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G:\Clerk Sb\Hearings\Transcripts\36131.Txt Leann House Committee on Small Business FULL COMMITTEE HEARING ON ASSESSING THE IMPACT OF THE COPYRIGHT ROYALTY RATES ON RECORDING ARTISTS AND WEBCASTERS COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS FIRST SESSION JUNE 28, 2007 Serial Number 110-33 Printed for the use of the Committee on Small Business ( Available via the World Wide Web: http://www.access.gpo.gov/congress/house U.S. GOVERNMENT PRINTING OFFICE 36–131 PDF WASHINGTON : 2007 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate 0ct 09 2002 09:24 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 G:\CLERK SB\HEARINGS\TRANSCRIPTS\36131.TXT LEANN HOUSE COMMITTEE ON SMALL BUSINESS NYDIA M. VELA´ ZQUEZ, New York, Chairwoman HEATH SHULER, North Carolina STEVE CHABOT, Ohio, Ranking Member CHARLIE GONZA´ LEZ, Texas ROSCOE BARTLETT, Maryland RICK LARSEN, Washington SAM GRAVES, Missouri RAUL GRIJALVA, Arizona TODD AKIN, Missouri MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania MELISSA BEAN, Illinois MARILYN MUSGRAVE, Colorado HENRY CUELLAR, Texas STEVE KING, Iowa DAN LIPINSKI, Illinois JEFF FORTENBERRY, Nebraska GWEN MOORE, Wisconsin LYNN WESTMORELAND, Georgia JASON ALTMIRE, Pennsylvania LOUIE GOHMERT, Texas BRUCE BRALEY, Iowa DEAN HELLER, Nevada YVETTE CLARKE, New York DAVID DAVIS, Tennessee BRAD ELLSWORTH, Indiana MARY FALLIN, Oklahoma HANK JOHNSON, Georgia VERN BUCHANAN, Florida JOE SESTAK, Pennsylvania JIM JORDAN, Ohio MICHAEL DAY, Majority Staff Director ADAM MINEHARDT, Deputy Staff Director TIM SLATTERY, Chief Counsel KEVIN FITZPATRICK, Minority Staff Director STANDING SUBCOMMITTEES Subcommittee on Finance and Tax MELISSA BEAN, Illinois, Chairwoman RAUL GRIJALVA, Arizona DEAN HELLER, Nevada, Ranking MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania BRAD ELLSWORTH, Indiana STEVE KING, Iowa HANK JOHNSON, Georgia VERN BUCHANAN, Florida JOE SESTAK, Pennsylvania JIM JORDAN, Ohio Subcommittee on Contracting and Technology BRUCE BRALEY, IOWA, Chairman HENRY CUELLAR, Texas DAVID DAVIS, Tennessee, Ranking GWEN MOORE, Wisconsin ROSCOE BARTLETT, Maryland YVETTE CLARKE, New York SAM GRAVES, Missouri JOE SESTAK, Pennsylvania TODD AKIN, Missouri MARY FALLIN, Oklahoma (II) VerDate 0ct 09 2002 09:24 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 G:\CLERK SB\HEARINGS\TRANSCRIPTS\36131.TXT LEANN Subcommittee on Regulations, Health Care and Trade CHARLES GONZA´ LEZ, Texas, Chairman RICK LARSEN, Washington LYNN WESTMORELAND, Georgia, Ranking DAN LIPINSKI, Illinois BILL SHUSTER, Pennsylvania MELISSA BEAN, Illinois STEVE KING, Iowa GWEN MOORE, Wisconsin MARILYN MUSGRAVE, Colorado JASON ALTMIRE, Pennsylvania MARY FALLIN, Oklahoma JOE SESTAK, Pennsylvania VERN BUCHANAN, Florida JIM JORDAN, Ohio Subcommittee on Urban and Rural Entrepreneurship HEATH SHULER, North Carolina, Chairman RICK LARSEN, Washington JEFF FORTENBERRY, Nebraska, Ranking MICHAEL MICHAUD, Maine ROSCOE BARTLETT, Maryland GWEN MOORE, Wisconsin MARILYN MUSGRAVE, Colorado YVETTE CLARKE, New York DEAN HELLER, Nevada BRAD ELLSWORTH, Indiana DAVID DAVIS, Tennessee HANK JOHNSON, Georgia Subcommittee on Investigations and Oversight JASON ALTMIRE, PENNSYLVANIA, Chairman CHARLIE GONZA´ LEZ, Texas LOUIE GOHMERT, Texas, Ranking RAUL GRIJALVA, Arizona LYNN WESTMORELAND, Georgia (III) VerDate 0ct 09 2002 09:24 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 G:\CLERK SB\HEARINGS\TRANSCRIPTS\36131.TXT LEANN VerDate 0ct 09 2002 09:24 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 G:\CLERK SB\HEARINGS\TRANSCRIPTS\36131.TXT LEANN C O N T E N T S OPENING STATEMENTS Page Vela´zquez, Hon. Nydia M. ....................................................................................... 1 Chabot, Hon. Steve .................................................................................................. 2 Van Hollen, Hon. Chris ........................................................................................... 11 WITNESSES PANEL I Miller, Bryan, WOXY.COM .................................................................................... 4 Silverman, Tom, Tommy Boy Records ................................................................... 6 Allcorn, Joey, Artist ................................................................................................. 9 Fink, Cathy, Artist .................................................................................................. 11 Kelly, Kieran, Stunning Models on Display Records ............................................ 14 Lee, Thomas F., American Federation of Musicians ............................................ 15 Eiwswerth, Richard, National Public Radio .......................................................... 18 PANEL II Inslee, Hon. Jay ....................................................................................................... 38 APPENDIX Prepared Statements: Vela´zquez, Hon. Nydia M. ....................................................................................... 44 Chabot, Hon. Steve .................................................................................................. 46 Miller, Bryan, WOXY.COM .................................................................................... 48 Silverman, Tom, Tommy Boy Records ................................................................... 51 Allcorn, Joey, Artist ................................................................................................. 54 Fink, Cathy, Artist .................................................................................................. 58 Kelly, Kieran, Stunning Models on Display Records ............................................ 61 Lee, Thomas F., American Federation of Musicians ............................................ 65 Eiwswerth, Richard, National Public Radio .......................................................... 94 Inslee, Hon. Jay ....................................................................................................... 98 Statements for the Record: American Media Services LLC ............................................................................... 100 Save Net Radio - Artist Testimonials .................................................................... 102 Save Net Radio - Independent Labels .................................................................... 105 Educational Media Foundation .............................................................................. 107 KSBJ-FM .................................................................................................................. 109 National Association of Broadcasters ..................................................................... 110 Northwestern College Radio Network .................................................................... 112 National Religious Broadcasters ............................................................................ 114 Family Junction ....................................................................................................... 115 Mother Jones Band .................................................................................................. 117 Nate Query ............................................................................................................... 119 Radial Angel LLC .................................................................................................... 120 Small Webcaster Community Initiative ................................................................. 121 Tangleweed ............................................................................................................... 125 (V) VerDate 0ct 09 2002 09:24 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00005 Fmt 5904 Sfmt 5904 G:\CLERK SB\HEARINGS\TRANSCRIPTS\36131.TXT LEANN VerDate 0ct 09 2002 09:24 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00006 Fmt 5904 Sfmt 5904 G:\CLERK SB\HEARINGS\TRANSCRIPTS\36131.TXT LEANN FULL COMITTEE HEARING ASSESSING THE IMPACT OF THE COPYRIGHT ROYALTY BOARD DECISION TO INCREASE RATES ON RECORDING ARTISTS AND WEBCASTERS THURSDAY, JUNE 28, 2007 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. The Committee met, pursuant to call, at 10:00 a.m., inRoom 2360, Rayburn House Office Building, Hon. Nydia M. Vela´zquez [chair of the Committee] Presiding. Present: Representatives Vela´zquez , Clarke, Johnson, Chabot, Akin and Heller. Also present: Representative Van Hollen. OPENING STATEMENT OF CHAIRWOMAN VELA´ ZQUEZ ChairwomanVELA´ ZQUEZ . I call this hearing to order. This morning the committee will examine a recent decision by the Copyright Royalty Board that will increase the fees that Inter- net radio broadcasters pay to play music. In advance of these new fees taking effect on July 15, it is important to consider a challenge of providing fair compensation for artists and record labels while maintaining a business-friendly environment for Webcasters. In May of this year, the Copyright Royalty Board set new rates at which commercial and noncommercial Webcasters will com- pensate copyright owners. The CRB hopes to establish an annual minimal fee that these entities must pay for each channel provided by the service. In response to the CRB decision, Internet radio pro- viders have raised concerns about whether the new rates and min- imum fees will put small Internet radio broadcasters out of busi- ness. Artists and record companies,
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