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Consumer groups and satellite radio providers held a press briefing Tuesday to protest proposed legislation that would require most temporary copies of songs made on computers and consumer products to be licensed and paid for regardless of why the music was downloaded.
Overall, the groups back the proposed law, which seeks to simplify licensing of online music. But they protest language in the bill that would require temporary copies of downloaded songs to be licensed and often paid for, saying such restrictions would stifle technological innovation and prohibit consumers’ fair use of songs.
XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. oppose the bill because it would force them to pay royalties on songs recorded on devices by their subscribers on top of licensing fees the companies already pay music companies. The U.S. Copyright Office in May testified before a House subcommittee on similar legislation and advocated a “statutory exemption” for these so-called intermediate copies.
The bill does include exemptions for the use of so-called “cache or buffer copies,” referring to temporary versions of songs on computers. But those exemptions wouldn’t apply to recording devices or satellite radio providers, who use temporary copies of songs when they stream music to their customers.
The House Judiciary Committee is scheduled on Wednesday to make final changes to the Copyright Modernization Act of 2006 before it is sent to the full House for a vote. The bill’s sponsor, Rep. Lamar Smith, R-Texas, said the proposed changes are needed to bring copyright laws into the digital age.
“This bill encourages innovation by making it easier for music providers to make more music available to consumers,” Smith said Tuesday.
At the briefing Tuesday, Gary Shapiro, president and chief executive of the Consumer Electronics Association, said the bill goes too far in expanding the concept of a copyright violation and would be detrimental to many of CEA’s 2,100 members, including product manufacturers like AudioVox Corp. and retailers, such as Best Buy and Circuit City.
“The bill is not yet ready for prime time,” said Michael Petricone, senior vice president of government affairs at the CEA.
Gigi Sohn, president of Public Knowledge, a Washington-based consumer advocacy group, says Smith’s bill and others similar to it are being misused by recording industry lobbyists who “want to take away consumers’ right to record… that is their ultimate goal.” A Smith spokesperson disagreed.
The recording industry is suing XM over the company’s iPod-like device that can store up to 50 hours of music. XM in July asked a federal judge to throw out the lawsuit because it says the 1992 Home Recording Audio act protects copies of songs recorded on its $400 handheld “Inno” device. That law bans some copyright claims against equipment makers and consumers who make digital music recordings for private use.
The largest record labels filed the lawsuit in New York in May, accusing XM of “massive wholesale infringement” because the Inno can record hours of music and automatically organize recordings by song and artist.
The recording industry has countered XM’s motion to dismiss, and the Washington-based company will respond by the end of the month, Chancellor Patterson, vice president of corporate affairs at XM, said Tuesday.
Shares of XM dipped 57 cents, or 4.1 percent, to close at $13.31, while shares of Sirius fell 25 cents, or 6.1 percent, to finish at $3.86 and Audiovox slid 13 cents to $14.65, all on the Nasdaq.
Shares of Best Buy Co. Inc., lost 49 cents to end at $53.61, while Circuit City rose 22 cents to end at $26.29, both on the New York Stock Exchange.
