1623 from Mr. Bohrer of AMOA. Outside the Berne Convention, there is no other truly effective umbrella within which the U.S. can emerge as a leader of international copyright matters. Mr. Chairman, Section 8 of your bill reflects the primacy of voluntary negotiations, with an option for a compulsory license. It is, in fact, the system in force between the jukebox industry and the performing rights organizations today. As a result, even though the compulsory license remains, because voluntary negotiations are stressed we believe that you have answered the incompatibility problem. The retention of such a compulsory license could be deemed either a "minor reservation" to marketplace negotiations which take precedence, or a conditional governmental review as is in effect in some Berne countries. Finally, Mr. Chairman, let me note for the record that BMI adopts the NCBC position that the moral rights provisions of H.R. 1623 are unnecessary, because the body of U.S. law as it currently exists provides sufficient protection for the moral rights mandated by Berne. On the subject of formalities, we also support the repeal of Section 411 of the Copyright Law because it imposes an impermissible formality on works of foreign origin-by requiring them to be registered before any infringement suit can be brought. We also agree with ASCAP's comments with regard to Section 14 of H.R. 1623. Again, thank you for this opportunity to testify. I would be happy to try to answer any questions. [The statement of Robbin Ahrold follows:] STATEMENT OF BROADCAST MUSIC, INC. ON H.R. 1263 AND THE ADMINISTRATION OF JUSTICE OF THE HOUSE JUDICIARY COMMITTEE February 9, 1988 Good morning Mr. Chairman and members of the subcommittee. My name is Robbin Ahrold and I am Vice President of Corporate Relations for BMI. I am accompanied by Alan Smith, Vice President of Research and our representative on the Jukebox Administration Committee, a working group that administers the 1985 agreement between the performing rights organizations and jukebox operators, and Gary Roth, Senior Attorney for BMI and our representative on the NCBC, the National Committee for the Berne Convention. At the conclusion of our statement we will be happy to answer any questions you have. BII appreciates this opportunity to testify on H.R. 1263, and more specifically the jukebox licensing provisions of Section 8 of the bill. As you The United States' world leadership in exporting musical works, as well as all other copyrighted material, demands that we be able to speak from a position of strength and play a leading role in international copyright matters, something which our absence from the Berne Convention now severely undermines. are aware, BMI has been a leader in advocating U.S. adherence to Berne. We believe that the writers and publishers that BMI represents will benefit greatly by the higher level of international copyright protection which Berne provides as well as by the extension of copyright protection into the two dozen countries who are not UCC members which our adherence to Berne Additionally, our joining Berne will eliminate the would bring. need for simultaneous foreign publication in order to gain protection under the Convention. This means that numerous small publishers and individual copyright owners, who could not afford to publish simultaneously in order to gain this so-called "back-door" protection, will now have their works covered by Berne, and an even wider range of musical compositions will receive full international copyright protection. BMI has sought this opportunity to speak mainly because the jukebox provisions of this bill are among the few remaining ones which do require some modification of the Copyright Law as currently written in order to gain Berne adherence. It has been accepted both by the Ad Hoc Working Group on U.S. Adherence to the Berne Convention, and the jukebox operators themselves, that the compulsory licensing provisions of Section 116 of the Copyright Law as they now exist are incompatible with the Convention, with respect to works of foreign origin. As such, some adjustment to them needs to be made. Given the long history of attempts by the jukebox industry and the performing rights organizations to forge a mutuallyacceptable solution to licensing, the outright repeal of Section 116, while it may be desirable, is just not practical. We believe, therefore, that the approach taken by the Chairman's bill is the most feasible way that the problem can be addressed and still accommodate the concerns of both parties. As the Chairman and members of the subcommittee know, BMI and the other performing rights organizations have, since 1985, been parties with AMOA to a confidential voluntary agreement. This agreement, in effect, supersedes any rates set by the Copyright Royalty Tribunal. BMI has gone on record in past hearings as being opposed to compulsory licensing for jukeboxes. We feel instead that the marketplace should determine rates. At the same time, the jukebox operators have strongly fought for the continuation of the compulsory license. The fact, however, that after years of acrimonious debate, a voluntary agreement could even come into being, itself manifests a compromise position. BMI and the other performing rights organizations agreed to be part of such an agreement because the plan which evolved envisioned a greater compliance with the law. This would have benefitted our writers and publishers. Even more significant, though, it allowed marketplace negotiating to become the primary focus of licensing. Mr. Chairman, in framing Section 8 of your bill, you have recognized that the primacy of voluntary negotiations, with a fallback to a compulsory license with rates set by the Copyright Royalty Tribunal is, in essence, a reflection of the current arrangement I have just described. Inasmuch as it effectively perpetuates a system already in place for 2-1/2 years, it is more a recognition of the parties' compromise position than a wholesale change in the law as applied. As a result, even though the compulsory license remains in the background, because voluntary negotigations are stressed we believe that it is likely that the United States could, if called upon to justify it, be able to consider the retention of such a compulsory license mechanism a "minor reservation" to the marketplace negotiations which predominate and thereby still meet the incompatibility argument. Alternatively, as the Chairman recognized in his Introductory Statement to the bill, the CRT-set rates could be considered a conditional government review as is in effect in some Berne countries, such as the Copyright Appeal Board for disputed public performance license fees currently used by Canada, for example. We venture to say the great desire of the world copyright community that we join Berne would allow us to rely successfully on either of these rationales. The AMOA opposes Section 8 because, they claim, they would be "forced" to enter direct negotiations to set jukebox rates. They are not comforted by a fallback compulsory license because, as they also claim, they might be "forced" into expensive binding arbitration. These objections have no merit. The provisions of Section 8 are permissive, not mandatory, and there is nothing in this bill that would "force" them to negotiate. Similarly, the arbitration provisions are entirely voluntary and cannot be enforced unless both parties agree. And, finally, the compulsory license as now constructed remains available if negotiations fail. In truth, what the jukebox industry fears does not emanate from this bill, but rather from your recognition of the superior value of negotiations. Perhaps arms-length bargaining will produce a higher license fee, but I bring to the Chairman's and the subcommittee's attention that at the same time that the jukebox industry is trying to convince you that Berne will write |