News

Jonathan Decker on May 11, 2018 | Protect Property Rights

By Holly Sadler

Several weeks ago, we highlighted the unanimous passage of the Music Modernization Act through the House Judiciary Committee. This was a huge step in finally revamping an out-of-date, inadequate system of copyright and intellectual property protection for the music industry.

Since then, the bill has been passed unanimously in the House and introduced in the Senate, with a key Senate Judiciary Committee hearing scheduled for Tuesday.

To recap, this bill brings together the vast majority of industry stakeholders (who rarely agree on copyright issues) and forms a consensus on how to address some of the most problematic and antiquated areas of copyright law negatively impacting the industry today.

If passed, the Music Modernization Act will:

  • Correct a loophole in the 1976 Copyright Act, which resulted in works created prior to 1972 being exempted from proper compensation under copyright law;
  • Create a songwriter database so songwriters can be fairly compensated for their work and those who play the music can easily identify who to compensate;
  • Realign the rate standard used to determine compensation for artists, incorporating a more market-based approach and including standards for digital music providers like Spotify, Pandora, SiriusXM, and others; and
  • Allow artists to voluntarily designate a portion of their royalties to producers, mixers, and sound engineers, creating a mechanism to do this easily.

These are all huge wins for intellectual property and copyright protections, as well as the free market. And they are a long time coming.

Throughout this process, it has been encouraging to see Members of Congress reject the small, but vocal, factions of opposition and efforts to undermine the purity of these reforms. These voices represent a viewpoint that private property does not exist and any effort to strengthen property rights must be fought. It is our hope that senators will follow the lead of their colleagues in the House, recognize intellectual property is a private property right protected by the Constitution, continue to reject efforts to undermine the reforms, and pass the Music Modernization Act in its current form.

Phil Kerpen on May 3, 2018 | Protect the Free-Market Internet

By Phil Kerpen

Rather than waiting until summer as originally expected, Democrats now say that on May 9 they will file a discharge petition to force a Senate vote on Massachusetts Senator Ed Markey's Congressional Review Act (CRA) resolution that would re-impose Obama-era public utility regulations on the Internet.  The rush is for one reason only: to exploit the medical absence of Arizona Senator John McCain.                          

With expected lockstep support among Democrats, the measure should require support from two Republicans to command a majority.  But there is only one Republican, Maine's Susan Collins, expected to line up with Democrats – so Democrats are hoping to pass the CRA 50-49 before Senator McCain is healthy enough to return to Washington.

In a letter to constituents, McCain makes clear he opposes the Markey CRA, and for good reason:

As you may know, on February 26, 2015, the Federal Communications Commission (FCC) voted to approve a 317-page plan to regulate the Internet by reclassifying broadband as a telecommunications service under Title II of the Communications Act. The Commission’s party-line vote, spearheaded by Obama administration officials, dramatically increased the government’s role over our nation’s broadband by treating the Internet as a public utility under federal regulations. Since that time, FCC Chairman Ajit Pai, announced his initiative to eliminate unnecessary regulations within the agency. On December 14, 2017 the FCC voted to repeal these rules.

Over the last two decades, the Internet has flourished under limited government oversight. When the FCC took this action in 2015, I said, “I am disappointed by the FCC’s vote today, a move that, in the name of so-called ‘net neutrality,’ drastically increases the government’s role over our nation’s broadband – an effort I have long opposed.” I continue to believe in a hands-off approach to the internet, and support the decision to roll back that action. Allowing the internet to thrive without burdensome regulations is the best stimulus for our economy.

He is exactly right.

These regulations – widely misreported as protecting net neutrality, despite the fact the D.C. Circuit Court of Appeals found the rules expressly allow blocking and filtering of web traffic – were designed by a highly politicized "shadow FCC" inside the Obama White House and forced through the FCC over the objections of the agency's own experts. The FCC chief economist at the time, Tim Brennan, called them "an economics-free zone."

The Obama regulations imposed a 1930s public utility regulatory model on the Internet Service Providers (ISPs) that subjects every new product, service, and business arrangement to regulation and potential prohibition by the FCC Enforcement Bureau subject to an undefined so-called Internet Conduct Standard – while completely exempting the edge providers, Google and Facebook.  The principal effect of the Obama regulations therefore, beyond depressing investment, was to insulate the biggest Internet companies – which are also massive Democratic campaign contributors – from potential competition from ISPs in their core advertising business....

Jonathan Decker on April 12, 2018 | Protect Property Rights

By Holly Sadler

Yesterday, the House Judiciary Committee voted 32-0 in favor of the Music Modernization Act. We’ve written about the Music Modernization Act before, but to give you a brief recap, this bill brings together the vast majority of industry stakeholders (who rarely agree on copyright issues) and forms a consensus on how to address some of the most problematic and antiquated areas of copyright law that negatively impact the music industry.

It allows for the creation of a songwriter database, so songwriters can be fairly compensated for their work and those who play their work can easily identify who to compensate. It also re-aligns the rate standard used to determine compensation for artists to incorporate a more market-based approach and extends this standard to digital music providers like Spotify, Pandora, and others. A huge improvement over the current government price control system that has kept rates artificially low for years.

Additionally, it frees up creative artists to voluntarily designate a portion of their royalties to producers, mixers, or sound engineers and creates a mechanism for this to be done easily. Finally, it corrects a loophole in the 1976 Copyright Act that exempted works created prior to 1972 from being fairly protected under copyright law. Under this bill, classic artists and their copyright holders would finally be compensated – just like contemporary artists – for their works under the new market-based compensation standard.

These are all huge wins for intellectual property and copyright protections. And they are a long time coming. The Music Modernization Act is truly a rarity in today’s climate, bringing together Republicans and Democrats, internet companies (including streaming services), licensing organizations, creative artists, and publishers, unions and free-market advocates. With so many in agreement, as well as a unanimous vote out of Committee, this should be a strong signal to the full House and Senate that the Music Modernization Act is a thoughtfully considered, necessary piece of legislation and should be passed quickly.

Unfortunately, interest groups that are ideologically committed to undermining protections for intellectual property are working feverishly to oppose even these commonsense, consensus-driven reforms.  Claiming that they are in it to help artists (a claim disputed the artists themselves), organizations like Public Knowledge, the Electronic Frontier Foundation, and the ACLU have been pushing an amendment requiring rights owners to remit 100% of their royalties to artists, effectively seizing their property and giving them zero incentive to actually license their catalogs.  These voices fundamentally do not believe in private property and they cannot allow any property right protection – even one supported by virtually all stakeholders involved – to be established, clarified, or strengthened without calling it into question.

We hope legislators will see through these attempts, recognize that intellectual property is a private property right protected by the Constitution, and pass the Music Modernization Act in its current form. Any amendment that seeks to take away property rights or reduce those rights should be immediately rejected....

By Phil Kerpen

In politics and public policy, sometimes a modest victory is actually a massive missed opportunity.  President Trump is at risk of suffering just that kind of setback with the impending completion of negotiations on the new NAFTA – if he fails to heed the brilliant strategic advice of Senators Ted Cruz, Cory Gardner, and Steve Daines.                                         

To date, NAFTA talks have revolved around important but obscure issues like investor-state dispute settlement, local content, and a potential sunset or review clause – hardly the typically visionary stuff of our chief executive.

These three senators have suggested a much bigger idea: a competitiveness chapter designed to codify and make permanent key Trump achievements on permit streamlining, regulatory reform, and workforce development that, once made part of a trade agreement, could be submitted for an automatic up or down Senate vote under fast-track Trade Promotion Authority without the possibility of a Democratic filibuster.  The strategy is backed by dozens of conservative leaders.

The package would strengthen the core objectives of NAFTA renegotiation by assuring a more stable, business-friendly regulatory environment, making it more attractive for companies to invest and create jobs in the United States. It would also permanently fix the regulatory process, cementing a Trump legacy of pro-growth regulatory reform and making another Obama-like regulatory assault on the U.S. economy nearly impossible.

Mexico has added a placeholder chapter to the agreement for these provisions, and even if they or Canada objected they could simply note their exception and allow the president to still include these provisions in the enabling legislation submitted to Congress.

The most significant part of the Cruz-Gardner-Daines proposal is a bill called the Regulations from the Executive in Need of Scrutiny (REINS) Act, which would require all future costly regulations to be submitted to Congress for approval before they could take effect.

President Trump is a longtime supporter of this concept, telling me in response to a 2015 survey:

"I will sign the REINS Act should it reach my desk as President and more importantly I will work hard to get it passed. The monstrosity that is the Federal Government with its pages and pages of rules and regulations has been a disaster for the American economy and job growth. The REINS Act is one major step toward getting our government under control."

Under President Obama, the REINS Act was needed to stop an onslaught of economically crippling regulations from the alphabet soup of federal agencies.  Now that President Trump has stopped and largely reversed that onslaught, it would serve a different but no less important purpose: making those deregulatory accomplishments permanent, locking them in as a legacy into the next administration.

Without the REINS Act, President Trump's highly successful pro-growth deregulatory efforts could prove ephemeral, reversed by the next Democratic administration that could put all the job-crushing Obama regulations back in place...

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