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Record companies that license songs to other online music vendors would have to make the same music tracks available to all competing services under a bill proposed in Congress Friday by Rep. Rick Boucher, D-Va., and Rep. Chris Cannon, R-Utah. The proposal isn’t likely to make it into law anytime soon, but it could increase pressure on the major record labels to strike deals with some of their online competitors. So far, the labels largely have held out against licensing their huge inventories to online services such as Napster. Instead, the record companies have partnered in two groups and formed their own download services, MusicNet and Pressplay. At a Capitol Hill press conference on Friday, Cannon and Boucher said they hope to pressure the record labels to allow competition, even if their bill does not pass quickly. “Just the introduction of our legislation will have a significant effect on which direction the industry is going to go,” Cannon said, standing next to Boucher and two of the leading lobbyists for online music services — Napster VP Manus Cooney and Digital Media Association Executive Director Jonathan Potter. The two lobbyists both heartily endorsed the bill, though Cooney said Napster would prefer an even stronger proposal to create a compulsory license that would force record labels to let any company sell any song at a price determined by the U.S. Copyright Office. Instead, the Boucher-Cannon bill proposes a model to prevent discrimination, similar to one applied in previous laws requiring cable companies to share music and other programming with competitors. Under the bill, if a record company made its music available for download only through a service that it wholly owned — for example, if AOL Time Warner’s Warner Music label sold songs over AOL — it would not be required to license songs to anyone else. But if a label entered a joint venture or partnership deal and licensed its music to that affiliated service, all unaffiliated services would have the right to license the same music under similar terms and conditions. “It’s not a compulsory license,” Boucher said. “It leaves the record company free at the end of the day to not license at all.” Speaking for the record labels, however, officials at the Recording Industry Association of America called the bill a “very bad solution” and promised to oppose the measure. “Many in the industry will fight this bill aggressively because we know that the marketplace is already moving in the right direction and that consumers will be served well by both the current and coming plans for online music services,” RIAA President Hilary Rosen said. The bill also includes the following other provisions to promote downloadable and streaming-music services: � Expanding current law allowing broadcasters and Webcasters to make one temporary copy of a song so that multiple copies can be made. That would allow Internet services, for example, to cache copies of songs on servers around the Web in order to speed download times. � Allowing stores and online music sellers greater freedom to offer short 30- to 60-second samples of music for sale. � Streamlining the existing system of collecting and paying royalties to music-copyright owners. � Requiring direct payment to artists of royalties for use of sound recordings. Current law requires that artists and recording companies share the royalties, but all money is paid directly to the companies. The bill requires that the portion of the payments destined for artists be paid directly to the artists or a collective established on their behalf. Related Articles from The Industry Standard: Court Deals Webcasters a Royal(ty) Blow Experts: Most Code Red Attacks Coming From Asia Up and Down on the Worm Beat Copyright � 2001 The Industry Standard

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