reservations," such as the performance of musical works as part of religious services or by military bands in certain limited circumstances.'

The current language of section 110(5) of the Copyright Act exempts the communication of a transmission embodying a performance or display of a work by the public reception on "a single receiving apparatus of a kind commonly used in private homes" (emphasis added), unless a direct charge is made or the transmission received is further transmitted. An ad hoc group of experts assembled by the U.S. Department of State to evaluate the Copyright Act in advance of U.S. adherence to the Berne Convention viewed the current section 110(5) exemption as consistent with Berne largely because of its narrow focus on the single receiving device common in home use. The ad hoc group based its assessment on World Intellectual Property Organization guidance on the intent and proper interpretation of Article 11bis:

In places where people gather (cafes, restaurants, tea-rooms,
hotels, large shops, trains, aircraft, etc.) the practice is growing of
providing broadcast programmes.... The question is whether the
license given by the author to the broadcasting station covers, in
addition, all the use made of the broadcast, which may not be for
commercial ends.

The Convention's answer is "no." Just as, in the case of a relay of a broadcast by wire [cable], an additional audience is

1 Guide to the Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971), World Intellectual Property Organization, WIPO Pub. No. 615(E) at 65 (1978) (hereinafter "WIPO Guide").

2 Final Report of the Ad Hoc Working Group on U.S. Adherence to the Berne Convention, reprinted in 10 Colum.-VLA J.L. & Arts 513, 528-529 (1986).

created, so, in this case too, the work is made perceptible to
listeners (and perhaps viewers) other than those contemplated by
the author when his permission was given. Although, by definition,
the number of people receiving a broadcast cannot be ascertained
with any certainty, the author thinks of his license to broadcast as
covering only the direct audience receiving the signal within the
family circle. Once this reception is done in order to entertain a
wider circle, often for profit, an additional section of the public is
enabled to enjoy the work and it ceases to be merely a matter of
broadcasting. The author is given control over this new
performance of this work.'

By amending the scope of the existing section 110(5) exemption to delete the reference to apparatus of kind commonly used in private homes and to allow -- if not encourage -- the use of multiple receiving devices, H.R. 789 and similar proposals appear to exceed the bounds of accepted and acceptable minor reservations. In practice, such an overbroad exemption would serve to deprive music creators and copyright owners of rights and royalty payments to which the Berne Convention dictates they should be entitled.

Moreover, the resulting harm would not be limited to the loss of domestic revenues. Nations that follow the accepted view on minor reservations can be expected to criticize the approach reflected in H.R. 789 and to point to it in defense of Berne-incompatible provisions in their own domestic laws. Of equal concern, a broadened exemption in U.S. law could serve as an unfortunate "model" for other countries' legislative reforms and could ultimately reduce royalties earned in foreign markets. As the Committee is well aware, the

3 WIPO Guide at 68-69.

copyright industries -- of which music is an important part -- post one of the most significant positive contributions to the U.S. balance of trade.

Finally, we are concerned that failure to satisfy Berne Convention obligations will subject the U.S. law to challenge under the terms of the World Trade Organization ("WTO") Dispute Settlement Understanding. The United States, through three Administrations and with bipartisan Congressional support, worked hard to see Berne Convention standards of copyright protection backed up by the "teeth" of an international enforcement mechanism. This was accomplished through the Agreement on Trade Related Aspects of Intellectual Property ("TRIPs") concluded as part of the Uruguay Round. It makes no sense now for the United States to take legislative action that so blatantly scoffs at both the Berne Convention and the WTO dispute resolution process that will serve as the mechanism for enforcement of TRIPS obligations.

H.R. 789 would do incalculable damage to the interests of America's writers and owners of copyrighted music. In NMPA's view, the bill stands to prejudice the position of the United States in seeking improved levels of intellectual property protection in foreign markets and would expose our nation to international criticism and even sanction for failure to satisfy our obligations under the Berne Convention.

H.R. 789 is not about "fairness." It is about breaking well-established international rules. We urge members of the Committee to consider the

implications of pending music licensing proposals not only on music users, but on

the legitimate interests of music creators and copyright owners, domestically and

abroad.

It is an honor and a privilege to be invited to testify before this committee on H.R. 789, the Fairness in Musical Licensing Act of 1995. My name is Rick Rule, and I am a partner at the law firm of Covington & Burling. Prior to joining the firm, I served in the Antitrust Division of the Department of Justice from 1982 until 1989. From late 1986 until I left the Department, I was the Assistant Attorney General in charge of the Division. Among the responsibilities

of that job is the enforcement of the consent decrees against ASCAP and BMI, and, during my tenure, I had the "pleasure" of wrestling with various issues under those decrees.

I appear before the committee in what, for a lawyer,

-

I am representing no client.

is a somewhat unusual role The views I express are my own and not those of my partners or our clients.

Nevertheless, the Committee should note that on

behalf of our client, the National Football League, my partner Neil Roman has submitted a statement for the record. In that statement, the NFL makes the altogether sensible recommendation that a bill such as H.R. 789 that purports to address fairness in musical licensing should be carefully focused on non-dramatic musical works and should not (as H.R. 789 currently does) sweep other copyrighted works, such as