August 3, 2001 11:20 AM PDT

Digital music bill paves way for online stores

Federal lawmakers have introduced a bill that would set ground rules for music distribution in the online world.

The Music Online Competition Act, or MOCA, would update copyright law to make it easier for online music services to conduct business without worrying about running afoul of the major music labels.

Free music sites such as Napster have been hobbled by lawsuits brought by the Recording Industry Association of America, whose major label members fear losing control of their music as it travels across the Internet.

The bill, introduced by Reps. Chris Cannon, R-Utah, and Rick Boucher, D-Va., attempts to streamline royalty payments for artists, make the distribution requirements for Webcasters more similar to broadcasters', and promote non-discriminatory music licenses.

"We hope this will be sort of the caffeine that will get the industry moving," Cannon said, adding that the bill was designed to "encourage lower-cost downloading of music."

Boucher said he was particularly worried that music labels could have a stranglehold over the distribution of their products. While he applauded label-backed efforts such as MusicNet and Pressplay, he pointed out that the rival ventures would control about 80 percent of all songs if they chose to cross-license. "I'm concerned that a distribution monopoly may arise," he said.

Boucher said the bill would require companies that license their songs to a third-party company to grant similar licenses to other distributors. However, he said the bill would not require compulsory licensing. In other words, if a music label does not want to license a song, it wouldn't have to.

The bill also would remove restrictions on companies that want to store multiple copies of songs on different servers, let people back up copies on their hard drives, and make it easier for online retailers to let potential customers listen to music online, much as they can in a store.

Digital content providers applauded the bill. "The Music Online Competition Act will ensure that consumers have Internet access to legal high-quality music, that creators get paid rapidly, and that competition--rather than lawsuits--will drive this marketplace forward," said Digital Media Association Executive Director Jonathan Potter, who hosted a press conference along with Cannon and Boucher to outline details of the bill.

Not surprisingly, the RIAA bashed the bill, saying it favors government regulation over market forces.

"A protracted legislative fight will not move us closer to where the music industry wants to be--delivering music to fans through a variety of different, innovative Web sites," RIAA President Hilary Rosen said in a statement. "Unfortunately, the Cannon-Boucher bill introduced today will divert time, energy and resources from achieving that goal. It is essentially a solution--a very bad solution--in search of a problem."

Boucher has been an active advocate of updating copyright law to accommodate digital content. Last year, he introduced a bill that would legalize services that copy CDs, store them online, and stream songs to people who can prove they own copies of the CD. And most recently, he promised to promote changes to the Digital Millennium Copyright Act that would protect people who crack copyright protection technology for legitimate uses such as research.

 

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