Digital music firms' copyright fears

A House committee is looking at music and the internet

Digital music executives have told the US Congress that the country's copyright laws need overhauling if American consumers are to benefit from online music systems.

On Thursday the House Judiciary Committee heard complaints from RealNetworks and MP3.com that music publishing issues - the administration of song rights and royalties - were a "significant potential impediment" to music subscription services.

Music majors going online

MusicNet: EMI, Bertelsmann and AOL Time Warner

Duet: Sony Music and Vivendi Universal

MP3.com president Robin Richards asked the committee to enforce a flat royalty rate per song which would allow automatic use of any musical work.

But the criticisms drew protests from music publishers and songwriters, including country star Lyle Lovett.

One of the problems the music industry has had in allowing more music content online is the complexity of the copyright issues involved.

Royalty rate

Even when record companies and artists are willing to make music available online, the musical work has still to be licensed by the royalty collecting society or relevant music publisher - who may have to confer with the track's composer.

Lyle Lovett described the suggestion as "government price-setting" which would be "repugnant to those who believe in the free market and the sanctity of private property, including intellectual property".

Lovett told the committee that compulsory licenses were unnecessary because the American Society for Composers, Authors and Publishers (ASCAP) had already granted licences for the millions of songs it controls to every web site which had requested one, about 2,200 in all.

Representatives also treated Richards' proposal with caution.

'Fixing prices'

"Convenience of access to entertainment seems a particularly weak justification for allowing the government to fix prices," said Californian Democrat representative Howard Berman.

The hearing was an opportunity for representatives to hear about the systems which the music industry hopes will replace services like Napster and Gnutella.

The committee was shown a demonstration of MusicNet, an online service which is backed by AOL Time Warner, Bertelsmann and EMI.

Both MusicNet and its rival Duet, set up by Universal Music and Sony Music, are likely to offer streamed music - which has to be downloaded for each listen - and "tethered downloads" which would be licensed for a certain period, or number of uses.

'Monopoly'

It is likely such services would cost $10 to $15 (around £7 to £10) per month, with MusicNet due to open in August.

But some members of the committee showed concern that such an alliance of the music majors might result in what Mr Berman called "some sort of monopoly control" of music distribution.

Universal executive Edgar Bronfman Jr assured the committee that the company intended to license its music "broadly".