Copyright and Technological Change

The subcommittee met, pursuant to call, at 10:35 a.m., in room 2226, Rayburn House Office Building, Hon. Robert W. Kastenmeier (chairman of the subcommittee) presiding.

Present: Representatives Kastenmeier, Mazzoli, Schroeder, Glickman, Moorhead, DeWine, and Sawyer.

Staff present: Michael J. Remington, chief counsel; Deborah Leavy, counsel; Thomas E. Mooney, associate counsel; and Audrey K. Marcus, clerk.

Mr. KASTENMEIER. The subcommittee will come to order.

Today, we inaugurate a series of oversight hearings on copyright and technological change.

In about 55 B.C., the Greek philosopher Heraclitus observed that "nothing endures but change." The proof of that statement is its truth today.

In our age, however, technology has accelerated the pace of change far beyond what Heraclitus might have dreamed.

It is easy to forget that the movie industry is only about 70 years old; the television industry is reaching its fourth decade; and communications satellites are in comparison mere infants.

We, as a society, are entering a new age. The fundamental shift from an industrial to an informational society is no longer just a prediction but is becoming a reality.

The majority of the American work force is engaged not in the production of goods but in the creation, processing, and distribution of information.

Expanding information technology, from computers to satellites, from television to teletype, insures that we will become even more of an information society in the future.

In this new society, it is predicted that information will be a key resource-the new capital. As the economic importance of informa tion increases, the law of information-intellectual property lawassumes a critical function in shaping the new society.

Similarly, the first amendment, which insures that both our country and our governmental system are free and relatively open, occupies a central role.

We live in a society where creative ideas and thoughts are meant to compete with each other. Every resident of this country benefits from this relative openness.

Indisputably, the goals of Government are to preserve fundamental civil liberties and human rights, to insure equality among all citizens, and to protect private property.

As relates to intellectual property law, a key question is how should these goals best be reconciled. In this important regard, this subcommittee not only has jurisdiction and expertise in the area of copyright but is also competent to handle diverse civil liberties issues.

Not long ago, this subcommittee, with the assistance of able academicians, lawyers, and other distinguished experts, revamped the Copyright Law of 1909. The fruit of that labor was the Copyright Revision Act of 1976.

Yet, just a few Congresses later, science has advanced beyond what was then barely on the horizon. Today, several bills before the subcommittee attempt to accommodate some of these technological developments. Pending before us are bills which would extend copyright protection to semiconductor chips, mask works, and computer software; which would set forth a legal framework for home taping; which would modify the first sale doctrine for audio and video rental; and which would delineate rights in the area of cable television. We plan to address some of these issues in separate legislative hearings.

The semiconductor chip legislation will be the first to be considered at a field hearing in San Jose, Calif., on July 30, to be followed by another day of hearings back in Washington, D.C. on September 28.1

Record rental legislation, S. 32 and H.R. 1027, will be the subject of further hearings on October 13; 2 and video rental legislation, H.R. 1029, will be the subject of a hearing on October 27.

Cable television reform will be scrutinized by the subcommittee on October 20.

The subcommittee may also schedule a hearing on home taping during the fall period.

As we consider these bills, however, we must concern ourselves with larger issues. How should copyright law respond to technological change?

Should copyright law accommodate changes initiated outside the law, or should copyright law attempt to delay change by preserving existing rights?

How should the legal dividing lines be drawn between the sometimes competing demands of consumer and proprietor?

It goes without saying that Congress has an important role to play in answering these questions. What we do not know in this regard is what role should be played by other governmental entities within the executive and legislative branches.

Should new bureaucracies be created to solve problems or to reallocate resources?

'Hearings were actually held August 3 and December 1, 1983, in Washington, D.C. Hearings held October 6, December 13, 1983.

In a time of finite budgetary resources, we must ask how much taxpayer money should be spent in the pursuit of legislative goals. As the subcommittee with oversight responsibilities for the Federal judicial branch of Government, we know that the courts are overburdened by heavy caseloads and by the complexity of litiga

tion.

With judicial review being a common feature of all copyright legislation, we need to know more about the role of courts in this area. Are courts doing a good job, or are specific issues that arise in the area of copyright and technology not amenable to judicial resolution? The Universal v. Sony litigation immediately comes to mind.

In short, the purpose of our hearings today and tomorrow is to refine these preliminary questions and to develop a body of knowledge and understanding that Congress can draw upon in the years

to come.

Technology has accelerated what already has been referred to as the "ever whirling wheel of change," so that it is not enough to react to past events.

As Members of Congress, we must fulfill our role in helping to shape it for the betterment of all Americans.

I might also state parenthetically that this subcommittee has doubled in size, which accounts for the additional chairs before us. Nine members of this 14-member committee were not members of the subcommittee in the last Congress when we considered matters relating to copyright. I would hope that during the course of these hearings nearly all, if not all, members of the subcommittee will be in attendance.

Leading off, our first witness this morning is Dr. Benjamin Compaine, executive director of the program on information resources policy at Harvard University.

His career is as an observer in the communications industry. He is the author of six books on the subject. His current work focuses on the implications of changing technology, regulation, and economic and cultural factors for policymakers in industry and in Government.

Dr. Compaine, if you will please come forward, we are very pleased to greet you and have the benefit of your expertise. We have your statement and you may proceed from it, or however you care to.

TESTIMONY OF BENJAMIN M. COMPAINE, EXECUTIVE DIRECTOR, PROGRAM ON INFORMATION RESOURCES POLICY, HARVARD UNIVERSITY

Mr. COMPAINE. Thank you, Mr. Chairman.

It is my understanding that I was asked to testify today not as an authority on copyright but as a futurist. Futurist, however, has a vague, blue sky ring to it, and I do not presume to predict or know the future. Instead, I will try to lay out some of the forces and trends put in motion by the rapidly changing communications technology that you just described; and then suggest some of the possible policy implications of these developments.

My objective is to provide a context for your subsequent discussions of copyright. I have submitted a formal written statement which I request be included in the record of this hearing.

Mr. KASTENMEIER. Without objection, your formal statement will be received in the record.

Mr. COMPAINE. There was, not too long ago, a much simpler era in the media industries when a newspaper was a newspaper and television meant whatever the home receiver was able to pick up from one of the three commercial networks on the air.

Cable operators merely brought a piece of wire into the home so the same video image of what the networks were broadcasting might come in sharp, or come in at all, for many users.

By contrast, in the 1980's, participants in the media and allied arenas are facing a rapid change in technology and a blurring of the distinctions that have characterized the individual media.

For instance, the television set at home is being used for private showing of theatrical films or for displaying output from a distant computer; homes with cable service are able to view programing that is not available on the old line networks or, for that matter, anywhere off the air.

The talk today is of "narrowcasting," that is, special interest programing for identifiable market segments rather than the broadcasting which tried to appeal to the greatest mass of recipients.

The changing environment that makes a precise definition of the media arena difficult simultaneously creates a potential for new opportunities for those involved in the media industry.

It also should alert us to the possible entry of new competitors, such as computer firms and telephone companies, which have not been traditionally viewed as being in the media business or associated with what we call intellectual property.

This, then, may lead to new areas of conflict, not only in the marketplace, but among Government regulators seeking to identify their territories and the new forms of media and the participants. The nature of such opportunities and threats is illustrated in some maps of the information business, which are included with my written testimony.

Since 1930, the center of this map, on pages 6 to 8 of that testimony, has become filled with businesses that have elements of content as well as processing and transmission of the content.

Today, the information business is composed increasingly of convergent industries, and the media industry is converging with previously distinct industries.

Given that terms that describe the media today, such as television or magazine, evoke connotations in most of us that may inhibit conceptualizing about the future of the media environment, our program has a classification that we try to substitute for those conventional terms.

The goal was to find a simple, yet comprehensive framework that could classify the various roles and functions of traditional as well as newer technologies we have called the media.

The framework combines pragmatic simplicity with reasonable inclusiveness, it includes three primary components: content, process, and format.

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