 
reasonable approach, but I do want to validate the point he made. This 
is a genuine compromise. Mr. Bono in fact thought it had gone too far.
  Mr. DREIER. Mr. Chairman, I thank the gentleman for his contribution 
on that. I would simply say that the only argument that we will be able 
to use with our international trading partners is the fact that we have 
been able to come to a compromise with those who do in fact hold that 
intellectual property here.
  I urge strong support of the McCollum amendment as a compromise. I 
hope very much that we will finally be able to put to rest this battle 
which has been going on for literally years and recognize the very 
important rights of talent that exists in this country.
  Also in closing, I see our former colleague Carlos Moorhead has just 
come into the Chamber. He deserves a great deal of respect for his work 
on this copyright legislation, which he has pursued for a long period 
of time. Resolving this whole overall bill, it will be a great day for 
this institution.
  Mr. DELAHUNT. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, much has been made about the ability of the performing 
rights societies, principally ASCAP and BMI, to drive a hard bargain. 
They have been described as monopolies. I would just simply quote a 
great South Boston philosopher, Paddy McPhagan, who clearly would say 
in these circumstances, ``Give me a break.'' These organizations are 
not monopolies. They are trade associations, collective bargaining 
units, if you will, which enable authors and composers to negotiate 
contractual terms that are fair and are equitable. It is absurd to 
suggest that the thousands of songwriters who belong to these trade 
associations could ever negotiate a contract on their own.
  I understand why the restaurant association would want to focus on 
the market power of ASCAP and BMI, but I think it is important to 
remember what this issue is really about. It is about the people that 
are part of these trade associations, the songwriters who create 
American music. They are mostly people whose songs we all know by heart 
but whose names none of us, or most of us, would not even recognize. As 
Mac Davis testified at our hearing, the people who write the songs are 
the low men on the totem pole, the tiny names in fine print and 
parentheses under that star's name on the label, the last guys to get 
credit and the last guys to get paid. They are the ones who create the 
music that fuels an industry that pours millions of dollars into our 
economy and generates millions upon millions of dollars in taxes. Yet 
the songwriters get the smallest piece of the pie, pennies, if you 
will.
  Mac Davis is one of the lucky ones. He is a renowned songwriter. His 
musical gifts have been recognized and he has done extremely well. But 
most songwriters write hundreds of songs over the course of a long 
career before they achieve financial success, if they ever do. George 
David Weiss, who is the current President of the Songwriters Guild and 
one of America's truly great songwriters, commissioned a study that 
established that 10 percent of his colleagues are able to earn a living 
writing songs. He quoted a study that was done in 1980 and I am quoting 
now.

       Song writing is an occupation which has a high degree of 
     risk, a high degree of failure, a low chance of success and 
     in general miserly rewards.

  Like all true artists, they do what they do because they love it. 
When it comes to being compensated for their labors, they are willing 
to accept the verdict of the marketplace. But what they cannot accept 
is having their work stolen from them, and that is what the 
Sensenbrenner amendment would do. I urge my colleagues to vote for the 
McCollum amendment.
  Mr. TALENT. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, we have heard a number of different artistic products 
quoted this afternoon. I think that is probably appropriate in this 
context. I remember when I was growing up I was a big fan of the show 
All In The Family. I remember one time somebody said to Archie Bunker, 
who was of course the lead character in that show, to those old enough 
to remember, they said, ``The times they are a-changing, Arch,'' 
quoting a Bob Dylan song. He said, ``Yeah, and every time they do they 
turn around and kick me in the rear end.''
  That is how I think the small businesses of this country continually 
feel. They are ganged up on by big government, by big business, by 
monopolies,

[[Page H1473]]

whether you call them trade societies or artistic units or whatever, by 
the big people who come in and nick them for a little money here and 
there and under circumstances where even if they tentatively or 
theoretically have some rights under the law, they cannot do anything 
about it.
  The politicians always say, ``Yeah, small businesspeople, we love 
you. You're the backbone of our economy, the backbone of our 
communities.'' Now we get a chance to do something to help these 
people, to vindicate their efforts, to vindicate their efforts to 
achieve the American dream, and we have difficulty doing it.
  Let us talk about what the real-world situation is here. It is a 
dentist or somebody who runs a funeral home or somebody who runs a 
small restaurant. They have some speakers in the background and they 
carry a local radio broadcast. Somebody comes in from BMI or ASCAP and 
has a beer or sits there in the waiting room and listens for a little 
while and writes down some songs and then asks to see the manager and 
says, ``You're playing music that we've licensed. You owe us a hundred 
dollars a month. Here's the contract. Sign it. If you don't think you 
owe us or if you don't think you owe us that much, you can do something 
about it. You can go to the Southern District of New York and file suit 
in Federal court and try and vindicate your rights under the law.''

                              {time}  1230

  And they know and we know and everybody knows that is not going to 
happen. That is what the Sensenbrenner amendment is designed to fix. We 
have been trying to fix it for years. Even the supporters of the 
McCollum amendment admit we need to fix something here, we need to do 
something about the situation.
  Now the reason I support Sensenbrenner and not McCollum comes down to 
a couple of things, a couple of the biggest things. First is, the 
McCollum amendment does not cover everybody who is in the situation, 
only covers some restaurants. How many? Sixty-five, 70, 55; I do not 
know if it does not cover all of them, and it does not cover the 
funeral homes or the florists or the dentists' shops, so this will not 
be the end of it if we pass Sensenbrenner. They will be coming back 
because they are manifestly being treated in an unjust fashion where 
they cannot vindicate their rights under the law.
  And the other problem with the McCollum substitute is that it 
requires these small businesspeople to go to circuit court in the seat 
of where? In the city where the circuit court is headquartered. Might 
as well be the Southern District of New York or Honolulu or Russia or 
the Moon. If one lives in North Dakota or South Dakota they cannot go 
to St. Louis, where the Eighth Circuit Court of Appeals is located, and 
try and vindicate their rights to be only charged $80 a month like the 
guy next door instead of $100 a month. And again, we all know that. It 
will not make any difference. We will be right back where we started 
from if we pass McCollum instead of the Sensenbrenner amendment.
  Mr. Chairman, there is a lot of interest at stake here. That is why 
these things are hard, and that is why Members honestly feel 
differently about these kinds of issues, because we have a conflict of 
interest. It is important to protect the intellectual property rights, 
as my friend from California talked about, people who write songs, and 
protect them not just here but all over the world. We need to protect 
them in sub-Saharan Africa as well. But there is another interest, the 
interests of these small businesspeople who stake everything on their 
investments in their small business, for whom that is their life. They 
are interested in being treated fairly. That is important too, and we 
ought to recognize that.
  I agree there is no such thing as a free lunch, and we have all 
learned that in a lot of different endeavors and a lot of different 
circumstances. But how many times does one have to pay for lunch? Go to 
a restaurant, pay for it once. Every situation where a small business 
owner is playing radio music, that license has been paid for at least 
once by the radio operator, sometimes twice, three or four times if it 
is a TV broadcast.
  Let us deal with this issue. Let us admit what we all know. 
Incidental use of this music by people who are not charging admission, 
who do not have a jukebox, who do not have a CD player, they are too 
small on the chain for us to go out and get them in a way that is fair 
and a way that is appropriate and a way that allows them to vindicate 
their rights when they feel they have been treated unfairly.
  We can solve this issue and solve it now. Let us pass the 
Sensenbrenner amendment. Let us be fair to the small businesspeople.
  Mr. SCARBOROUGH. Mr. Chairman, will the gentleman yield for a moment?
  Mr. TALENT. I yield to the gentleman from Florida.
  Mr. SCARBOROUGH. Mr. Chairman, I have great respect for the 
gentleman, and I have followed him on a lot of issues in our committee 
and on the floor.
  Mr. TALENT. Reclaiming my time, so far the gentleman is fine.
  Mr. SCARBOROUGH. But I am going to ask a question or two that the 
gentleman may not be fine with.
  Mr. Chairman, the gentleman has said that we need to do something, we 
need to protect the property rights of these people.
  The CHAIRMAN pro tempore (Mr. Gutknecht). The time of the gentleman 
from Missouri (Mr. Talent) has expired.
  (By unanimous consent, Mr. Talent was allowed to proceed for 1 
additional minute.)
  Mr. SCARBOROUGH. Mr. Chairman, will the gentleman yield?
  Mr. TALENT. I yield to the gentleman from Florida.
  Mr. SCARBOROUGH. Mr. Chairman, the gentleman from Missouri said 
something needs to be done, he said that the property rights need to be 
protected, he said that they need to do something, and yet he was 
talking about endorsing an amendment that is a black-and-white, an all-
or-nothing approach where absolutely nothing is done. Their property 
rights will be absolutely eviscerated.
  So my question to the gentleman is, as somebody who I have seen for 3 
or 4 years respect property rights, where do we go from here? If my 
colleague supports an amendment that will destroy all property rights 
then what does the gentleman propose we do next?
  Mr. TALENT. Mr. Chairman, reclaiming my time, of course the gentleman 
knows I am not supporting an amendment that destroys all property 
rights, and the gentleman is setting up a premise that is a false 
premise.
  The copyright is vindicated in every case because it is paid for at 
least once, sometimes it is paid for twice, sometimes it is paid for 
three times. And now if the gentleman will indulge me, let me ask him a 
question: Does he expect a tavern owner or a dentist who lives in Fargo 
or who lives in Nebraska to be able to come to St. Louis to vindicate 
his right maybe to pay 20 or 30 or $40 less? Why is the gentleman 
afraid of an arbitration procedure, which is what we have in the 
Sensenbrenner amendment?
  The CHAIRMAN pro tempore. The time of the gentleman from Missouri 
(Mr. Talent) has expired.
  (By unanimous consent, Mr. Talent was allowed to proceed for 30 
additional seconds.)
  Mr. SCARBOROUGH. Mr. Chairman, will the gentleman yield?
  Mr. TALENT. I yield to the gentleman from Florida.
  Mr. SCARBOROUGH. Mr. Chairman, I am not afraid of an arbitration 
process, and I like the McCollum idea that we are actually taking it 
out of New York and moving it across the country. What I fear is that 
the gentleman is setting up an arbitration system that has absolutely 
no supervision from any court above it. The gentleman is going to be 
talking about the wild, wild West where somebody in Fargo could make a 
decision that has absolutely nothing to do with the rate system that 
happens in Atlanta, Georgia or California. We would not do that with 
our Federal court system; why would we do it with this?
  Mr. TALENT. Reclaiming my time, Mr. Chairman, a local arbitration 
procedure with a neutral expert master at arbitration is the only way 
to permit these issues to be heard and give everybody a chance to have 
their rights vindicated.
  Mr. HOYER. Mr. Speaker, I move to strike the requisite number of 
words.

[[Page H1474]]

  Mr. Speaker, I rise in strong support of the legislation, in strong 
support of the McCollum amendment, and in opposition to the 
Sensenbrenner amendment.
  This amendment is nothing short, referring to the Sensenbrenner 
amendment, of a taking. I have heard a lot about taking. This is about 
taking, whether to or not to. It would force songwriters to provide 
their music for free to restaurants and others.
  My colleagues, Stephen Foster died a pauper. Why did Stephen Foster 
die a pauper? Because the product he created was not popular, was not 
wanted, was not used? No. Because Stephen Foster put his product on the 
table, it was eaten, if my colleagues will, listened to, more 
appropriately, but not paid for. And so Stephen Foster, one of the 
great songwriters of America, and indeed the world, died a pauper 
because the world enjoyed his music but did not compensate him for his 
music.
  The McCollum amendment tries in a reasonable way to get at what is a 
problem that is by some perceived as cataclysmic and by others 
perceived as procedural. It is a reasonable alternative. It is one that 
I will support. But if it does not pass, I will as strongly as I know 
how oppose this legislation, even though I believe its underlying 20-
year extension of the copyright protecting one's property is 
appropriate.
  Mr. Chairman, I would hope that my colleagues who in fact have some 
property that we put in the public sphere, not expecting remuneration, 
at least not in money, the remuneration we expect is votes when we put 
our property, our ideas, our thoughts, our opinions in the public 
wheel. But when a songwriter sits down to create art, that songwriter 
does so for their own personal enjoyment, but they also do so with the 
expectation that if someone wants to use their product, they will do in 
a capitalistic society what we expect, and that is to compensate them 
fairly for that.
  The previous speaker spoke about the problem with small business. 
Government does not require a small business in America to turn on the 
radio in their place of business or to turn on the television in their 
place of business, not one. They do so because they think to some 
degree it enhances the ambiance of their establishment, and I agree 
with them. And if they thought curtains did or tablecloths did or 
pretty windows did, they would have to pay for all of those increases 
to the ambiance of their establishment.
  I have a lot of restaurants in my district and in my State. I 
understand some of them are concerned, and I believe that the McCollum 
amendment tries to reach out to them and say yes, we understand there 
is a problem, let us try to solve it and let us try to solve it where 
there is a meeting of the minds. And in fact, I understand there was a 
meeting of the minds until one party thought perhaps they could win 
without agreement. I do not know that; I have heard that.
  But let us, as we vote on the Sensenbrenner amendment, remember 
Stephen Foster, remember that Stephen Foster gave us so much, this 
Nation and this world, enriched our lives, enriched our culture, 
enriched our enjoyment, and let us not say to the Stephen Fosters of 
the world what they do is not worth us compensating them for it.
  I would hope that we would defeat the Sensenbrenner amendment, pass 
the McCollum amendment, and pass the bill.
  Mr. HYDE. Mr. Chairman, I move to strike the requisite number of 
words.
  (Mr. HYDE asked and was given permission to revise and extend his 
remarks.)
  Mr. HYDE. Mr. Chairman, I do not intend to take the full 5 minutes, 
but I do want to say that I support the McCollum amendment. I have 
great respect and admiration for Mr. Sensenbrenner who has worked long 
and hard on this issue, and admirably so. It is regrettable that over 3 
years of discussions have not resulted in a negotiated settlement. This 
is something that should have been agreed to and negotiated, but I 
guess it was not meant to be. But the McCollum-Conyers substitute, it 
seems to me, is a reasonable and balanced alternative to the issue of 
music licensing, and of some importance is the Congressional Research 
Service finding that the McCollum substitute will exempt over 60 
percent of all restaurants in the United States from paying music 
licensing fees to songwriters for music played over radio and 
television to their customers.
  This is small business week on the floor of the House. We are 
considering important legislation to help preserve the strength of the 
most important sector of our economy which employs more Americans than 
any other, and the amendment of the gentleman from Wisconsin includes 
an exemption for large chains and corporations who are able to pay 
their fair share of licensing fees to songwriters, many of whom I might 
also mention, are small businesses themselves; I am speaking of the 
song writers.
  The McCollum substitute concentrates on true small businesses, those 
restaurants and bars under 3,500 gross square feet. That constitutes 
over 60 percent of the restaurants in America. The substitute also 
exempts restaurants larger than 3,500 gross square feet as long as 
radio and television music is not played over too many speakers. This 
will protect larger restaurants that only play radio and television 
music in bar areas.
  There is much more to be said, and I will put that in the statement 
that will appear in the Record, but if this could not be resolved, 
could not be negotiated, then I prefer the solution proposed by the 
gentleman from Florida (Mr. McCollum).
  Mr. Chairman, I rise in support of the McCollum/Conyers substitute to 
the Sensenbrenner amendment to H.R. 2589, the ``Copyright Term 
Extension Act,'' and urge the House to support the substitute.
  I believe the McCollum/Conyers substitute presents Members with a 
reasonable and balanced alternative on the issue of music licensing. 
According to the Congressional Research Service, the McCollum/Conyers 
substitute will exempt over 60% of all restaurants in the United States 
from paying music licensing fees to songwriters for music played over 
radio and television to their customers in order to enhance their 
businesses.
  This is ``Small Business Week'' on the floor of the House. We are 
considering important legislation that will help to preserve the 
strength of a sector of our economy which employs more Americans than 
any other. The Sensenbrenner Amendment includes an exemption for large 
chains and corporations who are able to pay their fair share of 
licensing fees to songwriters, many of whom, I might also mention, are 
small businesses themselves. The McCollum/Conyers substitute 
concentrates on true small businesses--those restaurants under 3,500 
gross square feet. That constitutes over 60% of the restaurants in 
America. The substitute also exempts restaurants larger than 3500 gross 
square feet as long as radio and television music is not played over 
too many speakers. This will protect larger restaurants that only play 
radio and television music in bar areas.
  In addition to including large chains and corporations, the 
Sensenbrenner exemption also includes within its scope music that comes 
from sources other than radio and television. Surely, we do not want to 
prevent songwriters from getting just compensation for property that 
has not already been broadcast publicly for private enjoyment.
  As you know, negotiations on this issue have been ongoing in the 
Judiciary Committees of both the House and the Senate for almost 3 
years now. One of the problems that Mr. Sensenbrenner rightly attempts 
to correct is the fact that small business owners have to travel to New 
York City if they have a dispute about the rate they are being charged 
to play music in their establishment. This is unfair and needs to be 
rectified. The Sensenbrenner Amendment goes too far the other way, 
however, by being just as unfair to the three performing rights 
organizations by forcing them to arbitrate in any town in America. The 
McCollum/Conyers substitute is a compromise that will allow litigants 
to dispute rates in 12 places around the country where the seats of our 
U.S. Courts of Appeals are located.
  I also want to mention the relevance of our international 
obligations. Under the Trade-Related Aspects of Intellectual Property 
Agreement, and the Berne Convention, the United States may also 
restrict copyright to a point where it does not affect an author's 
ability to own his or her work. I believe, along with the United States 
Trade representative and the Secretary of Commerce, that the 
Sensenbrenner Amendment may violate these treaties which are the law of 
our land. We cannot allow ourselves to be unsuccessful defendants under 
the dispute mechanism of the World Trade organization on this issue 
which may lead to retaliation in areas other than intellectual property 
such as agriculture or resources.
  The United States makes more money internationally from intellectual 
property than from almost any other sector of our economy. It is

[[Page H1475]]

one of our most prized trade surpluses. We must be cautious and 
balanced in affecting our ability to persuade other nations to protect 
U.S. intellectual property. It is difficult to force others to live up 
to intellectual property agreements if we do not live up to them 
ourselves.
  Let us not forget that this is about taking someone's property. The 
Constitution makes it clear that Congress has a duty to encourage 
creativity by allowing for just compensation. I believe that the 
McCollum/Conyers Amendment carries out that purpose while meeting our 
international obligations and protecting small businesses who cannot 
afford licensing fees or travel to New York to dispute an unfair rate. 
The Sensenbrenner Amendment violates that incentive, our international 
obligations, and reaches beyond the constituency it purports to 
protect.
  I urge my colleagues to vote for the McCollum/Conyers substitute to 
the Sensenbrenner Amendment.
  Mr. BERMAN. Mr. Chairman, I move to strike the requisite number of 
words.
  (Mr. BERMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. BERMAN. Mr. Chairman, this is an issue raised by the gentleman 
from Wisconsin (Mr. Sensenbrenner)--let me indicate initially that I 
rise in strong support of the McCollum substitute and very strong 
opposition to the Sensenbrenner amendment--and it has been an issue 
that has been around the Committee on the Judiciary for a very, very 
long time. And it came to us initially as stories of a series of 
abuses, real or perceived, reported by owners particularly of 
restaurants and bars about things they were required to do. One, they 
could not get access to repertoire. The McCollum amendment provides 
that, which I think in practice is now already being provided. It makes 
it very clear in its provisions that every performing rights 
organization will have to list every piece of music with every writer 
on the Internet, with access to the general public, to the owners and 
proprietors of the store.
  Mr. McCOLLUM. Mr. Chairman, will the gentleman yield on that point?
  Mr. BERMAN. Yes, I yield to the gentleman from Florida.

                              {time}  1245

  Mr. McCOLLUM. Mr. Chairman, I think that is really important because 
you have two different organizations. Sometimes smaller restaurants do 
not want to have to pay a fee to two different outfits. So they have 
the list. They do not have to pay the fee to two different outfits. 
They can just play the music of the group that that organization 
publishes. The gentleman from California's point is really well made.
  Mr. BERMAN. But this was central to the complaints that has initiated 
the whole fight that has been going on for, I think, 8, 10 years in the 
Committee on the Judiciary.
  Secondly, it was always put in the context of the small restaurant or 
the small bar. I never thought that I would see the day when I would be 
coming forward to support an amendment that would exempt establishments 
of 3,500 square feet or under from paying any single fee to a 
performing rights organization for the use of their music.
  The gentleman from Missouri (Mr. Talent) made an eloquent statement. 
But when you examine some of his points, he said I do not want a free 
lunch for anyone. But this is a free lunch. He said the music has 
already been paid for, not by the people who are using it, by the 
stations that have decided to broadcast it. He is now creating a new 
public performance of that music.
  If it is just incidental, which is the way the gentleman from 
Missouri put it, if it is just incidental to the main purpose of their 
business, then if they do not want to pay the small amount annually 
they paid in order to use that music, they turn the radio off. It is 
very, very simple. It is incidental by its own terms. If it is 
incidental, it is essential.
  I would suggest the music is used as part of creating an atmosphere 
which encourages customers to come and patronize that restaurant, and I 
would suggest it is appropriate to ask them to pay for that just as 
much as they would pay for any other aspect of it.
  Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?
  Mr. BERMAN. I am happy to yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Mr. Chairman, I have a copy of the McCollum 
amendment that appears at page H-1448 of yesterday's Record, and I do 
not see any provision guaranteeing consumers access to repertoire 
anywhere in the McCollum amendment. Perhaps I am in error, and the 
gentleman from California can enlighten me.
  Mr. BERMAN. Does the gentleman want to take this one at a time?
  Mr. SENSENBRENNER. The second thing is, what we are talking about 
here is TV and the radio. And how is the proprietor of the retail 
establishment to know what song is going to go on next so he can look 
up whether this is licensed by ASCAP or BMI? There is no way he can do 
it.
  Mr. BERMAN. Mr. Chairman, I was not saying the gentleman is simply an 
agent of the restaurant and bars. He used to catalog a series of things 
he felt were wrong with the way music was paid for, and that it was 
very difficult for people who had to pay for music to find out just 
which of the performing rights organizations had the music, and that 
was part of his whole series of criticisms.
  Mr. Chairman, I yield to the gentleman from Florida (Mr. McCollum) to 
answer the gentleman from Wisconsin's initial question.
  Mr. McCOLLUM. Mr. Chairman, the fact is that, technically, the 
gentleman from Wisconsin is right. There is nothing in my bill about 
the repertoire because it is already on-line. The point I think the 
gentleman from California (Mr. Berman) is making, which I was trying to 
amplify, is the fact that that was the reason why the people came from 
the restaurants to originally complain that started the whole history 
of this, is they could not get and figure this out. Now they can.
  The BMI, ASCAP, those associations of songwriters have gone and put 
it on-line so people do not have that complaint anymore. That is the 
basic reason. It does not need to be in the bill.
  Mr. BERMAN. Mr. Chairman, I think I should then also correct myself. 
The version of the amendment that I read yesterday on the airplane had 
some very specific provisions. Apparently they are not in here now.
  Mr. SCARBOROUGH. Mr. Chairman, will the gentleman yield for one 
second?
  Mr. BERMAN. I yield to the gentleman from Florida.
  Mr. SCARBOROUGH. Mr. Chairman, just to address the second point, you 
do not have to call the radio stations now, and he knows that. You do 
not have to call the radio stations now anymore. There is now digital 
servers.
  The CHAIRMAN pro tempore (Mr. Gutknecht). The time of the gentleman 
from California (Mr. Berman) has expired.
  (By unanimous consent, Mr. Berman was allowed to proceed for 3 
additional minutes.)
  Mr. SCARBOROUGH. If the gentleman will continue to yield, if you want 
to hear the Beatles 24 hours a day, if you want to hear jazz all day, 
you can hear jazz all day through these digital servers. That is one of 
the really dangerous things about this bill is it expands beyond radio 
and TV and goes into this vast new universe that they know is coming 
down the road.
  Mr. BERMAN. Mr. Chairman, does the gentleman from Florida mean the 
bill or the Sensenbrenner amendment?
  Mr. SCARBOROUGH. I am sorry, the Sensenbrenner amendment. But these 
servers will also be able to provide the restaurant owners in the 
future services that will allow them just to pipe in music by BMI or 
just to pipe in music by ASCAP. And that technology is available today 
and certainly will be used, I predict, in the next few years to make it 
easy for restaurant owners to do that.
  So it is a very easy thing to do. It is very doable. You do not have 
to call your local radio station to see what the play list is. And I 
suspect that most of the people that were behind this amendment know 
that already.
  Mr. BERMAN. Mr. Chairman, continuing, there was one point, though, 
that I have not heard discussed so far. The Sensenbrenner amendment 
simply is not an amendment that exempts some restaurants and bars. It 
exempts all retail establishments.
  But it does a number of other things. It fundamentally changes the 
whole concept of vicarious and contributory

[[Page H1476]]

infringement of copyright. It contains a provision which, if applied, 
would affect the situation like this. I own a number of theaters. I 
lease those theaters to people who are showing unauthorized pirated 
works. And I am exempt from any liability and charging money for 
patronizing those particular works.
  They exempt from any liability the owner of the property that is 
leased, thereby eliminating any incentive that that landlord has when 
he leases his studios or facilities to put in provisions to ensure that 
the lessee does not engage in infringing conduct, does not go out and 
do public performances without paying the people who wrote the music.
  That is a huge and gaping loophole which will lead to a great deal of 
improper activity that could easily be deterred if you just simply 
retain existing concepts of contributory and vicarious liability.
  I think that is another huge weakness in the amendment of the 
gentleman from Wisconsin. The McCollum amendment undoes the effect of 
that amendment, and, therefore, it should be supported.
  Mr. SOUDER. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I am a cosponsor of H.R. 789, the Fairness in Music 
Licensing Act, which has bipartisan support of over 157 Members of 
Congress. While I wish that it were what he was offering today on the 
floor, I believe this compromised amendment by Mr. Sensenbrenner is 
fair and balanced.
  The Sensenbrenner amendment is balanced because it does several key 
things. One, it levels the playing field for businesses that use music. 
These business owners will now have a way to settle their disputes with 
music licensing societies without having to go to rate court in New 
York City. We have heard about different options under this but that is 
an important change.
  Two, it will allow businesses of a certain size, 3,500 square feet or 
less where the speakers are located, and that is important, because it 
isn't just a question of where the diners are sitting, it is a question 
of your storage, your kitchens, and receiving areas as well are located 
to be exempt from copyright royalties when they play TVs and radios, 
which is important to remember it is TV and radio music. If a business 
is over 3,500 square feet, it may be exempt if it plays only two TVs 
and has no more than six speakers.
  The Sensenbrenner amendment is fair because it does not change the 
law with respect to other kinds of music that a business may use. For 
example, a restaurant that has live music or plays CDs will not be 
covered by this Sensenbrenner exemption. These restaurants will still 
have to pay copyright royalties.
  Two, it does not change the law with respect to penalties. If a 
business is found to be violating copyright law, the penalty is a 
severe $20,000 per violation. That is, a business caught stealing 
copyrighted music is still liable under the Sensenbrenner amendment.
  I wanted to add a couple of comments based on some of the debate 
here. We are kind of getting lost here, whether Stephen Foster would 
have died a pauper, which I find quite a stretch into this debate. This 
is really about individuals who go to eat at restaurants.
  There is a mythology that businesses pay taxes. Businesses are pass-
through agents. What we are really talking about is whether we are 
going to increase the cost of eating out for diners, or whether diners 
are going to have less ambience, so to speak, or any music in the 
background at all.
  What we are forgetting here in a debate between different financial 
interests are the actual consumers of America. Are we in Congress going 
to, in effect, pass a food and beverage tax increase in this Congress? 
Are we going to have little music police going around to try to see how 
restaurants are enforcing that? Because that is the net that will 
happen.
  Either we will have the sounds of silence, perhaps some restaurants 
will broadcast sounds of silence brought to you by your local 
congressmen, if this passes. Are we going to have the sounds of silence 
here in the restaurants, or are we going to have higher food prices?
  That is really what we are debating here today. We are not debating 
starving artists versus starving restaurant owners. We are debating 
what is going to happen to consumers in the restaurant business.
  It kind of frustrates me in this debate. It is not a matter of just 
the rich and famous as we hear these things are put together, but, 
rather, rich and famous on other sides who are trying to, in effect, 
hit the consumers at restaurants.
  We have also heard that, in fact, restaurant owners could try to 
figure out which licensing company is doing this by going to digital. 
My friend, the gentleman from Florida (Mr. Scarborough) made that 
point.
  I am sitting here as a small business owner myself thinking this is 
not possible. I mean, in effect, businesses will decide probably not to 
offer the music or, in fact, they have not only the licensing fee cost, 
but the cost of the people that try to track that licensing fee.
  So we really are talking a significant potential increase, not just a 
marginal increase in the cost of doing business. Restaurant owners are 
already hammered by our Congress in minimum wage increases, in marginal 
inspection type increases.
  As we have more and more two-parent working families, more and more 
people are eating out. This is really a question of the financial 
pressures we are going to put on families just because of radio and TV 
broadcast, which, in fact, already are going through a process of 
paying for these fees. And it is a secondary market.
  One other comment I wanted to make as far as Congress itself. We 
constantly have this cuteness. I think it would be very interesting for 
somebody in the media to go through Members of Congress' records. When 
constituents call in, many Senators and House Members put them on hold, 
and there is music there.
  I would be very interested to see whether, in fact, the copyright 
laws are being violated by the Members who have stood up here and said 
the restaurant owners should pay. Are they paying the starving artists 
in their offices because they are part of a branch of an institution 
that has 535 offices in it? Are they paying the fees to the starving 
artists if they have music going over their system from a radio 
station? I really question whether that is being done in many cases.
  Mr. CALVERT. Mr. Chairman, will the gentleman yield?
  Mr. SOUDER. I yield to the gentleman from California.
  Mr. CALVERT. Mr. Chairman, I am glad the gentleman from Indiana 
brought up these points. I thought I would come on down as a person who 
was in the restaurant business or used to be in the restaurant business 
before I came to this body.
  The CHAIRMAN pro tempore. The time of the gentleman from Indiana (Mr. 
Souder) has expired.
  (By unanimous consent, Mr. Souder was allowed to proceed for 3 
additional minutes.)
  Mr. CALVERT. If the gentleman will continue to yield, I have heard 
some discussion about 60 percent of the restaurants would be exempt on 
the 3,500 square foot gross. Now, I know from my experience in the 
restaurant industry, many restaurants today are fast food 
establishments, and if you are adding that restaurant to the component, 
which I believe it is, I suspect that the number of dining restaurants, 
sit-down establishments is much lower than the number that is being 
thrown out here today.
  I point out another subject. When I was in the restaurant business, I 
paid ASCAP and BMI fees because I had live entertainment, and I used to 
tape music. So if I used FM radio on the interim, it would not have 
raised my BMI or ASCAP fees at all.
  But those restaurants that just have FM radio, public access, and 
television, which are very few, by the way, it seems to me the only 
reason that we pursue the Sensenbrenner amendment and not the McCollum 
amendment.
  From my perspective, real estate companies who have background music, 
or you mentioned dentists' offices, moving around to pursue collecting 
fees from these businesses is, I think, poor business on their part, 
but certainly intrusive to all small business.
  I would encourage everyone here to vote against the McCollum 
amendment and vote for Sensenbrenner.

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		       SCO Files Lawsuit Against IBM

March 7, 2003 - The SCO Group filed legal action against IBM in the State 
Court of Utah for trade secrets misappropriation, tortious interference, 
unfair competition and breach of contract. The complaint alleges that IBM 
made concentrated efforts to improperly destroy the economic value of 
UNIX, particularly UNIX on Intel, to benefit IBM's Linux services 
business. See SCO vs IBM.

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