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.