I do not, Mr. Chairman, but I appreciate you

having this hearing today, and your insight on...

Good morning, Mr. Chairman and Members of the

Committee. My name is Andrew G. Setos, and I am...

Mr. Chairman, Members of the Committee, the Library

Copyright Alliance, which includes the American...

My name is Tom Patton. I’m corporate Vice President for Government

Relations with Philips...

Thank you very much.

Our next witness is Leslie Harris, the Executive Director of the

Center...

Thank you.

Mr. Chairman, Mr. Inouye, Members of the Committee, on behalf

of the Center...

Well, I think you’re referring to his concern that distance

learning would be in some way...

Well, if the university is engaged in a distance-education

program, the university library is...

That—charging fees?

No. In licensing regimes, on reasonable nondiscriminatory

terms, there are fees associated with...

Well, I think——

I think, in the first instance, it’s important for this

body to state what ‘‘permissible...

Pardon?

I’m worried about the development and the deployment

of those new technologies. The truth...

Mr. Chairman, first of all, my apologies for

being late.

I’m here because I’m interested...

Yes.

Mr. Setos, what would be the impact on the broadcast industry

if all patent rights...

I am well aware of the high-tech advancements

being made in the industry. And possibly this...

So, industry is willing to sit down with the content

producers.

Because you believe that their copyrights are legitimate?

And piracy is a legitimate threat.

Thank you very much.

As I understand it, the flag allows the receiver

of any content, be it movie, music, or whatever,...

Mr. Band, in the libraries, are we treating electronic

content different than print?

Yes.

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Rather than the government dictate a waiver for

specific entities, such as libraries and educational...

Do they pay for the books——

—printed material?

Why would we want to license that? Isn’t it for

public view, anyway?

Ms. Harris——

—would you like to comment on that? We’re trying

to sort this——

—thing out, where—you may comment.

Would you yield right there?

I’m informed the FCC took the position that the

copyright laws specifically provide the exceptions...

Thank you very much.

Well, I guess I’m—I’m not confused, I’m saying—

the technology does not allow them...

No.

I don’t think so.

That’s right.

No.

But even the TEACH Act requires that the content

sent on the Internet to distant-learning centers...

This concerns me, by the way——

—because——

—not only the Senator from Alaska has worked

on distance learning a long time, I have, too.

I do believe, though, that, in the context of the flag

regulation, if a library or an institution...

Yes?

Thank you very much.

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And the draft that I circulated

is a draft. And all of your comments are welcome, and

many...

Does it have any compensable value?

Could I interrupt?

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Are you talking about a one-time broadcast by a

blogger, or are you talking a building up of...

Isn’t the test whether the originator—the entity

that originated the program put it on the...

And the same thing with any broadcast of a——

—of a network program. It——

—goes on the Internet. Anybody can use it.

Now——

—what you’re talking about is——

—developing technology that would store that

stuff and make it available to someone else,...

Thank you, Senator.

That’s right.

Well, it’s an administrative process, so, comments

were submitted, there were meetings, and...

No. But I would submit that even if the kind of language

that you’ve put in on the digital...

You’re responsible to——

Or I would go a step further. Not just the marker. I

would say that you should set forth, these...

No, not at all, because there’s two parts to what we’re

seeking. One is that certain kinds...

And there’s——

Right.

Right.

That’s right.

Well, as I said, we—my colleague and I came up with

this idea about five and a half years...

Well, we——

—we certainly won’t see creative material on—highquality

material on local broadcast stations....

No, they are not all built with the flag. The court

threw out the regime prior to the date by...

Thank you very much.

Senator Nelson?

STATEMENT OF HON. E. BENJAMIN NELSON,

U.S....

You’re saying an alternative to the flag, or an alternative

to the current 13 that have been——

I mean, the alternative to the flag is vigorous enforcement

of the copyright laws, getting your...

Right.

Well, I think that’s right, but I think it’s important

to understand that the FCC is a constantly...

Well, I think that the Senate can do that, and the

Congress can do that. Again, we were talking...

Not at all. I think there’s a way to address our concerns,

but, at the same time, not, in...

Thank you.

Thank you, Mr. Chairman.

Thank you, Mr. Chairman.

I really just have a couple of points that I would like to make.

Thank you, Mr. Chairman.

First, about the focus of this debate. And I think Senator Nelson

made...

Mr. Chairman?

I think Senator Sununu has given us a good history

lesson, and I think his history is right....

Chairman Stevens, Co-Chairman Inouye, Members

of the Committee, thank you for this chance to...

Thank you, Mr. Chairman, Mr. Co–Chairman,

Members of the Committee.

On behalf of the...

Thank you, Chairman Stevens, Co-Chairman

Inouye, and Members of the Committee. I’m Dan Halyburton,...

No. We think that’s great. The iPod is a phenomenal

device, and if you move your own CDs onto...

Actually—of course.

[Laughter.]

We’re talking about three services here, to conceptualize

them....

No. And, you know, Gary’s charming and compelling,

but often very misleading. The——

[Laughter.]

It’s...

Well, the——

—the key thing——

—in terms of recording, we don’t want to do anything

that’s different than current consumer...

—went to——

Right.

What we’re trying to do is this. If you listen to the

radio and manually record, as you can...

Mr. Chairman, can I ask a very specific question

here that speaks directly to your point?

Mr. Bainwol, if I’m listening to XM radio——

—and they play three songs in succession, and

I record all three songs, what you are saying...

That’s a very clear question.

If I have recorded—it’s a simple——

—very simple——

—hypothetical.

No. I’ve recorded three songs in succession.

Can I listen—do you object—do you oppose——

—my right to listen to one of those songs at a

particular time the following day?

Mr. Chairman, the answer to that question—

I think you understood the question—the answer...

—to those songs one at a time.

Right.

Right.

There is nothing wrong with that.

There are a series of problems. One is, when that

TV program is broadcast, the content owner...

At this time, no.

Yes, as written in our written and our oral testimony,

we’re ready to sit down with the various...

Yes. All of the broadcast companies are spending

tens of millions of dollars to make the transition...

Not at this point. We’re just really—as indicated,

just really on the beginning of this....

Yes, it’s kind of interesting. Usually, Mitch

and I are more debating issues. I’m a little...

Well, I think, as indicated, Senator Smith’s

suggestions are good ones, a step in the right...

—you know, I think there are some areas to

work on.

We’d like to go back and work on it ourselves

and see if we can’t figure that out. I think...

—those lines.

I think, again, providing we keep this discussion

straightforward and limited, and we don’t...

I thank you very much, Mr. Halyburton. You

mentioned this dialogue that has been developed between...

Yes.

And I look forward to your solutions. So, it

would be most helpful to the Committee...

Can I give you a timetable, Mr. Chair, if I can

jump in?

We have a schedule here of 14 hearings. When

they’re over, we intend to start marking up all...

They may come up with a solution.

Thank you very much.

Senator Smith?

Thank you, Senator. I would hope so. I’m not sure

that distinction is clear to us when we...

I respectfully disagree with that. We were part of

the development. As Mr. Setos would say,...

So, you disagree with my understanding of the

history.

And I—so, I appreciate you including that in the

record.

Mitch, do you have a comment...

Mitch, isn’t it also true that songwriters, in fact,

are paid when their songs are played...

And that’s copyright law, is it not?

And isn’t this the reason why an audio flag is

needed?

Or at least to incentivize you guys getting together.

Well, Mr. Halyburton, if different technology

could meet the needs of broadcasters without stranding...

I appreciate that. And so, you would agree with

me that we should not foreclose consideration...

Thanks, Mr. Chairman.

Thank you, Mr. Chairman.

I think that last line of questioning brought us into the area of

a...

That seems to me to be a little bit inconsistent,

given the technologies that we’re talking...

And the answer to my question is?

[Laughter.]

And do you think there should be a performance

right for regular over-the-air radio, as well?

And—I’m inclined to agree with you. It seems

to me this is a more important area to look...

Well, you may, certainly. And I understand,

though, you wish to make a distinction between music...

Well, the consumer, in the case of satellite

radio, is paying for the service, and, equally...

—and whether it’s over-the-air radio, HD radio,

satellite radio, or something else.

I...

Frankly, I don’t think that is at all relevant.

If you TiVo it, though, you’re viewing it,...

And that is, important, being—that is a royalty

that’s negotiated——

—based on the power of the system of distribution.

And——

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I’m sorry, in which case are you—what are you

speaking about here?

Oh, I thought you were back—I thought you

were talking about TiVo.

We were on TiVo.

No, but you are being paid by the provider of

the service in a way that is commensurate with...

—in the future——

Well—this is a little glib, but it’s the way the

markets work. Renegotiate. OK? Set a new...

And the compulsory nature of the license is,

once again, pointing the finger back at Federal...

—compete effectively in an environment where

we have these many different mediums. This isn’t...

Yes.

Let’s be real here. OK?

Thank you, Mr. Chairman, for indulging me—

there is no subterfuge going on here. We’re not...

We thank you for that.

One of the reasons we’re here is that there is not

equal treatment of the media, as far as...

A little busy. We might sit down and talk to

them about letting us handle some of these things...