>> thank you very much for the question, senator brown and for the visit we had the other day. i, of course, had not been part of the rule-making process before now. however, with regard to affirmatively furthering housing, i do believe it's important that there be that kind of guidance and comments from local authorities. i know that the san antonio housing authority, for instance, provided comments and so what i can commit to right now, whether it's this issue or another rule on the table is that we will diligently proceed and take in the comments and consider them and more generally, that i consider this something of importance for our local housing authorities. >> thank you. thank you, mr. chairman. >> thank you. staff tells me we'll wait until

11:10, but i apologize for this, but if you could abbreviate your questions. senator toomey. >> thank you, mr. chairman. i will try to abbreviate my question. good to see you both, and i appreciate the discussion we had in my office,s mayor castro. i do need to follow up on one of the topics we discussed. many members of this committee alluded to the ongoing work to reform housing finance. while we have a range of opinions about how best to do that, i believe there is a unanimous agreement on this committee that however we do it, it's got to involved bringing private capital into financing residential mortgages. at the same time we are having this discussion, as you know, there is a movement under way to

attempt by certain communities, to attempt to use eminent domain as an argument to justify confiscating mortgages from private lenders at a discount some, who knows what discount to what they're actually worth. first of all, i think it's a blatant violation of contract sanctity if they do this. it's a taking of private property for private gain, which our constitution clearly forbids, and it cannot but have a devastating impact on the ability to attract private capital if private lenders know they run this risk. my question is, as hud secretary, will you take active steps to deter this kind of activity, and specifically, would you forbid the fha from participating in the refinancing of mortgages that were confiscated using eminent domain? >> thank you very much, senator, for the question and for our conversation the other day. as i mentioned the other day in

our conversation, this particular device that i know a handful of cities have employed was issue of first impression for me. this is not something the city of san antonio has tried. i understand, in fact, it hasn't been put into effect agently in any city and there is litigation surrounding it. i can understand why communities with a whole bunch of folks under water might think of this method. however, i do see your point on why it causes concern among mortgage lenders. at this time, i would say if i am confirmed, i would look forward to visiting with you and committee members on what hud's programmatic response ought to be. >> i think senators ought to know what your views are about using eminent domain to confiscate mortgages, and would you intend to allow the fha to

participate in that? >> thank you, senator. i can certainly see your concern. as i said, it's not something the city of san antonio or under my leadership we ever proposed or drew up. i would like, however, if i am confirmed, the opportunity to get a little bit more detail on the issue, understand it a little bit better, then take that up with you and members of the committee. >> so i see i'm not going to get an answer to my question, mr. chairman, and i will yield the balance of my time. >> senator tester. >> it's good to have you here, mayor, along with your wife and brother. appreciate your being willing to serve. you talked at an earlier question about taxpayer should not be in first position of loss with fannie mae and freddie mac. don't let me put words in your mouth, but that's what i heard. do you believe taxpayers can be protected without reform of

fannie mae and freddie mac? >> thank you, senator, for the question. i believe that reform would be preferable to what we have in place now if the nation were to experience another down turn, another housing crisis as we just experienced. for that reason, i commend the committee for working toward housing finance model that takes the taxpayers out of their position of first loss and puts the private sector in that position. i fully understand though, as well, the concerns of folks with regard to the other part of the balance, which is access to credit, and that we have had a housing finance system in place that seeks to ensure opportunity for americans of modest means who are credit-worthy borrowers. i can understand the very real concerns. if i am confirmed, i would look

forward to hopefully bringing some fresh energy to this and to working with members of the committee who are willing to work to find a resolution. just to answer your question, i don't believe that the taxpayers are nearly as protected as they could be under this different model. and that's a positive of the legislation. >> okay. do you think access to credit versus taxpayer protection, do you believe we can have both? >> i absolutely believe we can have both. i know and i commend the members of this committee for working toward those dual goals. if i'm confirmed, i look forward to working with you to achieve both those goals i believe need to be a part of any legislation. >> housing conditions are in terrible shape. we visited about it when we were in my office. i appreciate the work hud has done in indian country. there is some word that the agency might be looking at

different data sources and could potentially change the funding for tribes, would have a negative effect on the tribes in montana. could you give me assurances a new formula at the agency would use in the future to allocate tribal housing funds would not unduly disrupt the ongoing tribal housing programs? >> thank you for that. i want to commend you for the strong advocacy you've shown more generally with tribal communities. i would agree what we want to do is provide more actions or hud wants to provide more housing opportunities and not less. what hud would seek to do is work with our tribal communities as we traditionally do. and also with you, senator, and the committee to achieve

balance. >> could you talk about what exactly would be required of the federal government if additional assistance were required and what obligations it would have to the taxpayers? >> you mean worthy enterprises to operate at a loss and draw down? >> yes. >> the formula for when additional monies can be accessed is set in the agreements that are in place. i think the taxpayers are already invested to the tune of $187.5 billion. additional draws would further increase the risk to those taxpayers. it seems to me the mission of the inspector general's office which is independent, rigorous, thorough oversight doesn't change because of the fact that

the taxpayers' burden has increased heightens, if you pill the mission of the oig but doesn't change what it will do in terms of its audits, evaluations and investigations. >> senator water, we have a couple of minutes. >> i will be as brief as i can be. i want to make sure senator warren gets her two cents in. thank you for your willingness to serve. i'm going to ask you in a written question about the recent fha/oig report. great to see you, enjoyed our visit. i would commend you under secretary miller's recent comments, pointing out that the current profitability are unsustainable with their shrinkage required of 15% portfolio on a regular basis. the small amount of profits

making is disappearing. it would take 20 years to recapitalize them. we have the same debate, are they going to be for profit, not for profit, as we discussed the current status quo which has particularly access to credit to african-american latinos at an all-time low. the question senator tester asked, the recent stress test shows potential vulnerability up to $190 billion of additional. others have been working how we improve this legislation. i would ask the fourth or fifth time. my hope is you will be confirmed, get up to speed very, very quickly and gse reform will be first out of the box on your list of priorities. do you want to add a quick comment to move to senator warren? >> thank you for the comments.

if i am confirmed, i do look forward to working with you and the committee to hopefully bringing some fresh energy to this and to helping to move housing finance model that i think works for americans. >> there are improvements on the legislation, senator warren and others have been working on. i would commend the urgency how vulnerable taxpayers are as well as awful access to credit for low-income people at this moment in time. thank you, mr. chairman. >> senator warren. >> thank you very much, mr. chairman. thank you, senator warren for your speed. thank you both for being here for your willingness to serve. i'm going to submit questions for the record but i want to make a point. you've been asked about gse reform repeatedly because it is so important. important to our economy. we've talked about different problems we mays right now.

i would emphasize the problem of access. in 2001 before the housing bubble, when fannie and freddie were operating normally, the average credit score for a borrower receiving a fannie or freddie-backed purchase money loan was 711. by 2013 the average credit score jumped to 756. in the wake of the financial crisis of 2008, more american families are struggling with damaged credit, but fannie and freddie have raised standards by nearly 50 points. keep in mind that nearly 50 million americans lie between those two points on the credit score continuum. the story is much worse for african-american families, for hispanic families. we have got to change what's happening with fannie and freddie. we have got to make reforms. a large part of that is because

of access. any kind of reforms we do have got to be reforms that make mortgages accessible to middle class families that make mortgages accessible to families trying to build the american dream for themselves. i'll stop there and submit my questions for the record. thank you, mr. chairman. >> i thank all the nominees for your testimony and willingness to serve our nation. i will remind members to submit questions for the record by noon this friday june 20. police submit your answers to the written questions as soon as possible so that we can move your nominations forward in a timely manner. this hearing is adjourned.

mayor castro joined by his twin brother joaquin castro who serves the 20th district in texas. if you missed any of this hearing, watch it in our video library at c-span.org. also happening on the hill today is a hearing examining false advertising of weight loss

products. dr. oz, the tv host, is among the witnesses. he was questioned about the use of flowery language in advertising by the committee chair mcgaskill. >> this little bean has scientists saying they found the magic weight loss cure for every body type. it's green coffee extract. "i've got the number one miracle in a bottle, to burn your fat. it's raspberry keytone." this may be the simple solution to bust your body fas for good. i don't get why you need to say this stuff because you know it's not true. so why, when you have this amazing mega phone and this amazing ability to communicate, why would you cheapen your show by saying things like that? >> well, if i could disagree

about whether they work or not, and i'll move on to the issue of the words i used. just with regard to whether they work or not, take green coffee bean, green extract as an example. i'm not going to argue it would pass fda muster if it were a pharmaceutical drug seeking approval. among the national products out there, this product has several clinical trials. there was a very good quality one done the year we talked about this in 2012. >> i want to know about that clinical trial. the only one i know is 16 people in india paid for by the company that was, in fact, at the point in time you initially talked about this being a miracle, the only study that was out there was the one was 16 people in india written up by somebody being paid by the company producing it. >> this paper argued there was no one paying for it. i have the five papers plus a series of basic science papers on it. senator mccaskill.

we can spend time arguing whether the merits of trying or worth trying. many things we argue you do with your diet are criticizable. should you be on a low-fat diet, low-carb diet? we have come full circle and no longer recommend that because we realized it wasn't working for patients. it is remarkably complex to figure out what works for most people even in a dietary program. even in the practice of medicine we evolve by looking at new ideas, challenging orthodox involving them. when i hold, these are the clinical papers, and we can argue about the quality of them, very justifiably. i can pick apart papers that showed no benefit, as well. at the end of the day, if i have clinical subjects, real people having undergone trials, and in this case i actually gave it to members of my audience. it wasn't a formal trial. >> which wouldn't pass. the trial did you with your

audience you would not say that would ever pass scientific muster. >> no. i would never publish the paper. that wants the purpose of it. the purpose was for me to get a thumb snail sketch. was it worth talking to people about or not? again, i don't think this ought to be a referendum on the use of alternative medical therapies. i've been criticized for having folks come on my show talking about the power of prayer. i can't prove prayer helps people survive an illness. >> it's hard to buy prayer. prayer is free. >> yes, prayer is free. that is a very good point. thankfully prayer is free. but i see in the hospital when folks are feeling discomfort in their life and a lot of it is emotional, when they had people praying for them, it lightens their burden. my show is about hope. as you kindly stated, we engaged millions of people, including programs we did with the cdc to get folks to realize there are different ways they can rethink

their future. their best years aren't behind them, they can lose weight. if i can just get across the big message i do personally believe in the items i talk about on the show. i passionately study them. i recognize oftentimes they don't have the scientific muster to present as fact, but nevertheless i would give me audience the advice i give my family all the time. i've given my families these products, specifically the ones you mentioned, then i'm comfortable with that part. i do think i made it more difficult for the fdc, i use flowery language, but ended up not being helpful but incendiary and provided fodder for unscrupulous advertisers. that clip you played, which is over two years old, i've done hundreds of segments since then, we have specifically restricted our use of words. i literally not speaking about things i would otherwise talk about. there is a product i never

talked about in the show i feel very strongly about because i know what will happen. i will say something -- we did a show with a syrup as a south american root that had a big study published on it, a high quality study where they showed not only did it help people lose weight but helped their health. shown in women who were diabetic. was not funded by industry. we talked about it. i used as careful language as i could. still there were internet scam adds picking one or two support words. of course i support them are or wouldn't be talking about them otherwise. still ended up out there. >> listen, i'm surprised that you are defending -- i tried to do a lot of research in preparation for this trial and the scientific community is almost monolithic against you in terms of the efficacy of the three products you call miracles. when you call a product a

miracle and it's something you can buy and gives people false hope, i just don't understand why you needed to go there. you've got so much you do on your show that makes it different and controversial enough that you get lots of views. i understand you're in the business of getting viewers, but i really implore you to look at the seven -- i would ask you to look at the seven lists the ftc put out on the gut check. it's very simple. causes weight loss of two pounds or more a week for a month without dieting or exercise, causes substantial weight loss no matter how much you eat, causes permanent weight loss like you said, looking for it to bust your body fat for good. if you just look at those seven, and if you spend time on your show telling people that this is the seven things you should know, that there isn't magic in a bottle, that there isn't a magic pill that, there isn't some kind of magic root or

acaiberry, it's going to make it not matter that you're not moving and eating a lot of sugar and carbohydrates. do you disagree with any of these seven? >> senator mccaskill, i know the seven. >> why would you say something is a miracle in a bottle? >> my job, i feel on the show, is to be a cheerleader for the audience. when they don't think they have hope, i want to look and i look everywhere, including alternative healing traditions for any evidence that might be supportive to them. you pick on green coffee bean extract. with the amount of information i have on that, i still am comfortable telling folks if you can buy a reputable version, i don't sell it and this is not long-term use. it's one pound a week over the duration of different trials done. that happened to be the same amount of weight lost by the 100 or so folks on the show who came on. half got a placebo. we got fake pills, gave it to half the people, real pills to

the other half. it's the same thumbnail looking at a rough idea. if you can lose a pound of week more than you would have lost doing the things you do already. you can't sprinkle it on kielbasa and expect it to work. if you get a few pounds off, it jump starts you and gives you confident to get going. follow the things we talk about every day including those seven items, i think it makes sense. >> a portion of that hearing happening today. we'll show you the entire hearing later today starting at 5:00 eastern right here on cspan3. coming up tomorrow, general motors ceo mayor barra testifies about gm's internal investigation related to the company's ignition switch recall. in april she declined to answer many questions saying she wanted to wait for the findings of the company's investigation that. report released earlier this month cleared ms. barra and her executive team of wrong doing, but criticized the bureaucracy which senior managers shrink

their responsibility. her next appearance on capitol hill will be tomorrow at 10:00 a.m. eastern and live here on cspan3. throughout tomorrow we'll be interested getting your thoughts on her testimony on facebook or twitter. the idea tweend 250250 instead of trying to tell the history of st. louis as a timeline or era beyera we would miss vitally important things. instead of doing that and failing, what if we gave snapshots of st. louis history that would give people a glimpse of all the diverse things that happened here and they could use their imaginations to fill in the rest. we chose 50 people, 50 places, 50 moments, 50 images and 50 objects, and tried to choose the

most diverse selection we possibly could. we are standing in the 50 obsession of the 250 and 250 exhibit right now. this is what most people would call the real history. this is where the object is right in front of you. brewing is such a huge part of st. louis' history. it's an amazing story with lots of different breweries and the most famous became anheuser-busch, the largest in the world. in the era of anheuser-busch talking about millions of barrels produced each year, we think they are producing so much beer, this is from an era when things were simpler. it's fun to show people this object and gauge their response. the days before they had cans and bottle caps, they put corks in the bottles. somebody had to sit on this thing and do it by hand. it has foot pedals on the bottom where the operator would push down with his feet to give the

cork enough force to go in the bottle. it's got three holes for three different size bottles. >> this weekend, the history and literary life of st. louis, the gateway to the west on c-span2's booktv. and cspan3's american history tv. house judiciary subcommittee last week looked at music licensing laws and ensuring that songwriters and publishers get paid. the national music publishers association testified. country songwriter lee miller, lee thomas miller was also there telling house members current laws were crushing songwriters. >> probably everyone here knows i am an avid blue grass fan and country music as long as it's long-time country. i'm dating myself

chronologically. many will welcome our new and veteran witnesses today. although every industry goes through changes over the years, i think everyone would agree the music business has seen more than its share of changes over the past decade or two. many of us grew up in a world we look forward to buying our favorite albums at the local record store. today's youth may not even know what a record store looks like. since they prefer to download these songs from itunes or streaming over pandora. times change and i'm glad the music industry adapts to the preference of its fans and making new music available. however, the current licensing system hasn't changed. many feel our music licensing laws were designed for a world that existed decades ago and have become outdated. music lovers can now access music virtually anywhere on an

ever-changing variety of devices. i may be old, i am old, but i'm also old fashioned in my view our copyright laws should promote access to music and still protect the interest of copyright holders. this is a traditional view of compulsory licenses and i see no reason why we cannot restore this balance. if not, we know consumers will resort to pirating sites on the internet for their respective music. there are some long-standing issues in the music business that i feel are important for congress to address. how royalty rates are determined, who pays music royalties and how older music works and treated under federal copyright law. i've been a friend of broadcasters for some time. i hope that the broadcasters and the music industry can find a way to work together to resolve

their common issues. in closing, i did want to thank our panel this morning making time available for this hearing. while i would prefer to spend the next few hours learning how to make blue grass music more popular, i will instead spend the next few hours learning about how to make all music more popular. again, thank you the panelists and those others in the audience for your presence today. i yield back and i recognize the distinguished gentleman from michigan. then i'll get to the gentleman from new york. >> thank you, mr. chairman and ranking member nadler. this is an important hearing and it's good that everyone is here. i worked with congressman

holding of north carolina to interest deuce hr-4772, the respect act, which addresses a loophole which allows digital radio services to broadcast recorded music before february 15, 1972, without paying anything to the artists and labels that created it. this bill would ensure that legacy artists and copyright owners of all works, whether recorded before or after february 15, 1972, are compensated by those who benefit from the federal statutory license. the current failure to pay these legacy artists is shameful. it's harmful to communities like

mine, detroit, which has so many artists who were at the forefront of the industry and should be compensated fairly for their ground breaking work. taking someone else's labor and not paying is simply unfair. this bill seeks basic fairness for artists who created sound recordings before '72. a related issue that must be examined is whether our efforts to improve the music licensing scheme will be, in fact, truly fair if it does not include performance rights for sound recordings. it's no secret i'm a strong supporter of artists, and believe that the current compensation system on terrestrial radio am/fm isn't fair to artists, musicians or

the recording labels. when we hear a song on the radio, the individual searing the lyrics or playing the melodies receives absolutely no compensation. every other platform for broadcast music, including satellite radio, cable, internet webcasters, pay a performance royalty. terrestrial radio is the only platform that doesn't do this. this no longer makes any sense if it ever did, and imunfairly deprives artists of the compensation they deserve for their work. we have a diverse panel of experts. i join with our committee in welcoming them and look forward to hearing them and to working with my colleagues to ensure

that music licensing process is fair and does not have unintended consequences that harm artists, songwriters or producers. thank you for allowing me to make this statement at this time. >> i thank the gentleman from michigan. the chair now recognizes chairman of the full judiciary committee, mr. goodlatt. >> thank you. last monday the subcommittee traveled to new york city to learn about the first sale doctrine. one issue was the applicabilty of first sale to the digital environment, including music. as we heard at the hearing, consumer expectations have changed substantially in the digital era. probably in no other area of copyright law have consumer expectations changed more than in music. in a world of instant and constant access to entertainment

options on internet connected devices, laws that hinder or stunt access to legal music not only hurt consumers, but also the artists and the services that provide music to consumers. unfortunately, consumer whose want to be able to easily access their favorite songs any time on all of their digital devices face a legal framework written for the world of vinyl albums and 8-track tapes, problems that have emerged from this current legal framework include, among others, a lack of a unified robust and easily accessible source of ownership records upon which music delivery services can be built, uncertain dividing lines between mechanical and performance rights, artists being treated differently under the law depending upon when a work was created. artists and music delivery services being treated differently under the law depending upon how music is delivered. artists and music delivery

service being treated differently from when a music service began operation. overall lack of transparency in the industry regarding how revenue is accounted for. during today's hearing, we will primarily focus on the rights and legal regime associated with musical compositions. we'll hear from a broad spectrum of stake holders from songwriters to those who collect revenue and those who deliver musical work to consumers in new and innovative ways. interested parties across the spectrum recognized a need for changes necessary how our nation's copyright laws as they pertain to music are structured. some have called for tweaks to our current licensing regime, while others have called for more fundamental changes such as moving toward a more free market approach. i look forward to learning more about both the problems plaguing the current framework and possible solutions to these problems and thank you for

making the time for being here this morning and yield back. >> the chair recognizes the distinguished gentleman from new york mr. nadler for opening statements. >> thank you, mr. chairman for holding this hearing as part of the copyright review. i'm sorry this hearing as well as the last is not in new york because everything is better in new york, but we have to make due. this is the first of a two-part hearing which is fitting as these sections of the copyright act are very much in need of scrutiny. it is often said that if we started from scratch, nobody would write the laws as it stands today. music copyright and licensing is a patch work of reactions at different times to changing technologies. from the development of player pianos and phonograph records, the industry has been playing catch-up and failing. terrestrial satellite and internet based radio stations deliver music to listening in their cars, home and at work. each require licensees from

copyright owners for the underlying musical work and sound recording, with the rights to each often owned or managed by different individuals or entities. over time, and in an effort to help ensure equity and access in this complicated universe, congress created a statuary licensing scheme. unfortunately, the existing landscape is marred by inconsistent rules that place new technologies at a disadvantage against competitors, and inequities that denied fair compensation. under current law rules vary from payment of royalties by internet broadcasters, cable radio and satellite radio providers. internet broadcasters like pandora pay royalty rates set to reflect a willing buyer and seller of model. by contrast rate for cable and satellite providers is established through factors in 1998 that predated this development of internet radio and many believe results in a below-market royalty rate. pandora fairly complained it is at a competitive disadvantaged

and works or access through satellite receive less than when the consumer streams the same work over the internet. i circulated draft legislation to establish parody. the songwriter equity act recently introduced would modernize the law to ensure the buyer willing standard covers songwriters and music publishers. other provisions of the copyright act prevent songwriters and publishers from providing evidence in federal rate court under consent decrees governing licensing of their works that came into existence in 1941. the songwriter equity act would remove that ban, thus helping songwriters obtain a fair market value for their work. in the meantime, the department of justice announced a much-needed review of the consent decrees that govern bmi, two of the performance rights

organizations responsible for collecting and distributing royalties. nobody is paying artists who recorded many of our greatest musical classics before 1972 like aretha franklin, the birds and temptations. a provision would close loopholes against those who argue paying any royalties for these great legacy artists. one of the glaring inconsistencies is a performing artist, background musicians receive no compensation when the music is played over the air on terrestrial meaning am/fm radio. we have yet to extend this basic protection to artists when their songs are played on fm or am radio. this is unjust. terrestrial radio profits from the intellectual property of recording artists for free.

i'm aware of no other instance in the united states where this is allowed and needs to be remedied. we are on a short list of countries, a list that includes such wonderful models as iran, north korea and china, that do not pay performing artists for their songs played on the radio. when american artist songs are played in europe or any other place that do provide a sound recording right, these countries withhold performance royalties since we refuse to pay theirs. they have revealed an extraordinary bipartisan consensus in favor of performance rights. as registered copy rights testified earlier this issue is right for resolution. although the existing music licensing and copyright scheme can be difficult to understand, the solution is quite simple. if congress is going to maintain compulsory licensing, any statuary rate standard should attempt to replicate the free market to the greatest extent

practicable. the law should be platform neutral and all music creators fairly compensated. it is well past time to ha harmonnize the rules. if we had to rationalize the law and level the playing field, we should take a comprehensive approach. at this year's grammys on the hill event, it called for the industry to coalesce the music bus. they agreed the time has come for congress to address these issues in one package. i agree and i plan to take up their charge. with colleagues on both sides of the aisle, i am developing legislation to address the various problems in existing law in one unified bill, bringing fairness and efficiency to a music licensing system and ensuring that no particular business enjoys a special advantage against new and innovative technologies.

consumers don't know the button they push on their car dashboard or smart phone arbitrarily determines how much artists and songwriters will be paid, assuming they will be paid. we can create a better system for radio competitors for artists and songwriters and fans, all whom depend on a vital healthy market for music and music services. we have a wide range of witnesses here today. our second hearing scheduled for june 25th. i look forward to their testimony. i hope we can all come together to agree on and pass meaningful comprehensive reform. thank you, mr. chairman, i yield back the balance of my time. >> i thank the gentleman. all other opening statements, without objection, will be made part of the record. we have a distinguished panel today, seven in all. i will begin by swearing in our witnesses prior to introducing them. if you would please stand. do you swear that the testimony you are about to give will be the truth, whole truth and

nothing but the truth so help you god? let the record show all answered in the affirmative. i will now introduce the witnesses. you may be seated, gentlemen. our first witness is mr. neil portnoy, president and chief executive of the recording academy. he served as vice president of the west coast division of jive records. he received his degree from george washington university. good to have you with us. our second witness is mr. lee thomas miller, songwriter and president of the national songwriter association international. a three-time grammy award nominee and has written country singles that reached number one. he received his bachelors degree in music theory and compensation from eastern kentucky university good. to have you, mr. miller. third witness mr. david israelite where he protects and advances the interest of music

publishers and songwriters in matters related to domestic and global protection of copyrights. he received his b.a. in clinical science and communication from the william jewell college and jd from the university of missouri and columbia law school. fourth witness mr. michael o'neil, chief executive officer of bmi. also known as broadcast music. he oversees all bmi's domestic and global business operations and discusses direct strategic growth. received undergraduate degree from montclair university and mba from rutgers university. our fifth witness mr. lee nye. he practiced entertainment law in new york for 20 years.

representing individual songwriters. recording artists and producers. he earned his b.a. from st. john's university and jd from the brooklyn school of law. sixth witness mr. will hoyt, executive director of the tv music license committee. prior to joining the television xhusk license committee he spent 25 years as an executive with nationwide communications inc. he graduated from ohio western university and receiving his jd from ohio state university school of law. our seventh and final witness is mr. jim griffin, managing director and owner of one house llc. mr. griffin sells extensively on digital music, media registries. he served as president of the music licensing at warner music group. mr. griffin received his degree

from the university of kentucky. gentlemen, we have a full roster here today. good to have all of you with us. to assist you, there will be a timing panel on your desk reflecting certain lights. when the light goes from red to yellow, strike that. when the light goes from green to yellow, that is your warning you have one minute remaining. the ice on which you are skating is becoming increasingly thin. you won't be keyholed, but that gives you notice one minute is upcoming. if you would comply with that, we would be appreciative. mr. portnoy, we will commence with you. thank you all for being here. >> thank you. chairman goodlatte, ranking members conyers and nadler and members of the subcommittee, my name is neil portnow and i'm

president and ceo of the recording academy. known internationally for our grammy awards, academy is the trade association that represents performers and studio professionals. thank you for the opportunity to address the subcommittee this morning. since i have the honor of being the first witness, let me start at the beginning. with the copyright clause of the constitution. the framers gave authors the exclusive rights to their works for a time to promote the progress of science and useful arts. as today's hearing is focused on music licensing, we should at the outset remember who the authors of music are. they're the songwriters and composers who create the very dna of music. they are the featured and background performers who perform those songs and bring them to life. they are the producers and engineers who create the overall sound of the recordings that we love. over the next two hearings i urge you to keep music creators

foremost in your mind. they are the authors our founders expressly protected. the framers intended copyright to be an incentive create. today we have a patch work of laws that do not address the challenges of the digital marketplace and often create a disincentive to make music. low streaming rates prevent creators of making a living. performers and composers must police the internet to take down works. they continue to use artist recordings without compensation while leveraging this unfair advantage as they move into the digital world. this last point is most glaring. terrestrial radio is the only industry in america built on using another's intellectual property without permission or compensation. broadcasters in every other developed country in the world compensate their performers. the national association of broadcasters has been a lot of money lobbying to maintain their

free ride. since they are not on the panel today, allow me to recount the history of their failed argument on their behalf. first they said the radio artist relationship is, their own bias found the benefit to radio is ten times any perceived promotional benefit to ours. then they said they're different because radio is free, until they remembered that most internet radio is free but still pays royalties. then they said a royalty would put small stations out of business until we offered a flat royalty rate of as little as a few bucks a day. then they said the free market would take care of the issue until they opposed the free market act that would have created one. finally, they said it's a tax. until grover norquist said it's not and grover knows a tax when he sees one. the nab has run out of arguments

and time. the political groups ranging to americans for tax reform and tea party nation, they all agree with us. while radio touts on unsense cal resolution, both parties are working on real resolution to resolve this issue. any copyright form must include a radio performance right. we support several thoughtful bills. the songwriter equity act would allow song writers to be paid a fair market value. it would insist that they must value the content of others. the respect act would remove a loophole that denies older artist royalties. now it's time for unified holistic approach to music licensing. it's time for a music bill or music bus for short.

with copyright interview under way, we need our industry and congress to be visionary and create a unified approach for the future of our business, and the music bus idea is simple. fair market pay for all music creators across all platforms. a music bill need not wait for the entire copyright act to be revised as congress's own advisor noted, quote, these issues are ripe for resolution. mr. chairman, a legal framework that includes compulsory licenses, government rate courts and scent degrees already diminishes the vision of exclusive rights. if music makers must be subject to these restrictions, let's at least assure them that the result would represent what a free market would have provided. we're not asking for special treatment. we're simply asking for what is fair. fair market pay for all music

creators across all platforms. a simple concept, a single bill, a just framework for music licensing. thank you very much. >> thank you. mr. miller? pull that mic closer to you, mr. miller. >> are we good? i'm a writer, not an artist. good morning. my name is lee thomas miller. i grew up on a small tobacco farm in kentucky. i started playing piano when i was 11. by the time i was 15 i was writing bad songs and playing them with my even worse band. but we were just kids, so the people cheered if only out of pity. i went to college to study music theory and composition and graduated with a bachelor's degree from eastern kentucky university. that simply meant i was now

overqualified to play in the honky tonks. i was formally educated while writing country songs on the side. these are two very different things, according to my professors. my parents were thrilled when i finished college and mortified when i saved $1,000 and moved to nashville. for years i wrote songs, hundreds of songs. i played in bands and took temporary jobs to pay the bills when needed. i studied the songs i heard on the radio and began meeting and learning from the song writers who wrote them. on september then the real work started. 11 years from the day i moved to nashville it took 11 years to have a hit song on that radio. since then i've been lucky and i've been blessed. i have had hits and continue to earn a living while working into a room where there's nothing and making up something out of thin air, something that's real,

tangible, something that creates commerce. what i make is the seed that fuels the entire music business. it generates thousands of jobs and shapes the very culture we live in, because, let's face it, nearly everybody loves music. but i am one of the remaining few. since i started, nine out of ten of my colleagues don't write songs as profession anymore because royalties can no longer feed their families. rules established in 1909 largely to prevent one pine pia rule has me slitting my royals. that's not much of a pay raise from the original two cents paid in 1909. then the royalties from my song performed on an internet radio station are under decrees from

world war ii. they're forbidden from considering what the marketplace says my song is worth. i only receive thousandsth of a penny for those performance. i appreciate the internet as much as you do, but the current system has devalued the musical composition to the point where song writers are being wrushd. it's bad enough that it's so easy to steal the music today, but a legal framework that allows songs to be streamed for nearly free will destroy the livelihood of the american songwriter if it is allowed to continue. an important piece of legislation called the songwriter act has been introduced that would allow my copy writes value in the modern marketplace to be considered in rate setting proceeding. i want to thank all of the sponsors of this legislation. while it is a great start, even bolder revisions to the current copy wright law and music licensing rules are necessary

for establishing today's song writers and come posers. it's time to eliminate or drastically alter world war ii era consent decrees. song writers should be under -- future licensing and collection agencies to be able to compete with large market shares. there should be transparency throughout the entire process. i am america's smallest small business. i sit down and make stuff up. i do not succeed if my songs with the money that remains, i raise babies. i buy bread, gasoline, cough medicine, braces and guitar strings.

it all ghins with a song. today i ask you on behalf of my family and the families to change the regulations. thank you mr. chairman and members of the committee. >> we thank you for the opportunity to testify. the committee is well aware that there are two different copyrights involved in music, for the underlying copyright and any sound recording of that song. what is striking is just how different these two copyrights are treated under the law and

through government regulation. first, copyright law contains antiquated regulations that distort the value of a songwriter's work. the copyrighting of a song is a property right and should not be regulated by the government unless there's a compelling reason to do so. songs should be valued in the free market just like sound recordings. second, if there's to be regulation, then at a minimum, song writers deserve to be paid a fair market value. there's no intellectually honest objection to this point. third, congress should object any attempt to expand licenses. it could have long term harmful consequences for creators. mechanical reproductions used to represent our dominant income stream but today compromise only about a quarter of our revenue.

section 115 imposes a compulsory license that dates back to 1909. as a result of this world war i era law, writers are denied the value of their property in a free market. in 1909 the rate was set by congress at two cents per song. today's rate to be more than 50 cents if adjusted for inflation. remarkly, the current rate stands at 9.1 cents. for those who hire of hearing that statistic, imagine being paid less than a fair market value. this is due to the antiquated below market standard when setting rates known as the 801-b standard that's harmful to creators. as mary beth peters argued, quote, while the section 115 license may have served the public interes