We have some details on the webcast of tomorrow's Senate Judiciary Committee meeting on webcasting. Please click here to see the story in today's, or simply scroll down.

BY PAUL MALONEY
It wasn't the point for the webcasting industry and copyright owners to actually resolve their differences at Friday's roundtable discussion.

Yet the event highlighted just how far apart sound recording copyright owners and licensees remain. And how formidable a challenge the U.S. Copyright Office still faces in making its final decision on the necessary recordkeeping for those licenses.

The panel discussions were held so that the Copyright Office might better understand the motivation for copyright holders' recordkeeping demands and webcasters' objections to many of those demands. The panels were moderated by Marybeth Peters (right), Register of Copyrights for the Library of Congress, and Copyright Office general counsel David Carson.

Webcasters say they simply don't have the resources to meet reporting requirements...
Representatives of commercial and noncommercial webcasters and broadcasters alike, as well as representatives of other digital music delivery service companies, repeatedly contended that proposed recordkeeping requirements would place an unreasonable burden on their businesses.

Moreover they believe, the amount of data that would end up being sent to the royalty collection agency SoundExchange would overload its resources, making royalty distribution an even more difficult task than the agency currently holds it is.

The copyright owners, as represented by record label and artist organizations (RIAA, AFTRA, etc.), as well as SoundExchange, volleyed back that all of the reporting information they request is necessary. The groups claim this data is needed both for the accurate distribution of royalties, and to monitor compliance with the "sound performance complement" of the DMCA that restricts how that music can be presented.

...Requirements that the RIAA may even agree aren't necessary!
Digital Media Association executive director Jonathan Potter (far left with Yahoo!'s Alex Maghen) represented larger webcasters like AOL and MTV. However, one of his first major arguments of the roundtable was to question the logic of encumbering smaller and noncommercial webcasters, who he said are often more helpful in promoting a wider range of artists and music, with reporting requirements they don't have the resources to meet.

Michael Papish of Harvard University's WHRB, Will Robedee of Collegiate Broadcasters Inc., Joel Willer of KXUL (University of Louisiana at Monroe), and Deborah Proctor of independent noncommercial broadcaster WCPE claimed it would be unfeasible for the stations they represent to gather, process, and report this information as per copyright owners' requests.

(Incidentally, Proctor earned audience howls later when she reminded RIAA lawyers, who had printed and distributed copies of her stations' website as evidence, that her website is copyrighted.)

Labels say "artist, song, album, label" simply isn't enough
Most webcasters (and broadcasters) seemed to agree with 3WK's Wanda Atkinson, Beethoven.com's Kevin Shively, and RadioIO founder Mike Roe (right) who indicated that they are willing to provide copyright holders with up to four pieces of information about each song they play. (They referred to this info as "ASAL" for the artist, the song title, the title of the album on which the song appears, and the record company or label which released the album). With this information, licensees contend, SoundExchange could properly identify the vast majority of copyrighted sound recordings.

The RIAA and SoundExchange insisted it remains necessary for webcasters to supply the eight pieces of information pertaining to each sound recording, plus eight items regarding exactly when and how the recording was used, which they have held all along is necessary for artists and labels to get paid. (In their reply comments, the RIAA withdrew their earlier demand for a "listener log," presumably following cries that they were impossible, and possibly illegal, to comply with.)

SoundExchange counsel Barrie Kessler explained "we don't what you are playing until you tell us...The SoundExchange doesn't have some 'magical' database that can do all of this instantaneously." She went on to suggest software products from third-party vendors as a data collection solution. (CONTINUED BELOW)

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Further intrigue: Do you believe in a free ride for NPR and a SoundExchange "mystery" database?
The value of that reported data -- such as the UPC or ISRC codes, catalog number, plus the exact time the performance was made -- was called into question at one point when Potter and Fred "Fritz" Kass of the Intercollegiate Broadcasting System (representing educational broadcasters) revealed to the panel that they had discovered that copyright owners waived reporting requirements in their licensing agreement with the National Public Radio for stations with under ten employees.

A somewhat heated exchange followed between the two and RIAA attorneys Steven Marks (above left) and Gary Greenstein. It was punctuated when Carson (below right) stepped in, suggesting that this waiver might undermine the RIAA's and SoundExchange's argument of the value of this information.

"Doesn't that tell us something about how crucial it is to have reporting requirement for the other folks around this table?" he admonished.

Another interesting point was brought up by Wiley, Rein & Fielding attorney Bruce Joseph, in representing broadcasters like Clear Channel and Salem, as well as Sirius Satellite Radio. Joseph (below left foreground, with SoundExchange executive director John Simson and Brian Parsons of Clear Channel left and right background) stressed that broadcasters and webcasters are obligated to provide only enough information that's "reasonably necessary" to identify what sound recordings are played. Distributing the royalties, Joseph contended, was SoundExchange's problem.

"You have your own database to tell you who to distribute to," he said, again suggesting SoundExchange has the necessary information for their purposes after they receive sound recording identification data.

In fact, the existence of a useful SoundExchange database that might be helpful to the industry as a whole for the gathering of copyright information was supported by Barry Knittel of DMX Music (a music subscription service). He claimed his company helped build such a database, and that SoundExchange "is looking to commoditize it."

Will the "ephemeral" requirements vanish?
The most likely change to the Copyright Office's recordkeeping proposal to follow the roundtable discussion is that of records of ephemeral copies -- those copies of sound recording made in the process of webcasting. The Copyright Office had proposed following recording industry and artist requests that webcasters and broadcasters report information on the creation and required destruction of such ephemeral copies of their recordings.

The music services seemed to convince Peters and her staff that reporting on these "valueless" copies was unnecessary, and in the end has no impact on the distribution of royalties. RIAA lawyers argued that since ephemeral recordings helped streaming services, they had value and as such (and as the proposed rule dictates), copyright owners had a right to expect reporting on them.

Marks did admit however it was not yet known how these royalties, called "Section 112" royalties after the clause of the DMCA which deals with them, would be distributed.

In fact, RIAA lawyer Greenstein (above) argued that copyright owners should even collect on songs that are cached but never played! Steven Marks concurred with an analogy of a buffet where "you pay a premium to have everything available to you, though you may not eat everything."

At this point it remains unclear as to what final shape recordkeeping requirements will take. However, comments from Peters did in fact indicate that there is some change in store. "Nothing is set, everything is open," she said in an introduction to Friday's proceedings. "The proposed regulation is not where we'll end up."

Musicians' lobby suggests tiered system for royalties, reporting The Future of Music Coalition, a group that represents musicians' rights in the matters of technology, suggested to the Copyright Office a compromise plan for webcasters and sound recording copyright owners that would create four distinct categories of webcasters -- all with their own characteristics and requirements. The group was represented at the roundtable meetings by its executive director Jenny Toomey and technologies director Brian Zisk. A brief synopsis of their ideas was made available at the roundtable on Friday, with their full position to be submitted to next week's Senate Judiciary meeting on the matter. From the FOMC website: "It is critical to recognize that there is no single definition of a 'webcaster.' Rather, we believe it is possible to place most, if not all, webcasters into one of four classes:  a. Corporate webcasters  b. Small entrepreneur webcasters  c. Noncommercial and community broadcasters  d. Hobbyist webcasters... "The Future of Music Coalition believes there is enough common ground to create commercial, noncommercial, incubator and hobbyist licenses, each with distinct rates and reporting requirements. Terrestrial bandwidth, with its tradition of graded licensing rates, stands as a good model from which to start this work. "We hope that, with the installation of a graded licensing and reporting system, we would create a workable solution that both allows for webcasting on all levels to thrive, while also building new revenue streams for musicians..." The paper (available here), went on to call for more "reasonable" reporting requirements for smaller and noncommercial webcasters, the elimination of the ephemeral recording reporting, and elimination of the rule which requires webcasters to file their reports under the Penalty of Perjury.

BY PAUL MALONEY
Tomorrow's Senate Judiciary Committee hearing on webcasting will be streamed live at 8:30 AM CDT (9:30 East Coast, 6:30 West Coast) from the site CapitolHearings.org.

RAIN reported yesterday (here) that Senate Judiciary Committee chairman Senator Patrick Leahy (D-VT) (pictured) called the hearing to study the issue of DMCA rulemaking and its effect on webcastings royalty rates.

The hearing is titled "Copyright Royalties: Where is the Right Spot On The Dial For Webcasting," and presumably comes in response to the controversy that erupted after the US Copyright Office announced the arbitrator-proposed royalty recommendation in February.

RAIN understands that these webcasts are typically not archived, so you'll need to catch it live and/or "capture" and save the stream to view it later (the program is not copyrighted).

At least five representatives of interested parties will testify, including Rosen (pictured below); DiMA executive director Jonathan Potter; VP/GM of Arbitron Webcast Services Bill Rose; Billy Straus, president of Websound (an RIAA-licensed webcaster); and Onion River Radio founder Frank Schliemann. According to the press secretary for the Judiciary Committee, other witnesses may also be announced in the next day or two.

And there is still time for webcasters to submit written testimony to be accepted by the committee. Contact the committee office (202-224-7703) for further details.

DMCA supporters to party on the Hill
Though tomorrow's Judiciary Committee meeting may find fault in the Digital Millennium Copyright Act, supporters of the law will celebrate it the very next day.

In an "interesting twist" of scheduling, newly-promoted RIAA Chairman Hilary Rosen (pictured right, also see story below) and MPAA President and CEO Jack Valenti are among the hosts of a short "celebration" of WIPO Internet treaties and "to honor the authors and supporters" of the DMCA -- to be held on Thursday afternoon.

According to a posted notice on Declan McCullagh's "Politech" site (here), Leahy, along with Senators Joseph Biden, Orrin Hatch, Jesse Helms; and Congressmen Howard Berman, Howard Coble, John Conyers, John Dingell, Barney Frank, Henry Hyde, Edward Markey, Jim Sensenbrenner, and Billy Tauzin will be honored guests Thursday for the one-hour DMCA party.

Coble, Howard, Hatch, Conyers, Frank, Hyde, and Berman sponsored or cosponsored elements of the law passed in 1998.

The event will take place in the Rayburn House of Representatives office building (which, coincidentally, served as a meeting place and home base for the "Voice of Webcasters" during their "Hill Walk" last Thursday, see RAIN here).

From the Hiwire press release: "Hiwire, Inc., the leading provider of streaming advertising technologies, today announced a multi-year deal with WarpRadio.com, one of the nation's largest streamers of radio stations, streaming approximately 3 million hours per month for more than 200 radio stations. Under the agreement, Hiwire will provide ad insertion, ad tracking and ad sales for all of WarpRadio's stations.

"According to the latest published ratings, WarpRadio streamed more than 2.8 million hours of programming in April 2002, ranking third behind industry leader (and Hiwire client) Clear Channel Radio.

"The addition of WarpRadio's 200+ stations will compliment the hundreds of radio stations and Webcasters that currently use Hiwire's ad replacement and targeting technology. In addition, WarpRadio will join the Hiwire Ad Network -- the largest network of streaming advertising opportunities available today. WarpRadio can now realize the revenue potential of its inventory of over 60 million audio impressions per month by tapping into the enormous existing market for radio advertising."

WarpRadio is currently undergoing Chapter 11 reorganization. "We are excited about Warp because Warp is a company that's enormous -- we've got a big line-up of industry leaders right now, and we're pretty happy with that," Hiwire CEO Steve Goldberg told RAIN. Read the entire press release here.



From The Washington Post's Newsbytes: "The trade group that backs the five major record companies promoted several key figures today, handing President and CEO Hilary Rosen the title of chairman, and rolling the job of president over to organization's chief legal counsel, Cary Sherman [pictured].

"Both Rosen and Sherman have been instrumental in the RIAA's fight against digital music piracy, with Rosen serving as the trade group's primary public mouthpiece. Sherman, meanwhile has helped lead the RIAA's copyright wars against Napster, MP3.com, Aimster and Scour Exchange."

Read this piece here.