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Mr. Rule is a respected member of the antitrust bar and a partner with

the Washington, DC law firm of Covington & Burling. He is a former

Assistant Attorney General who was in charge of the Antitrust Division at the

Department of Justice during the final years of President Reagan's second

term.

Mr. Barba is a hotelier from New Hampshire, and, I believe, a

constituent of Mr. Zeliff's.

Mr. Alger is a songwriter from Nashville and a member of ASCAP.

Mr. Epperson is Vice-Chairman of the National Religious Broadcasters

and is here with us today from North Carolina.

Mr. Berenson is with us today on behalf of BMI where he is the Senior

Vice President and General Counsel.

Mr. Tavenner is with us today from just up the road in Olney,

Maryland. He runs a restaurant named the Silo Inn and is appearing today on

behalf of the National Restaurant Association.

HOUSE COMMITTEE ON SMALL BUSINESS

FULL COMMITTEE HEARING ON MUSIC LICENSING AND SMALL BUSINESS

Opening Statement of Glenn Poshard

May 8, 1995

Madame Chairman, thank you for the opportunity to address the issue of music licensing and its affect on our nation's small businesses.

The introduction of H.R. 789, The Fairness in Musical Licensing Act of 1995, at the beginning of the 104th Congress has opened a flood gate of concerns from a number of my constituents on both sides of this issue. In my district, I have small business owners claiming unfair practices by licensing agencies, while songwriters have come to me concerning their critical need to be fairly and appropriately compensated for their time and talent.

It is also my understanding that all the parties involved in this debate have been involved in serious negations for the past year in an attempt to resolve this matter without major changes to the current copyright laws. I ask that we look closely at this agreement and evaluate its merits.

Madame Chairman, I also wish to welcome our distinguished panel of speakers whom I am sure will inform and enlighten the members of our committee as to the concerns on both sides of this issue.

Statement of Representative William H. Zeliff, Jr.

before the Committee on Small Business

“Music Licensing and Small Business”

May 8, 1996

I would like to thank Chairwoman Meyers for

holding this important hearing and would like to

welcome Steve Barba of The Balsams from Dixville

Notch, New Hampshire.

As a small business owner myself, with a country

inn in Jackson, NH, I know firsthand the arbitrary nature

of music licensing fees. I want to emphasize from the outset that I fully endorse the necessity for strong intellectual property rights protection in the music industry. Those who compose and perform musical works have every right to receive compensation for their

efforts.

At the same time, I am very concerned about evidence suggesting inconsistent, erratic and heavy

handed music license enforcement practices of leading music licensing societies. Under current law creators of music are allowed not only to collect fees at the source, but also along each step of the way. Collecting compensation from both a radio station that plays their music and the local tavern that keeps the radio on as background music, for instance, is pure double-dipping.

Moreover, there is mounting evidence that the

enforcement of contracts with the holders of these music

copyrights resembles a monopoly. Increases have been demanded despite existing contract terms, only "blanket" licenses have been offered, and the existence of a single court of appeal discourages dispute resolution which can bankrupt a small business.

As a result of all this absurdity, I have worked closely with my colleague, Representative Jim

Sensenbrenner from Wisconsin, to make music licensing

FAIR. Rep. Sensenbrenner's bill, H.R. 789 will allow

small businesses to play "incidental" or background music on radios or TVS without paying "licensing fees" (royalty fees paid to licensing organizations for the right to play music). Think about it, the last time you were at

your favorite diner for breakfast and you hear Michael

Jackson's latest hit song. Did you say to yourself, "Gee whiz, I hope this diner is paying Michael Jackson to play

pait this song while I eat my eggs!" I didn't think so.

Under current law, the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and other music licensing organizations can demand payment for almost any music played in a place of business, be it live or rebroadcast, and no matter how many times it has already been paid. This means that if any diner, hair salon, or other small business plays a radio or a television, a licensing representative can demand a royalty. That goes for music coming over boom boxes, and cassette and CD

players too.

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