March 21, 1986 EXTENSIONS OF REMARKS 5973 EXTENSIONS OF REMARKS DO WE NEED MUSIC United States, i.e., stations not owned by had not sought to obtain performing rights COPYRIGHT REFORM? any of the three major television networks, via source licensing. Perhaps prompted by ABC, CBS, and NBC .... We conclude that the evidentiary gap emphasized in our deci­ the evidence Is insufficient as a matter of sion in CBS-remand or by the taunting of HON. JOHN BRYANT law to show that the blanket license Is an defendants in this litigation, plaintiffs OP TEXAS unlawful restraint of trade. The blanket began in mid-1980, a year and one-half after IN THE BOUSE OF REPRESENTATIVES license has been challenged in a variety of the suit was filed, to create a paper record contexts. It has been upheld for use by designed to show the unavailability of Friday, March 21, 1986 nightclubs and bars, BMI v. Moor-Law, Inc., source licensing. Mr. BRYANT. Mr. Speaker, American music 527 F. Supp. 758 <D. Del. 1981>, aff'd mem., Various techniques were used. Inlti&lly, is dominant in its art form; its popularity tran­ 691 F~ 2d 490 <3d Cir. 1982), by radio sta­ some stations simply inserted into the scends continents, cultures, and political sys­ tions,- K-91, Inc. v. Gershwin Publishing standard form of licensing agreement for tems-it is heard over the global air waves. Corp., 372 F.2d 1 <9th Cir. 1967>, cert. syndicated programs a new clause specifying denied, 389 U.S. 1045 <1968), and by a televi­ Our music is in such global demand that it re­ that the producer has obtained music per­ sion network, CBS-remand, supra. Without forming rights and that the station need mains one of the dwindling number of winners doubting that the context in which the not do so. No offer of additional compensa­ in our balance-of-payments equation. blanket license Is challenged can have sig­ tion for the purchase of the additional This music springs from the creativity of our nificant bearing on the outcome, we hold rights was made. Not surprisingly most pro­ people, and that creativity is genuinely all­ that the local television stations have not ducers declined to agree to the proposed American, a product of our ethnic and geo­ presented evidence in this case permitting a clause. A vice-president of MCA Television graphic diversity and the demands of our conclusion that the blanket license Is a re­ Limited <"MCA">, one of the major syndica­ youth. What is critical, however, is that this all­ straint of trade in violation of section 1. tors, replied to KAKE-TV, "It Is surprising American creativity takes place within the SOURCE UCENSING to me that the station would attach a Rider framework of the copyright law that encour­ of such magnitude without previously dis­ Mr. Speaker, the supporters of H.R. 3521 cussing it with us . [Ylou are apparently ages and nurtures it. The copyright system claim that alternatives to the blanket license asking us to undertake the clearance of the gives free reign to creativity, encourages com­ are not truly available. Yet the court found music performance rights in [the 'Rockford petition, and rewards success. In music, suc­ that there are three legitimate alternatives to Files' TV series] without offering any addi­ cess is popularity, and American music is the the blanket license. The legislation seeks to tional payment . [WJe are unable to most popular in the world. mandate one of those-source licensing-as accept the amendment . This does not Now that copyright system is under assault. the only way to license music to the exclusion mean, of course, that a different approach Is In October of 1985, the so-called source li­ of the blanket license and the other two alter­ unacceptable. It does, however, mean that a censing bill, H.R. 3521, was introduced. This change of this magnitude should be dis­ natives. Here is what the court said about cussed well in advance so that our respective bill will benefit fhose who profit from selling source licensing: concerns can be addressed." the creative efforts of others. It would inflict a As Judge Gagliardi noted, the "current Another approach, evidenced by King staggering blow on the copyright system availability and comparative efficiency of Broadcasting Co.'s letter to MCA, attached which has helped make the success of Ameri­ source licensing has been the focus of this a music performing rights rider to the can music possible. lawsuit." Id. at 291. The availability of standard syndication licensing agreement Mr. Speaker, none of the arguments ad­ source licensing Is significant to the inquiry and added, "If [sic] and additional fee Is in vanced by the proponents of the so-called as to whether the blanket license Is a re­ order, we would certainly consider favorable music copyright reform legislation are new. straint because so much of the stations' pro­ any such reasonable fee." Another ap­ They all have been made before impartial U.S. gramming consists of syndicated programs proach, adopted by Chronicle Broadcasting for which the producer could, if so inclined, Co. in letters· to various syndicators, was a courts. These courts have found them want­ convey music performing rights. Most of request for source clearance of music per­ ing. these syndicated programs use composer­ forming rights with the comment, "Chron­ The most recent, and the most definitive, of for-hire music. As to such music, the pro­ icle recognizes that this contemplated these court decisions was handed down by a ducer starts out with the rights of the copy­ change . may [sicl in some instances re­ unanimous Second U.S. Circuit Court of Ap­ right, including the performing right, by op­ quire an adjustment in the basic program li­ peals in September 1984. If space permitted, I eration of law ... unless the hiring agree­ cense fees.'' Metromedia, Inc., owner of sev­ would insert the entire opinion for the review ment otherwise provides. Thus it becomes eral stations, went further and asked Twen­ of my colleagues. But as this is not possible, I important to determine whether the sta­ tieth Century-Fox Television ("Fox">, would like to cite certain relevant findings here tions can obtain from the producer the "Since you are the 'seller', what Is the price music performing right, along with all of you would affix to the altered product [the refuting the key arguments advanced by the the other rights in a syndicated program syndication license including music perform­ proponents of music copyright reform. that are conveyed to the stations when the Ing rightsl?" In reply Fox made the entirely BLANKET UCENSE program Is licensed. As to "inside" music, valid point that since syndication licensing Mr. Speaker, the supporters of H.R. 3521 source licensing would mean that the pro­ without music performing rights had been claim that the blanket license, which is the ducer would either retain the performing the industry practice for years, it was Me­ method used throughout the world for music right and convey it to the stations, instead tromedia's 'responsibility to advise us in licensing, is somehow unfair, unreasonable, of following the current practice of assign­ what manner you would like' to change the Ing it to the composer and publishing com­ current arrangements. Notably absent from and monopolistic. In answer to these charges, pany, or reacquire the performing right all of the correspondence tendered by the the court stated the following: from the composer and publisher for con­ plaintiffs Is the customary indicator of a Once again we consider the lawfulness veyance to the stations. As to "outside" buyer's seriousness in attempting to make a under section 1 of the Sherman Antitrust music, source licensing would mean that the purchase-an offer of a sum of money. Act of the blanket license offered by the producer would have to acquire from the Judge Gagliardi properly declined to give American Society of Composers, Authors, copyright proprietor the performing right, any probative weight to the plaintiff's and Publishers <ASCAP> and Broadcast in addition to the "synch" right now ac­ transparent effort to assemble in the midst Music, Inc. <BMI>. The license permits the quired. of litigation evidence that they had serious­ licensee to perform publicly any musical Plaintiffs sought to prove that source li­ ly tried to obtain source licensing. He found composition in the repertory of the licensor. censing was not a re&llstic alternative by "plaintiffs" source licensing foray so dark­ In this litigation the blanket license Is chal­ presenting two types of evidence: "offers" ened by the shadow of the approaching trial lenged by a class of licensees comprising all from stations and analysis of the market. that its results may not be relied upon to owners of "local" television stations in the Prior to brlnging this lawsuit, the stations support either side. 546 F. Supp. at 292. e This .. bullet.. symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 5974 EXTENSIONS OF REMARKS March 21, 1986 Nevertheless the District Court concluded plied to a station's total revenue; the pro­ ing of music needed for their locally pro­ that source licensing was not a realistic al­ gram license rate is applied only to revenue duced programming . if the stations can ternative because the syndicators "have no from a particular program. realistically obtain direct licenses for local impetus to depart from their standard prac­ Second, the degree of difference between programming by offering reasonable tices and request and pay for television per­ the two rates is largely attributable to the amounts of money, they can avoid double forming rights merely in order to pass them stations themselves.