On Thursday, the Digital Media Association (DiMA) will propose an amendment to Congress that would simplify how digital music providers obtain rights to music -- or completely rewrite copyright as we know it.On Thursday, lobbying group the Digital Media Association (DiMA) will propose an amendment to Congress that would simplify the hoop jumping that digital music providers currently have to go through to obtain rights to music -- or completely rewrite copyright as we know it.
On one hand, proponents say that the reworking of the U.S. law covering music licensing will facilitate the distribution of digital music and other content. But privacy advocates said the proposed bill would dramtically rewrite copyright law, requiring consumers to buy multiple licenses for the same content.
The Section 115 Reform Act (SIRA) would amend Section 115 of the United States Code that covers compulsory licenses. Currently, digital music providers such as satellite and streamed radio stations have to obtain licenses from several sources in order to stream that content. SIRA dictates that they could pay one blanket fee to obtain one blanket license, thereby cutting down on the administrative work it takes to license music.
SIRA's authors and proponents say that the busy work that it takes to obtain licensing for just one song is a huge, discouraging hurdle that the digital music industry faces. DiMA's members include Apple, AOL, Loudeye, Microsoft, CNET's MP3.com, MTV, Motorola, RealNetworks, Sling Networks, Sony, and Yahoo.
According to the U.S. Copyright Office, "the most critical and time-sensitive issue is the current unavailability of an efficient and reliable mechanism whereby legitimate music services are able to clear all of the rights they need to make large numbers of musical works quickly available by an ever-evolving number of digital means while ensuring that copyright holders are fairly compensated."
No one contests the overarching theme: digital licensing is based on antiquated laws, it is arduous, and it needs to be simplified. What is being contested by organizations such as the Electronic Frontier Foundation (EFF), however, is the fine print.
SIRA addresses ephemeral downloads, or what the EFF refers to as incidental downloads, meaning any content that is either temporary or cached in a computer. Chris Norgaard, partner and intellectual property attorney at Ropers Majeski Kohn & Bentley, says that SIRA actually prevents incidental downloads from being licensed but speculates that the mere mention of it has EFF nervous.
"It's designed to not have separate royalty-triggering events for incidental downloads for buffering and all of that stuff that happens in between," Norgaard said. "In other words, it contains a lot of language aimed at clearing away all of that as being actionable."
But EFF insists just the opposite. "[SIRA] is a subtle way of setting a dangerous precedent for the fundamental meaning of copyright law," said Derek Slater, an activist with the EFF. "It says that basically every transmission of a copyright work is also a distribution. That's very dangerous because the record industry has said if you're performing these songs and you're allowing them to be recorded, like with a TiVo for radio, that's a distribution and it treats it as licensable."
License fees would be paid by consumers
So who would pay these theoretical extra licensing fees? Jeff Joseph, a spokesperson for the Home Recording Rights Coalition, said that the digital providers would initially suffer and pass that extra cost down to the consumers.
"The fees immediately go to the manufacturer of the product or the service provider but you can bet that the consumers would see some kind of increased fee. It's a litany of attacks on innovation. You can see a day when you couldn't put a record button on any device because you're looking at too much licensing," Joseph said.
On Tuesday, EFF sent a three-page letter stating its opposition to SIRA to U.S. Representatives Lamar Smith (R-TX) and Howard Berman (D-CA), the sponsors who will introduce the amendment to Congress on Thursday. Other signing authors include Sirius Satellite Radio, Inc., XM Satellite Radio, Inc., BellSouth Corporation, Cox Radio, Inc., RadioShack Corporation, and many others.
The recording industry has a completely different but equally impassioned beef with SIRA, led by Cary Sherman, president of the Recording Industry Association of America, Inc. (RIAA).
"SIRA removes record companies from the digital music value chain of which they've been a part since the beginning of recorded music and would prohibit them from selling a final product with all rights included," Sherman said in a subcommittee hearing on May 16.
According to Sherman, SIRA addresses copyrights of musical works, which typically go to songwriters and lyric writers, but not sound recording copyrights, which typically go to the record companies. Under the current law, the recording industry doesn't receive those fees.
Another potential landmine inherent in SIRA is that it does not give copyright owners the right to opt out of licensing their works.
"The feeling is that if we give them the option to opt out, they're all going to opt out thereby destroying the efficiency that they are designing," said Aaron Davis, an intellectual property attorney with Patterson, Thuente, Skaar & Christensen. A blanket fee means a blanket price and opponents believe that the market should dictate copyright fees, he said.
The blogosphere was alive with comments about SIRA's perils on Tuesday. But while experts do not yet agree with the specifics of the amendment, most of them agree that it is high time that digital copyright be addressed once and for all.
"Everybody's got their position and everyone doesn't want to get screwed but at least now we've got something down on paper where all these parties can come together and debate," said Davis. "I bet this is going to be a lot about wordsmithing."
Online Media 
