A soccer mom in suburban Richmond is able to do price comparison on a new refrigerator, plan a family vacation, find a support group for her child with special educational needs, and even do her shopping.

All of the members of this committee are committed to promoting electronic commerce. We want to preserve consumers' privacy, protect security, and we want to promote the deployment of bandwidth, but let's be clear about what this is all about. It is about information and consumers' apparently insatiable demand for it.

That is why today's hearing is so important. This hearing will address a bedrock issue: Who will control information in the information age? On the one hand, we need to make sure that the compilers of information have sufficient incentive to engage in their difficult, but essential, work.

But at the same time, we need to make sure that we do not lock facts up; that we do not give anyone monopoly control over facts, for if we were able to do that, we would greatly restrict the ability of new firms to create innovative databases incorporating those facts.

As a practical matter, this would limit many of the wonderful uses of information the Internet permits. How do we achieve this delicate balance? Does existing law get it right or is some fine-tuning necessary? Can this fine-tuning be accomplished in a manner that does not run afoul of the first amendment of the Constitution or copyright laws?

My own view is that some targeted fine-tuning is needed, and it is for that reason that I introduced H.R. 1858, the Consumer and Investor Access to Information Act of 1999. I will be interested in hearing from today's witnesses whether H.R. 1858 embodies the appropriate approach for attacking this complex issue. Again, Mr. Chairman, thank you for holding today's hearing, and I yield back the balance of my time.

Mr. TAUZIN. Thank you. The Chair is now pleased to recognize the ranking minority member of the subcommittee, Mr. Markey, for an opening statement.

Mr. MARKEY. Thank you, Mr. Chairman, very much; and I would like to commend you, Chairman Tauzin, for calling this hearing today.

Mr. Chairman, the legislation that is the subject of today's hearing is an attempt to strike an appropriate balance between two important goals. The first goal is to halt the outright theft or misappropriation of databases. Individuals and entities spend time and effort to compile facts into databases, and their efforts should be legally protected from theft or misappropriation. I think everyone agrees with that basic concept.

The second goal is to ensure that in protecting against misappropriation, that Congress does not unwittingly stifle commerce, legitimate research and creativity. This country's economic future depends upon our Nation's ability to capture the lion's share of information-age jobs. If we thwart the ability of creative entrepreneurs to obtain and use facts to create new products, we are hurting our prospects for generating the knowledge-based markets we will need for job growth in a post GATT, post-NAFTA world.

Balancing these two goals is no doubt going to be a difficult task. Yet addressing these issues is an undertaking that this committee and this Congress must press forward on in order to put appropriate legal protections on the books for marketplace participants, and these protections should serve to both safeguard property from piracy and encourage competition in the electronic environment for

our consumers.

Not surprisingly, the effort developed in this committee to balance these two legitimate policy goals treats databases as key items in electronic commerce, and recognizes that two or three people or 200 or 300 people can utilize exactly the same underlying data yet attempt to create distinctive new products.

This ability to utilize the same facts and to create new innovative services of products will be at the heart of our new electronic economy. Obviously, the people who create new databases or services from those root facts will want protection against piracy and misappropriation, and they should get that protection.

Creative expressive elements or originality should be permitted copyright protection because this is the appropriate role for copyright protection. However, such copyright protection should not extend to the underlying facts themselves.

Today we will hear from an expert panel, and I think that the panel will help us to better fine-tune the balance struck in the bill introduced by the chairman of the committee, Mr. Bliley; and I hope that by the end of the day each member of the committee will have a far better understanding of what ultimately a final piece of legislation should look like. I thank you, Mr. Chairman.

Mr. TAUZIN. Thank you, Mr. Markey; and the Chair is now pleased to recognize the Vice Chairman of the subcommittee, Mr. Oxley, from Ohio.

Mr. OXLEY. Thank you, Mr. Chairman. Before I make my opening statement, I would like to congratulate the new free throw champion for the House of Representatives, the last free throw champion of this century, the gentleman from Massachusetts, who converted 46 out of 50, one short of the record, I might point out, but still a very strong performance.

Mr. TAUZIN. Would the gentleman yield.

Mr. OXLEY. I would be glad to yield.

Mr. TAUZIN. We don't want any of you publishing that information.

Mr. OXLEY. My thanks to Chairman Bliley for H.R. 1858. This legislation is the next logical step for the law in the digital age. We are dealing with new digital technology and its use on the Internet. That invention has become the social phenomenon that will no doubt symbolize this decade.

Never before has it been so easy or so profitable to copy the intellectual creations of another. The bill is a fine addition to copyright law, bringing digital media under the legal concept that has stood for decades.

Despite the modern nature of the technology we consider today, the problem is as old as squatters in the old West who claimed land as their own. Sometimes you need a digital sheriff and a digital posse to keep everyone in line. I don't worry that we will have less information as a result of this bill. Those that create databases

deserve some modicum of protection of their work; that is what we seek to provide.

My committee, Finance and Hazardous Materials, will soon hold a hearing on title II of this legislation which specifically addresses stock data. We look forward to that in a few weeks. With that, I yield back the balance of my time.

Mr. TAUZIN. The Chair thanks the gentleman. The gentleman from Illinois, Mr. Shimkus, is recognized for an opening statement. Mr. SHIMKUS. Thank you. As we found out last week in the markup of H.R. 10, database security, sharing information, trademark infringement, and privacy are at the core of the debate of the future. Hence, the importance of this meeting and this hearing.

I would like to take this time to personally extend my welcome to one of my almost-constituents, Mrs. Phyllis Schlafly. While she technically lives in Missouri, she rose to prominence as a leader of the conservative movement in south western Illinois. Phyllis, welcome to the hearing.

I apologize for missing the majority of the hearing, as I am scheduled to work on the House floor as Chairman of the Committee as a Whole, and with that, Mr. Chairman, I yield back the balance of my time.

Mr. TAUZIN. I thank the gentleman.

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. Chairman: This hearing on electronic database collection brings us across the threshold of the undefined legal area of the Internet.

As all of us who use the Internet on a daily basis knows, the remarkable growth of the Internet has largely been based on the lack of legal encumbrances and the lack of multi-layered tax structures.

The Internet is the democratic dream of pursuing and making use of information as the individual sees fit. But the question needs to be asked: What propriety interests do web sites and database collectors have from having the brunt of their offering to the public copied?

What are public facts that are free to retrieve and what does creative originality really mean in the world of the Internet?

The Committee staff has given us a news story detailing the use of the New York Times bestseller list by Amazon.com and the resulting litigation from its use. I hope the witnesses address the case and give us their view on whether the bestseller list is a propriety property or whether it is a public fact.

I know I have seen other newspapers in the country use the New York Times bestseller list. Have they done so on their own or have they engaged in a contractual relationship with the Times to do so? If Amazon.com or other web sites are prevented from using the list, do they have the legal protections to copy the Times list and use it on their own site and list it as a "Famous Newspaper Bestseller List." Where is the law in this regard or where should it be through new legislation?

I appreciate the work of Chairman Bliley in introducing a constructive bill that attempts to seek the middle ground in this area of database collection.

PREPARED STATEMENT OF HON. BARBARA CUBIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WYOMING

Thank you, Mr. Chairman, for holding this legislative hearing on H.R. 1858, the Consumer and Investor Access to Information Act of 1999.

This is a very timely hearing as the Subcommittee continues to wrangle with issues related to the Internet and the information age in general.

It is also timely in the fact that we have all heard so much lately about the dispute between the New York Times and Amazon.com.

Because of the fact that this industry evolves at the speeds in which it transfers information, it is extremely important that the Subcommittee consider legislation that moves and adapts just as quickly.

It is certainly my belief, and has long been the philosophy of many of the members of the Subcommittee, that regulating the Internet and the information gathered and disseminated on the Internet will only harm this vibrant medium.

Where would Amazon.com, Yahoo!, Netscape, and other online companies be if the sharing of information and data was stifled or limited in any way?

H.R. 1858, I believe, walks that fine line in addressing what is currently at issue, the misappropriation and piracy of databases, without delving into issues that may or may not come up in the future.

To continue to keep information databases robust and allow investors to feel reasonably secure that databases are protected, Chairman Bliley's bill provides a distinction between the facts and information that reside in the public forum and how that information should or should not be shared and/or protected.

Ideally, it should be the marketplace-not government regulation or legislation— that governs the information industry.

Absent that, H.R. 1858 is a reasonable solution to this problem. Chairman Bliley should be commended for putting this initiative forward.

Thank you, Mr. Chairman, I look forward to hearing from our witnesses and yield back the balance of my time.

PREPARED STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Thank you Mr. Chairman for holding this hearing on database information, the internet, and the future of electronic commerce and access to information.

The internet is the network connection of the thousands of different databases in our country and throughout the world. The internet has become a part of our everyday lives. We use the internet to accomplish everything from reading newspapers to researching specific issues to searching for the scores of our favorite sports_teams. Everyday millions of Americans use a search engine such as, America-On-Line or Yahoo to access the thousands of different databases. Without any databases to provide this information the internet would have never succeeded and we would not have the thriving economy or the information explosion that we have today.

Accessing information on the internet is vital for our schools to maintain the open access to educational materials and resources. Schools spend thousands and thousands of dollars on purchasing access licenses to these materials. If we go too far in protecting information and databases will that hinder the access to educational materials or the growth of the internet?

We are living in a digital age, where access to information is vital to the continued growth of the internet. We do need to create a balance in this area. We need to protect the work, the thousands of hours it takes to compile and input information that companies have put into developing these databases, while fostering the competition and access necessary to keep the internet growing.

Again thank you Mr. Chairman for holding this hearing.

PREPARED STATEMENT OF HON. THOMAS C. SAWYER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO

Mr. Chairman, I want to thank you and the Ranking_Member, Mr. Markey, for holding this legislative hearing today on H.R. 1858, the Consumer and Investor Access to Information Act. I also want to thank our witnesses for coming to testify on the merits of this legislation.

Intellectual property has been the driving force for innovation and economic growth in the United States from the very beginning. In fact, it is what has given us a basis and backbone to sustain a democracy. Accordingly, at various points in our history, there has come a point where there has been a pressing need to modify our national and international intellectual property policies. We are, once again, at a turning point in modernizing those laws for the digital era.

Contemporary technology has made it easier for copyrighted materials to be pirated. Capturing such information and widely distributing it without the consent of the author is illegal and should continue to be. However, the Internet has also given us a means of instantly tapping into information databases for a myriad of purposes-from comparing prices of airline flights to getting the most up-to-date information on medical treatments. In many instances, the publisher of the database that was used as a search engine would like to have some copyright protection for

the information they collected. However, the Supreme Court ruled earlier this decade that copyright protection does not apply to databases that do not contain creativity or originality; facts, ideas and discoveries are not protected. Therefore, what used to have copyright protection because of a publisher's time and the amount of financial investment that was put into the database no longer applies.

Under H.R. 1858, pirating copyrighted material would still be unlawful. The legislation would also make it illegal to duplicate an existing database and using that information to compete against the database's creator. I recognize the need to strike a balance with respect to giving database publisher's protection. However, there is an area that I think needs further clarification. If the average citizen took a database or parts of a database from another source, newspaper or magazine, and downloaded to their personal web page, not for competing against the company who created the database, would that person be in violation of the law under H.R. 1858? There seems to be some confusion with this provision, and I think we need to clarify that a little more for everyone.

I would also like to make a point that the opponents of this legislation object to the provision that requires them to seek recourse with the Federal Trade Commission if they believe their information has been pirated or an entirely new database was not created using their information. I hope the FTC's authority does not supersede contractual agreements established between two parties, giving database publishers the ability to also seek legal recourse through the courts.

Mr. Chairman these are a few points I wanted to mention. Once again, thank you for holding this hearing this morning. As we all know the Internet has profoundly reshaped the way we do things. As I said before, I recognize there is a need to make modest changes to current law to reflect the Internet's capabilities. However, it would be a shame to regulate it to the point where basic information gathering and competition is stifled.

Mr. TAUZIN. I understand that Chancellor O'Brien is on his way down. We will proceed with the panel.

By the way, Phyllis, we are not going to keep you to the end, we are going to hear from you in the middle. We are anxious to hear all of your testimony. For the record without objection all members' written statements are made a part of the record, and for the record all witnesses' written statements are made a part of the record without objection. Which means that we would like you to summarize your statements, if you can, within what we call the 5minute rule and that little green and red light indicates when your time is just about up.

Please summarize within 5 minutes the very key points of your testimony in as conversational tone as you can so we can engage you in the dialog. We will begin by recognizing a frequent visitor to our subcommittee, Mr. Andrew Pincus, general counsel of the Department of Commerce.

STATEMENT OF ANDREW J. PINCUS, GENERAL COUNSEL,

DEPARTMENT OF COMMERCE

Mr. PINCUS. Thank you, Mr. Chairman. It is an honor to appear before the subcommittee on this very important issue related to our digital economy.

In the last Congress it was an honor under Secretary Daley's leadership to work with you on the WIPO implementation bill, and we think that bill was a tremendous achievement in leading the world on the appropriate way, as Mr. Markey said, to balance these two difficult interests; and we look forward to working with Chairman Bliley and the members of the subcommittee on this issue as it moves forward in this Congress.

The issue of database protection is a matter of great interest to a large number of Federal agencies for a variety of reasons. The government collects, manages, and disseminates massive amounts