Senator Hatch Warns Major Labels in Napster Hearing.

by Richard Menta 7/13/00

"Fair and reasonable licensing needs to take place, that is what I'm hearing" Said Senator Oren Hatch.

Hatch, Chairman of the United States Senate's Judiciary Committee big MP3 hearing, didn't leave off there. He told the major music labels in direct terms that Congress would not lie still while the record business continued to ensnare e-music with potentially hundreds of lawsuits. Hatch even threatened legislation where Congress would create it's OWN definition of "fair use", a notion with heavy implications for all sides.

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This was supposed to be just an exploratory committee with no actual powers of action, but the weight of the events wrought by the ability to download digital music has brought a spotlight to this already celebrity laden event.

Hatch, as do the other Senators of the committee, know that it will take the courts years to render decisions on what constitutes "fair use". That's too slow for today's fast technology that is already several steps ahead of present copyright laws. Laws that it threatens to make moot by shear force long before a high court has the opportunity to officially declare any of it legal or illegal.

So Hatch did what he needed to do. He told the major labels to get on the ball and enter the digital download arena, not derail it.

This had to have caught the major labels by surprise. First of all, Congress has been reluctant to interfere in the mercurial world of cyberspace for fear they might do more damage than good. They even put a moratorium on the collection of sales tax until the year 2006 just to give the online world room to grow. Let the private market take care of itself they said.

Furthermore the music industry has a strong lobby on Capital Hill, one that forced the recent "Work for Hire" clause that officially stole the copyrights away from their own artists and into corporate possession. If Congess is in the music industries pocket, why such a rebuke?

Simply put, as the biggest catalyst of economic growth this country has ever seen, technology is the propellant of the good times we now enjoy. It also gives the U.S. its biggest competitive advantage in the world marketplace ever. It's the golden goose and Congress is out to protect it.

Also, realize this as the Senators have: The Internet is almost exclusively an American industry with all of the named Web companies like Napster and U.S. businesses.

Of the major labels, only Time Warner is a native company. The rest including BMG (Germany), Sony (Japan), Seagrams (Formerly Canadian and now French under Vivendi), and EMI (Britain) are foreign companies. It will take more than lobby money for a congressman to support a foreign concern over an American industry, especially in an election year. We are not just talking about Napster here, we are talking international trade and popular politics.

Hatch's threats to force the music industry, by legislation, to make their content digitally available was a warning that they DON'T want to drag Congress deeply into this. He's right. The legislative branch may be faster than the judiciary, but not that much faster. Get out of the courts and get into the game is prudent advice and the major labels should heed it.

Interesting side note. Oren Hatch is a composer himself and a successful one, having hit the top 10 of the Christian charts. Now that his efforts are considered "Works for Hire" you have to wonder if there isn't some poetic justice going on here also. Stay tuned.

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