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Sen. Ron Wyden
July 29, 2008
Chairman Leahy, Senator Specter, and Members of the Committee:
I want to thank you for inviting me to testify before the Committee on this important issue: the fair treatment of Internet radio. I appear on behalf of myself and Senator Brownback, the co-sponsor of S.1353, the Internet Radio Equality Act. But I also speak for tens of thousands of musicians and other artists who want to use this new medium and the millions of Americans who would be their audience.
The core problem facing the committee today is a one that applies across the board when dealing with new technologies. Internet radio is a fledgling industry that has unlimited potential. It has less in common with old AM radio than a Model T has in common with the latest hybrid car. But Congress is approaching this new industry using the same tools that it used on player pianos and AM Radio. Just as the Internet continues to revolutionize countless other industries, changing the way we live, work, and learn, it has changed the idea of radio beyond the imagination of any member here, myself included. Using old tools on new technologies could be like the sledgehammer that smashes this new industry to pieces.
When regulators don't fully understand a technology they produce bad decisions and worse outcomes. One good example of this is the Minimum Fee section of the Copyright Royalty Board (CRB) decision. The CRB originally imposed a fee of $500 per channel on all commercial webcasters, which they stated was needed to cover administrative costs. There was no justification for this decision other than it was what the old industry, the folks the CRB was familiar with, asked for. This regulation was made despite the fact that if applied to just one of the well known webcasters of the time it would have cost over $500 Million dollars - for administrative fees... This particular part of the decision was so divorced from reality that the rights holders have already agreed to limit it, regardless of the outcome of our efforts here.
This sort of fundamental misunderstanding is unavoidable when we apply old rules to new technology, and that's why the Senate has to insure that ignorance does not trump innovation in our new economy. S.1353, The Internet Radio Equality Act, nullifies that unfortunate royalty decision and brings an understanding of new technologies to the process. It's precisely the freedom to reach listeners wherever and with whatever content they can that is the strength of this new medium. Let's not get in its way.
Today, I can, as an individual, listen to the exact same music, at the same level of quality, with the same level of impermanence on three different types of technology: traditional radio, satellite radio, and internet radio. The problem is that the cost to the broadcaster will be different depending on the technology. In fact, the cost will be higher as the level of innovation increases. We are allowing the royalty process to serve as a tax on technology, and that is discrimination against innovation.
I'm not suggesting that artists not be compensated for their work. To the contrary, as the son of an author I'm excited about the possibility that these new technologies could bring greater attention to artists and their work. My father would relish the fact that his books can now be downloaded onto new technologies like Amazon's Kindle and read by anyone with a library card while they commute to and from work. His audience would expand beyond his wildest dreams.
It's up to us to recognize the ways in which innovations bring audiences and creators together. We have to insure that all parts of government promote and advance new technologies and their potential to serve society rather than creating barriers that separate us from the benefits they can bring us.