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By Gerald R. Smith, aka grsamf
In January, Senator Feinstein (D-CA) introduced a bill in the Senate titled “Platform Equality and Remedies for Rights Holders in Music Act of 2007” more popularly known as the “PERFORM Act.” The bill was cosponsored by Senators Graham (R-SC), Biden (D-DE), and Alexander (R-TN). The proposed law “would require satellite, cable and Internet broadcasters to pay fair market value for the performance of digital music. Additionally, the bill would require the use of readily available and cost-effective technology to prevent music theft.” The Bill was introduced in the previous session of Congress with Senators Feinstein and Graham as the sponsors, but was stalled at the time of adjournment.
This article explores what both the supporters and the critics of the Bill have to say about the effects of passing the Bill in its current or modified form. The article also examines inherent problems with the Bill as it is currently designed and predicts that without major revisions, it will once again fail to pass. The article concludes that no revision will permit such a bill to protect copyright holders and still encourage the advance of technology.
The Supporters' View
In her remarks to the Senate when she introduced the PERFORM Act, Sen. Feinstein asserted that the current licensing practices that apply to “radio-like” broadcasts by satellite, cable and Internet broadcasters are inadequate as new technology has moved these services from the realm of broadcasting to the realm of distribution. The Bill also addresses disparities that exist among licensing costs for various forms of broadcast or distribution by requiring all broadcast companies covered by licensing requirements to pay a fair market value rather than having different rate standards dependent upon the form of the media used in the broadcast. Fair market value would be dependent on several factors, including the degree to which reasonable recording of such broadcasts affects the potential market for the recordings. Other provisions of Copyright statutes establish the procedure for determining fair market value.
In addition to achieving parity in licensing and other fees paid by broadcasters, supporters of the Bill also assert it is necessary in order to protect the rights of copyright holders in the face of advancing technology. In her comments, Sen. Feinstein summarized these provisions thusly: “All companies would be required to use reasonably available, technologically feasible, and economically reasonable means to prevent music theft. In addition, a company may not provide a recording device to a customer that would allow him or her to create their own personalized music library that can be manipulated and maintained without paying a reproduction royalty.”
Continuing her comments, Sen. Feinstein attempted to allay fears of the effects of the proposed law by asserting three things it would not do: (1) it would not prevent manufacture and distribution of such recording devices, but simply require the seller to negotiate payment outside the license fee; (2) it would not inhibit consumers' current recording habits, in that any recording done manually from such broadcasts would still be allowed; and (3) it would not prevent manipulation of recording by program, channel or time period.
As examples, a person would be able to set the device to automatically “record a news station every morning at 9:00 a.m.; a jazz station every afternoon at 2:00 p.m., a blues station every Friday at 3:00 p.m., and a talk radio show every Saturday at 4:00 p.m. . . . What a listener cannot do is set a recording device to find all the Frank Sinatra songs being played on the radio service and only record those songs.”
Sen Feinstein and other supporters assert that because the bill contains these distinctions, it “supports new business models and technologies without harming the songwriters and performers in the process.”
Sen. Feinstein suggested the Bill stalled in the previous session of Congress because of misinformation about what the law would and would not do. Later in this article, I will suggest that the supporters have failed to consider fully some unintentional effects of the law that could very well occur. In fairness, I must point out that Sen. Feinstein has acknowledged the Bill as proposed is imperfect and that she hoped its introduction and resulting debate would allow discussion that would result in a much needed solution “sooner, rather than later.”
I will return to the sponsors' claims and a critique of the Bill after first examining some of the vocal critics' arguments.
The Critics' View
This latest battlefield in the ongoing war between the ever-growing popularity of consumers digitally recording and distributing music and the owners of the copyrights has predictably spawned much more public comment from the consumers than it has from the businesses most involved, including satellite radio broadcasters and manufacturers of the devices at issue. The criticism of the bill focuses primarily on a few points. The following distillation of what the critics have to say is the result of scores of visits to various websites. A Google search for “PERFORM Act” returns nearly 60,000 results. Thus, the summary may not accurately reflect the views of any single individual or organization, but is a composite of those views.
First, critics argue that no need has been been demonstrated for the Act. A primary impetus for the Act has been to eliminate the disparity among various modes of broadcast, from traditional radio through the digital broadcasts by satellite radio, cable and Internet, along with preventing wholesale copyright infringement by recording these digital broadcasts. Although it may be true that no specific evidence of the need has been demonstrated, the disparity among requirements of various forms of broadcast is apparent and the need for preventing copyright infringement is readily inferred from similar infringement by other means.
The most prevalent form of criticism, however, is that the Act is yet another attempt to infringe on consumers' rights and is a violation of the fair use doctrine that allows copying and using copyrighted material for various well-defined reasons. Many individuals have expanded this to the time worn arguments that what I do in my home must be legal, I have a right to use what I buy in any way I want, and everyone's doing it. Variations of this type of argument include that we need not be concerned about the recording industry because they are giants who make too much money at the expense of consumers. While many of these arguments have a certain emotional appeal, they do little to advance the legitimate debate on the best way to protect the rights of all concerned and are often nothing more than loud protests about taking away nonexistent rights.
An often repeated argument in the context of infringement by digital reproduction is that the Supreme Court long ago, in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984) (hereafter Betamax), held that the videotaping of movies broadcast on television constituted fair use and thus was not a copyright infringement. Betamax has often been cited in debates of this nature, perhaps most vehemently in the context of the controversy surrounding P2P file sharing.
What those who rely on Betamax fail to understand, however, is that the decision was specifically related to the factual findings that had been made. The ultimate finding was that taping of the televised movies was primarily a “time shifting” matter, done so the viewer could watch the program at a more convenient time. This ultimate factual finding rested on several preliminary factual findings, including that taping of televised programs did not significantly alter the movie-going habits of people who did the taping. Thus the impact on the potential market and decrease in the value of the copyright would be minimal. Additionally, there was substantial evidence that the majority of copyright holders of programs likely to be videotaped would not object to such taping.
In Betamax, the Supreme Court specifically found that the fair use doctrine allows Courts to “apply an 'equitable rule of reason' analysis to particular claims of infringement.” Thus, it is the particular claim and form of infringement that is the overriding concern in determining whether activity falls under fair use. Not only do the critics ignore the limited application of Betamax as the Court itself stated in its opinion, they also ignore the incredible differences in the technology at issue and the actual intended uses of that technology, although such intended use is often denied. The fact that people have been recording music from the radio for half a century or more is nearly irrelevant in today's digital world.
There is obviously an ocean of difference in reproductive quality between the videotape technology of the early 1980's and today's digital recording, as there is in the simplicity of making multiple copies of the same work while maintaining the original quality. Using this technology to reproduce and distribute copyrighted materials is well-documented, making today's digital reproducing of music in one's home much more than a time-shifting exercise. The underlying facts that resulted in the Betamax decision would thus be nonexistent in the current context. The majority of copyrights holders would almost certainly object to the kind of recording here. Evidence also indicates that digital recording in other contexts does affect the buying habits of individuals and thus has a major impact on the potential marker and value of the copyright and it is to be expected that similar evidence would exist in this context. Many of the critics' own arguments make ludicrous any claim that digital recording is merely a “time-shifting” tool.
Thus, as is often the case in situations such as this, much of the argument against the Act is highly emotional and illogical, if not counterproductive by failing to gain sympathy. As suggested in the next section, however, there are arguments against passage of the Act that should prevent such passage without some drastic changes.
My View – Is It Possible to Enact a Fair Statute?
Although much of the criticism of the Act is misguided, if not worse, there are a multitude of problems with the Act that do not bode well for its passage in this term or in the foreseeable future without some major revisions. Additionally, considerably more inquiry would be required in order to fashion a statute that would pass scrutiny by the Courts. Although Betamax cannot be cast in stone as prohibiting such a statute, the case itself and the lessons of the recent past must be addressed. The problems in this specific proposal, as well as problems inherent in any attempts to legislate a solution to the entire controversy of digital recording and copyright infringement, doom The Act to failure, if not the failure to pass in Congress, then the failure to achieve many of its goals.
Although wading through the provisions relating to a determination of licensing costs, fair market value, and other cost provisions may seem to be a prodigious and unavailing task, these provisions are no more complicated than many others which allow differences in amounts paid depending on the impact of a business' practice. Any problems with these issues could probably be easily solved.
As is often the case, however, the easy solution does not apply to the real problem. The items in the proposed Act that have raised the most numerous and loudest complaints do not lend themselves to easy solutions. These provisions have to do with requiring measures to insure against music theft and payment for devices that allow the user to manipulate the specific music to be recorded.
Despite Sen. Feinstein's assurance that the Act would both protect the interests of copyright holders and foster the growth and expansion of technology, it almost certainly would not achieve those twin goals in its present form. To see what I mean by this, we need to look no further than what a manufacturer or seller must do to comply with the law, i.e., “use reasonably available, technologically feasible, and economically reasonable means to prevent music theft.” These three requirements would unavoidably result in a degree of vagueness that would in turn prevent the twin goals of adequately protecting copyright holders and not chilling the advance of technology. Neither of these goals could be advanced and certainly not the two of them together.
Defining what is reasonably available, technologically feasible, or economical reasonable is an impossible task in this area. Statutes often look to “reasonableness” to determine standards of conduct, as do courts when the standards are not defined by statute. In most areas, what is reasonable is much easier to define and much more static than it is in the area of the technology. It is true that reasonable expectations placed on citizens undergo transformation over time, but such transformations are almost always slow in coming and in response to equally slow changes in society in general.
In this area of technology what is reasonable and economically feasible today may be completely irrelevant tomorrow. The common practice of defining what is reasonable by giving examples simply would not work here. Advances and new ideas come too rapidly and too unpredictably to allow such definition.
What this means is that a statute like the Act might protect copyright holders or it might encourage the advance of technology. It cannot do both. In its current incarnation, the Act does neither. Neither interest would know when the statute has been violated. For copyright holders, that could mean cases of infringement go without remedy. For developers of technology, fear of being found in violation because of inadequate definitions of what is required would almost certainly chill development and entry into the market of new products.
I believe all of these problems will once again result in a failure of the Bill to pass in the current session. While the Senator's desire to have a law in effect sooner rather than later may be laudable, as a practical matter, it may be impossible. Although she had hoped that the normal hearings and debate would preclude the need for lengthy study that would result in further delay, the unfortunate fact is that a law, whether delayed or not, will be ineffective without a much clearer definition of what is required. Such a definition will almost certainly require sacrificing, or at least seriously curtailing, one interest or the other. Often in enacting laws, it is necessary to make such choices to sacrifice one thing or another. Whether that choice is reasonably or politically available here is questionable.
I believe that the ongoing battle concerning copyright and digital reproduction and distribution, whether done by this means, by P2P file sharing, or other means, must be resolved outside the legal framework, whether that framework is established legislatively or by the courts. Certainly the legal system can place its stamp of approval on a solution, or more likely what would be a series of solutions, but all parties are engaged in a misguided and expensive endeavor in looking to the courts and Congress for the solution in the first place. The law moves and adapts slowly; technology advances at breakneck speed. Today's legal solution is tomorrow's headache. Any semblance of a reasonable solution will only take place when all sides are willing to engage in some give and take and make some compromises. Although it would require all sides to give up some things, the ultimate cost would be much less than today's legal battles and could ultimately truly foster the protection of rights and advance of technology the Act aims for.
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