campaign to rally artists to sign a petition to congress in support of internet radio. but it was during the time when the internet radio freedom act was being debated in congress which would have actually resulted in a cut to artists' royalties. pandora's letter to artists stated that they simply wanted to have the artists' voice heard and yet from what some artists discovered, this was not the actual intent, the implication for the artists signing the petition at that particular time was that they were supporting cuts to themselves. so mr. harris can you tell us why pandora enlisted the help of artists and ms. cash can you tell us what you and the creative community felt when this was happening? >> part of my opening remarks i noted that pandora plays 100,000 recording artists every month and 80% of those recording artists don't get played on terrestrial radio. there is actually a large group of independent primarily

recording artists and singer/song writers who do value pandora because it is the only outlet, the only distribution platform available for them to find an audience that loves their music. >> ms. cash? >> that is what a lot of us are calling the exposure argument that we are seduced into thinking if we allow these performances without pay that we will get exposure therefore drive consumers to buy our records. that may or may not be true but the point still remains we don't have control over those copyrights and we are not paid fair compensation, we are not paid fair market rates. as i said before, there's no transparency about this. it's somewhat manipulative. and i feel that we end up subsidizing these multibillion dollar companies. they use our music as something like a loss leader to draw

people in and then they make the money. and to confirm what mr. williams said, the place that artists have the most control are sync licenses. i've given my songs for free, my choice, to college students making their first film who want to use my song. that's great. i want to support them. then i've negotiate a fair rate with a popular television show that wanted to use my song. i have control over those things and that is the bottom line. that and fair compensation. >> thank you, i yield back. >> thank you. i'm going ask some questions now or more so make some statements and then hopefully you can respond. first of all, i would like to give each member of the distinguished panel an opportunity to respond to my question -- this question, if following question in writing if you care to do it because there

are too many and we're not going to get through my couple of minutes. if you would be so kind as to tell me in your opinion what a free market is and what a fair market is, comparing the two. because i hear those terms thrown around "free market," "fair market." i asked the last panel to do this and i'm asking you to do the same and get that to me in writing if you care to do so. i've been having meetings, my staff and i have been meeting with people that have a dog in this fight continually. we've been doing it for months. if someone has not been invited to a meeting please contact my office. i'm congressman tom marino, i vice chair this committee. let us know. because i think we've covered all the bases but there are many, many people involved in this. i'm trying to get a consensus. i don't want congress to sit down and have to sort this out and i'll show you why in a

minute. this is very complex. i've been studying this for months and talking to many people and here's the reason why i do not want congress to sit down if we can get a consensus among everyone who has skin in the game. i'm going to read to you a list of those individuals and i probably missed one or two. these are the parties that we've come to the conclusion that are involved in this. excludeing the public. song yiers, movie score composers, performance rights, organizations, pros such as bmi and ascap, royalty collectors for digital music, sound exchange, artist/performers. terrestrial radio, broadcasters, satellite radio, cable tv video, digital radio, streaming, digital download, providers like itunes record labels, copyright oerchers, music promoters, consumers, listeners, collective

music organizations, music publishers, music academy, grammys, recording engineers, copyright offices, groups that may hold exemptions such as libraries, universities, churches and i'm sure i missed someone so you see the litany of names and individuals in groups and entities that we have involved here now what i'm going to show you for the record and without objection i'd like this schematic thattive in front of me, it's a schematic of the music licensing marketplace and the publishers/song writers and anyone else involved in the litany of names that i just read off. i have a beautiful color display here on my ipad, you're not going to see it but i'm going to hold this up. you may be able to understand some of it. this is an example of the breakdown -- and these are on both sides, so i have three documents here of the breakdown of the schematic just like a

corporation would be set up. president, ceo, vice president, et cetera. this is the complication of the legislation that we have and those involved. look at the subcategories, undermete the subcategories underneath the subcategories on both sides of these documents and the third one that i hold up here as well. then we get into issues such as payment. who's going to be paying, how are they going to be paid. what will the courts do about this? and i do not even have the court schematic here showing the process that one would go through if there are appeals so i think i got my point across here about how complicated this is, how complex this is. but we're also talking about fairness and unjust to song writers and writers and individuals not being kpn sated, particularly those because of the legislation from 1972 prior

to 1972 and that had something to do with state law which is an issue that i think can be dealt with today. so as trying to be an individual that is learning as much as possible about this hearing from everyone, some are you are disappointed because i haven't sid which way i'm leaning on this. as a prosecutor, i want all the information at my fingertips because i make a decision but also i am asking everyone that i mentioned here today to please, please think about sitting down with us in a group face to face. it's real difficult, it's more difficult to sit face to face and look at each other eyeball to eyeball and say no as it is instead of over the phone or an e-mail. so maybe we can get together and you folks can help us get a consensus on this and that will resolve the issue. it's a monumental task but we will attempt it.

my time has run out thank you very much. >> mr. conniers? >> thank you chairman marino. let me ask paul williams this question. do that you believe the consent decree system severely limits ascap's members from achieving competitive market rates for their works? >> congressman conyers, you absolutely go to the heart of the reason that i'm hear and to address something you just spoke about, one of the things we're denied because of the consent decrease is the right to bundle rights. you go to all these different places for all the abuses of our music, one of the things by changing the consent decree you'll give chief justice would be hoping you'll give us is the right to bundle these rights. it's exhausting for people to go

to one place to another to another for these rights. we can handle this -- there are two copyrights. there's a copyright for the original material, there's a copyright for the recorded material. i think it's incredibly complicated what would be a great solution is to bring it back to -- and let us control our future, let us control our copyright. the last thing we need is there-to-throw more into the government's lap to deal with it for us. >> so the decree hasn't accommodated the rapid and dramatic changes technologically that we're all talking about? we have to end up in a rate court on top of it all and i think that this is the new situation that we've been in since the decree and i'm hoping

that all of our members on the committee will take this into account. now, i want to say to broadcast radio's played an important role in the lives of people all across the country. broadcasts have educated listeners to important events, emergencies, and a lot of new music, including jazz, i might add. . we will hear -- we want to work with the broadcasters to continue to do this work to all the communities. now i just want -- if there's anybody of the nine witnesses here that oppose creating an am/fm performance right, would you just raise your hands so

i'll know who you are? okay, we've got a couple hands raised and now that you've been identified and branded appropriately -- [ laughter ] but i thank you for your candor and frankness about this let me just ask, has the lack of -- i'm going ask this to -- i'm going ask one of the hand raisers, warfield, has the lack of a public performance right for terrestrial radio impacted the overall music marketplace? >> mr. conyers, i would say i've been in this industry for over 37 years and what's always been true during that period of time is the relationship that radio

stations and record companies have had. we've supported one another consistently through that period of time to the point we're looking at a recording industry even with the challenges it has just like the radio industry has its challenges. still the strongest recording industry in the world. i've heard remarks about who we can be with that we're not proud of but we have a recording industry here that's larger than any industry, any recording industry in the market. >> thank you. let me get one question into ms. cash before my time expires. it's about the respect act that i introduced with our colleague congressman holding. do you think it would address the payment disparity and do you think it important that we fix the loophole in the copyright protection for sound recordings before a 1972 which refuses to

pay the older pa eer artists? >> i thank you for introducing that bill. of course i think that we have to fix that loophole. the example i gave you about my father, his royalties going to someone else who did a cover version of his song, it just -- it's hard to even understand how that could be possible. but these legacy artists, some of them they're growing older, they're kill, the ones who are still around, they have to go on the road when they would rather not to make up the money they would have received from these royalties. it's heartbreaking. i see this all the time. i know these people in that generation before me who are still around. >> thank you so much. mr. chairman, i yield back. >> mr. conyers, even though you have exposed certain catalysts i think you'll be able to walk the halls safely. >> i'm more worried about them then me. [ laughter ] >> i won't go there.

the state will recognize mr. issa. >> thank you, mr. chairman. chairman goodlatte has said he wants to do comprehensive copyright reform and i'm going to take this opportunity today to challenge all of you since you sort of represent, no kidding, the spectrum, the width and breadth of the problem in music both written and obviously the broadcast of the performance and we'll just go back as we often do here, especially for the non-lawyers who are here on behalf of the constitution to the cause and i'm leaving words out because i only want to have the part related to copyright, not the part related to patent. the constitution clearly says that we have two promote the progress of useful art for limited time on behalf of the

authors exclusive right to the respective writings. now, it doesn't actually talk about the performance but we've all come to appreciate that that a performance is, in fact, part of that structure of writing. the constitution is an interesting document to go back to because sometimes it's illustrative of all the mistakes we on this side of the dais and presidents have made during their time during our job. we've totally screwed up your industry relative to the constitution. if i read the constitution very clearly, although to promote does say that in fact what we do in the way of granting you exclusive rights for a limited time is for the purpose of, in fact, enhancing commerce. i don't believe that the founders ever thought that the promote would be to exclude a

performance from being paid if, in fact, the ownier of that who had the exclusive right, which to me is the right to exclude, didn't want it to be played for free. and yet we don't have that right and i've joined with mr. conyers for years in trying to rectify that. but i think there's a bigger problem here today and i'd like you all to comment on that from your respective positions starting with ms. cash. if, in fact, the intent has always been exclusive right -- and i'll read that back words -- right to exclude -- belongs to the author or to the performer or to be honest to the many people that are part of that collective process that we'll just call a right, if that right were to be restored, wouldn't we essentially eliminate all of these court decisions, all these consent judgments and most of the laws that we've helped perpetuate, including the

exclueses? and we'd be down to congress determining that there had to be a fair use under free speech and so on, we'd want to have that sampling but not sampling as a ring tone necessary, those kinds of things. and wouldn't we then empower all of you to come together, mr. williams, come together and decide collectively you're going to offer your right us there pooling or individually you're going to retain your rights if you're just, say, the beatles. isn't one of the fundamental things we should consider here scrapping generations of legislation that now cause us to infinitely, try to figure out whether, in fact, pandora can effectively compete against broadcasters effectively compete against satellite effectively compete? because i'm seeing all of you wanting to get a level playing field but not giving up the playing advantage you have, if you have one. and i don't think congress can

do that. i'll start down at the end and just say how do you see possibility of us scrapping almost everything we've done and giving the opportunity an -- industry an opportunity to rebuild against the original intent of the constitution? >> can i just say the question itself gave me hope? so thank you, that was so well stated. i would hope that exactly what you just said that restoring -- although i don't know if restoring is the right word because it was never there, performance royalty would solve so many of these problems that you could then build from the ground up to create a new paradigm. i don't know but i hope so. i know a that for every mick jagger in the world there are 10,000 musicians who are in the trenches. >> they're all younger. >> they're all younger, too.

and they depend on the royalties they're not getting and the lack of a performance royalty -- i'll just say this quickly -- is -- it's kind of a way of saying music should be free. if music should be free i'm willing to have that discussion when musicians aren't the only ones who aren't being paid. >> i really do want to hear from the broadcasters, too, because you've inherited your business model, you didn't create it, your companies' owners bought based on a value that we put in that when mr. conyers and i tried to change the law to a certain extent we're taking away value and i want to be sensitive to everyone at the table has inherited an unfair deal in some way. >> the red light has illuminate sod we'll hear from two witnesses? >> who's most motivated to answer? [ laughter ]

>> it touches on what mr. marie know was talking about. a fair market is a free market with a level playing field that adequately compensates that serves the public trust. so if we start from scratching that will be the guiding princip principle. how do we make sure small creators, big creators and the public all of their interests are well-balanced? >> i think it's something that the congress should consider and, you know, and as part of that conversation, please take into account the concentration of ownership in the music industry and as you think about who's sitting across the table to cases, it isn't ms. cash.

it's universal music, it's sony. it's warner. the concentrations i go out every day and try to negotiate direct licenses, and over the last six years, i have negotiated 100 direct licenses with the music industry, none of them with major labels. >> gentleman's time -- sorry to cut you off, but the time has run out. >> my questioning time ran out, but answering time, i thought was unlimited. i'm only kidding. thank you. >> thank you. the distinguished gentleman from florida. >> i thank you, mr. chairman. thanks for holding today's hearing. it's reamy easy to decide for some that the way things work today is the only way that they could work in the future or that the -- what is by all accounts an absurdly complex system that has developed over the past 100 years deserves the credit for

the thriving musical legacy. some aspects of the musical system have helped, but many know that it has grown stronger by working around too frequently revisions over the previous decades have been reactive and all too often parochial, preserving one element without making enough effort to look at music licensing as a whole. while it's tempting to point fingers and there's been plenty of that today, i think it's helpful to recognize that everyone has the opportunity, everyone, everyone at this panel, our previous panel, has the opportunity to benefit from new growth in market if, as mr. marino said earlier, we could agree on a basic framework that incentivizes and rewards creators while give companies that profit from the mudzic a fair and transparent way to do it. everybody has to have an opportunity to succeed together, and new entrants have a chance to continue transforming the way we listen to muchic in the

future, so that's, i think, how we ought to approach this. there are some issues that jump out at us. before i get into my questions, i wanted to throw out one example of what i think represents a failure of the past systems, specifically the pre-72 distinction. this, for the youngsters in the crowd, is an album. this album that is neil young's harvest, which includes legendary songs like old man and heart of gold. it was released on february 14th, 1972. the precise cut-off for pre-'72 recordings is february 15th, 1972. that means that any track from this album, this best selling album of 1972 can be played without paying for it. but if it had been recorded on february 16th, released on february 16th, just a day after its release, neil young's songs

from this album would be covered with full federal copyright protection. now, you said earlier in exchange with mr. nadler, you say everyone should be paid. why shouldn't that include legacy artists? >> well, where believe it should. i think congress has had two shots at this and has rendered in opinion both times. first back in 1972 when it decided to distinguish for reasons i'm not familiar with, between recordings between that date and after it. and then the second time, 20 years ago, when it granted the sound recording performance right and did not extend that right to pre-'72. >> so if congress acted today, you would acknowledge that that's consistent with what you said earlier that everyone should get paid? you're supportive of those others. >> i would be supportive of closing the loophole that mr. conyers referred to. that includes treseral radio. >> let me get to mr. christian

who said something earlier i appreciated. i think it helps us focus a lot on what we're dealing with. you said in your testimony that with particular reference to the recurring demand by the recording industry for sound recording performance right to be imposed on terrestrial radio, understand the radio industry is not the vast pot of riches that can be tapped as a bail-out for the recording industry that addressing a decline in its own brick and mortar income. congress unambiguously intended for in exchange for support, they should be treated differently from other platforms and that premise hasn't changed. then you go on to explain that any change in our approach will be met with opposition because it would cripple a radio industry that's been financially treading water for years now. i would respectfully suggest that this is what we're trying to get at today. going from the claim that there shouldn't be a performance right

because the music guys haven't been able to figure out their industry, and we shouldn't impose it on the radio industry which you acknowledge is, as you put it, treading water, has been treading water financially for years now, that doesn't help us solve the problems. help us address the position that we're in. and when you, as was included in this document that was referenced, i think mr mr. warfield, in your testimony, it says that conventional wisdom is that radio air play stimulates record sales and that it quotes a study from a law review article from 1974, and it talks about a survey of rock music buyers that found that albums were purchased because the first track was heard over the radio, but that survey was conducted in 1972, i acknowledge the role of the broadcast radio played. the important role it plays in

our communities, but for us to go at this issue as if where we stand today in 2014 is somehow unchanged from the industry as it existed decades ago, i don't think is appropriate, and i don't think it's fair for all of the rest of us new market entrants, musicians and the rest. i hope that as we go forward in this debate, we can acknowledge the important role that everyone in this panel plays in furthering the music industry and providing unbelievable music and outlets for ms. cash's work and for mr. williams' work and all the members, but let's do it in a way that realizes if we only take the parochial view of our industry, we're never going to come up with something that works for everyone. we're probably going to fail and that might satisfy some of you for a short time, but we're going to be right back at this again in a couple years if we haven't had a chance to take that, and i beeyield back.

>> the distinguished man from utah is recognized. >> glad to see sow mane of you are here having this discussion. i particularly have a keen interest in internet radio. where believe it's a big part of our future. it's where i see my kids enjoying music they probably would have never seen or heard otherwise. they wouldn't have gotten it on terrestrial radio. they probably wouldn't have been able to afford the albums or have the chance to understand or see that. i have perbly been exposed today a whole host of artists i now enjoy on a regular basis but i would have never heard of before. i'm also deeply concerned the marketplace for radio isn't working. we can point to one that has been highly successful in pandora. i enjoy them, but it does concern me it's not much more prevalent than that, and even under their model, they're not making the kind of money even though some people want to attack some of the ownership and some of the others for making money along the way. the reality is, the copyright

royalty board has twice tried to set the royalties, and twice the united states congress needed to come in at the last hour and th help save the deal and change it so it would work, so we don't want to keep doing that. anytime you have to go to congress to get a fix, it's probably not going to turn out the way anybody wants it to turn out, so with that, i have deep concerns about how do we make this a viable business model going forward so that everyone can win along the way. and everybody can get paid along the way. we have two standards. the 801-b, and the willing buyer willing seller, which i think is grossly misnamed, to suggest it's willing buyer willing seller and not have the information at your fingertips is grossly misleading. so my question, let's go to mr. sherman, if i could. from what i have seen, in my limited viewpoint, it's been a

little inconsistent. on one hand, you like the 801-b, and sometimes you don't like it, depending on which side of the negotiation you're on. can c could you help clarify that to me. >> we're willing to change it to a willing buyer willing seller, but we want it to be part of comprehensive reform. we don't want to pay on one standard and not get paid on the same standard, but we think the right standard is willing buyer willing seller for all creators across all platforms. >> would that include in the negotiation having all the information available for all parties? is there anything you would withhold from those negotiations? >> certainly, the crb process has all the information available to all parties. how information can be disseminated when there are a lot of private deals with nondisclosure agreements and so on becomes more complicated. >> that's why i'm asking, what would you do. if you're having willing buyer, willing seller, you have to come to the table with all of the information, not just hide part,

which has happened in the past. would you disagree? >> i don't think it's hidden because all of the information becomes available to the parties and lawyers litigating the cases have all the information. a lot of those settlements take place after that information has completely circulated. you know, one thing i would like to comment on is you talk about whether internet radio is profitable and so on and so forth, but you look at a company like amazon, which has a $75 billion profit, excuse me, capitalization rate, everyone would consider them a huge success, but their profit last year was 1%, $274 million on $70 billion revenue. >> this is part of the concern. some of the biggest players into this music world, it's good to see amazon and apple get into this part of it, but when you saw rolling stone and mtv and these other organizations try to get in the space whose forte into the music industry, they

have never been able to make it a go, and they started into this and they had to let go of it. others could not make a go of it. i need to go to mr. harrison. i want to understand what would happen to pan doura if congress had not stepped in and fixed what happened at the copyright royalty board. >> well, the crb rates are obviously part of the public record. they are multiples of what the negotiated settlement was, the pure play rates. i guess you just have to do the math, obviously, if we're paying 60% to 70% of the revenue under the pure play rates, if the crb rates are 2 or 3 times that, i'm not very good at math, but i don't think at 120% of revenue, we can make it up on volume. >> what do we need to do to insure more transparency, and why don't you have more competitors? >> it's an interesting question. i think you have touched on it a little bet. the rates certainly are an

issue. the entrants we have seen recently are all engaged in other lines of business, apple, google, amazon, and music is really an ancillary product that is designed to sell the primary service. we've had east village radio, which is a long standing internet radio service and mr. nadler's district, and that recently went out of business because they couldn't afford the royalty rates. so certainly, if you look at the comments that came in from the copyright offices and others of inquiry from a large number of constituents including mr mr. frear, there are some process improvements that need to be made that would improve the process and potentially improve the outcome. >> i wish i had an opportunity to hear all your answers. thank you for your never time. >> the distinguished lady from california. >> thank you, mr. chair. my colleague, mr. issa, had asked a question, and i'm not sure everybody got a chance to

respond. i just want to ask it slightly different. i believe he said if we were to scrap copyright and start over. what would you like to see chang changed? my question is could you brie y ly explain one provision you would amend in the current law. i know several of you didn't have a chance to respond. maybe you would like to take the opportunity now. >> from the radio broadcasters -- ymg sorry, i know mr. christian and i represent radio. we haven't had much to say here today. a lot has been said about us. we haven't had the opportunity -- >> take the opportunity now. >> to say much. i'm hearing a lot of comments about the industry that provides free play for free promotion, and has done it for 80 years. we're talking about radio itself has been driving it. i have heard radio that doesn't drive record sales. congress deutsche left, but there's a 2013 study recently

issued that indicates clearly more than any other platform, radio air play drives sales. even in digital platform, it drives sales. we have an industry here that has really helped put the other business, give them the opportunity to go out and create a new business model. unfortunately, even on the radio side, we're not able to part in the digital side. we pay in. we pay hundreds of millions of dollars. we pay tens of millions of dollars to sound, and we parl on the digital side, but many broadcasters unfortunately cannot make a go of that as other entrants have found with the way the laws are written today. we can nlt make money. we can spentd money, we cannot make money. that is not a model that is going to be a healthy one for any of the participants here. from an nab perspective, we would like to see changes made in the streaming rate standards so that all of the participants here who all have concerns there

can participate more fully and grow a platform that will benefit artists, writers, performers, labels, all participants here. >> other examples? anybody else? >> i think one of the things we would also like to see from congress is at some point in time, if you all could define what a performance is. nobody's yet been able to tell us what a performance is. if you listen to sound exchange, they'll tell you it's three seconds long. they won't tell you if it's the beginning, middle, or end of what it is so we're subjected to royalties that we can't even get a consensus as to what our royalty payment is for, especially on the digital streaming part of it. on the other part, we really must ask for oversight, especially in the advent of new performing rights organizations that are forming right now. there are no barriers to entry for performing rights orcizations. you need a catalog, composers,

and unless those rights are protected for the aggregators or some oversight, we run the risk of finding as we have with c-sac, where there are anti-trust sites, which is why the 801-b is more homogenous than the willing buyer willing seller. we really do need this oversight for an industry. we have 10,000 different performers -- different licenses. to be administered, which is why the blanket license is important that we keep it in place, which is why the consent to create is important, because otherwise, you can imagine the madness of trying to find a way to deal with individual radio stations ipyour home district, and every district up here to give them a license, a record keeping and everything else. and we also, one final thing -- >> thank you, and then i want to move on. >> we need a transparency in terms of identification of catalogs. we need to be able to find out on a daily basis on whatever who owns what, who the performers

are and what it is. >> thank you, and i believe -- >> thank you. >> you look like you want to respond. >> i would like to respond to our friends at radio. first of all, the concept that this sound recording internet radio business is not working, i'm not so sure that the proper image has been presented to the committee. the fact of the matter is it isn't just pandora who last year alone noticed a non-gap profit, but the head of clear channel announced just a few days ago that the i heart radio that is terrestrial radio simulcast online, had 50 million users, and has made several hundreds of millions of dollars, i believe, or hundreds of millions of dollars, which i assure you is vastly in excess of the content cost from where we sit. secondarily, we have 500 more services now using this license, the sound of change administers, 500 more than were there two years ago when i last testified before the committee. you know who the majority of

those are? the majority of those 500 are broadcasters like mr. warful is speaking about, going online. >> mr. williams. >> you asked what we would change right now. it's thanks to representative collins and jeffries it's been offered to you right now, which is the song writers equity act. it fixes a small part of a really large problem for us. it fixes it immediately. i agree with what mr. christian has said about the value of the blanket license. it's a wonderful way to come together and simplify the system, and for somebody like pandora, 70% of their income that is rolling out for royalty payments, i have to remind everybody that they're getting about 1% or 2% of that. i'm not sure, i won't say it's 1%, but it's very close to that. it's a tiny, tiny part of that. so i wouldn't pretend to tell you how to adjust your business model, but there's some way to do this so music creators who create the one product you have

can be properly compensated. >> thank you. >> the gentlelady's time's expired. the distinguished gentleman from georgia, mr. collins. >> thank you, mr. chairman. i think one is sitting here today, one thing i have tried in this whole process and many of you on this panel, but many of you in the second, third, and fourth rows back, we have talked many times, and yes, the song writer equity act is an issue that we have brought forward. there's other issues that have come before from performers roish to others. i have been consistent that the one thing i feel is that the creator in this process and there is a valuable inherent property right there. i think i applaud the supreme court this morning for inherently seeing that there's a creative property right. now, that does not mean that the broadcasters and i will always get along. probably not, but that's okay. there are things in this debate we can all look at.

i was thinking about it just a few minutes ago as i listened to all of you. the one thing i have tried to do in this process is i have had interesting comments, not to me, i heard about it when you go to other places, so yes, it comes back, is i want to take an arm from one and a leg from another and fix this all together, but what i have found in the last little bit is what has to happen in this process is one, bad business model, five years ago could now be the bad business model today. and you don't need congress to come in and prop up either one of you. you need a process in which we can look at this, and we fix it from a holistic approach. this says that everybody is included. that everybody has a stake at the table. the pie is enlarging. and it was interesting to hear a second ago from my friend from pandora which i listen to. a lot of these went out because they couldn't afford the rates. there's a lot of businesses in

this country that go out of business because they can't afford their costs. that's an issue we have to deal with on the broadcaster side and the digital side. the performers and the copyright holders are in the middle. that's the one thing that i am looking at. one of the things that concerns me, though, is that we're wanting many times to fix today's problems, and i have shared this when you come in. that's not my goal. my goal is to fix this problem when pandora was, wow, you still listen to that? unless they have changed greatly, no offense to them, but i think the radio, when i was first listening to an 8-track tape, i told ms. cash, was her dad listening to a boy named sue live from san quentin, it all developed. the thing you have to understand is we come together, but you've got to remember that the bottom line, there is a profit right interest that many of you at this table make very good money off of. and that has to be rewarded.

at all levels. >> i appreciate him bringing in the background musicians and others. the problem is, though, if you continue and if we continue in this round of saying, well, i've got to protect my model and you've got to protect your model and we don't get to that point, my question is where are we at 20 years from now, when this panel maybe looks completely different? where are we at? so i open up a question to you. i don't want your answer for today. for broadcasters say protect our radio, where pandora says look at our rates. where are we going to be so we're not coming back, as my friend from utah said, every time there's a problem at the rate board, we run to congress to fix it. i was an attorney beforehand, the last thing you wanted to do, and i did counselling and dwrs work. the last thing you wanted was for the judge to make a decision. because in the end when the judge makes decisions, both parties are unhappy. when you make the decision, then we go, mr. warfield, we have 1:10, you have 30 seconds,

mr. williams, you've got 30 seconds. tell me what you envision, how we can work this out so we're not propping up bad models either way. >> i think there certainly needs to be a close look at the digital rates that are being charged. we would like to participate and grow there. we think it helps all of the stakeholders here. the one thing i would avlg the committee to keep in mind is the consumer, the user. we talk about terrestrial radio. it's free. it remains free. there's no additional costs. let's keep them in mind as we talk about what the other businesses, how this is going to be more efficient for them and more cost worthy, but the consumer needs to be considered here also. >> time. mr. williams. >> we have a recovery, the song writers equity act. that's a great beginning. the people we need to think about are the young song write s s starting out, trying to have the life i had. i have a daughter who is a social worker. she got that because i was proper paid for the hard work i was doing.

what we can do is give more control back to the song writers. we can move, yes, we don't want the judge to make all these decisions, but we can move back to an arbitration panel which makes it a speeder, more efficient way to deal with our problems. i think that it's a process that's going to take longer than any of us want it to take, but the fact is if we don't fix -- if we don't step into it and make that first adjustment, people are going to wind up getting day jobs instead of writing songs for a living. >> the industry is moving forward, not moving backwards. it's not going to be automatic, as the song says. you have to move forward. you all have to come to the table and talk about this. >> thank the gentleman from georgia. the distinguished gentleman from louisiana. if you promise not to show up at the ball game tonight, i'll give you ten minutes. >> i think we're ten minutes, all i can do is get in trouble. i'll take the five, but thank you. let me just pick up where my

colleague mr. collins left off. that is, you know, and i think mr. freer mentioned congress had two chances to get it right with the 1972 and the legacy royalties, and we didn't. all i can promise you is if we solve this problem, nobody is going to like it. and it's probably going to be wrong. because we're not the subject matter experts on it, the technology moves so fast. and we will probably screw it up. but, i say that to say you all are at the table. you all should be in the room trying to figure out who can give and come to some sort of solution, and the other thing i would tell you all, just to be honest, is that nobody has a better bargaining position. because if we do, we'll probably start from scratch, and nobody will like the results. so that would just be my recommendation. and you know, the comment was made earlier that for every mick jagger, there's 10,000 artists in the trenches. i think they all live in new orleans, by the way.

and i want to make sure that they have an opportunity to continue to do and follow their passion and their dreams, but at the same time, be compensated for it. and i tell people all the time when i speak at schools, follow your dreams, do what you love. if you do it well, you'll make a living doing it. and i want to be able to look those kids in the face in the performing arts schools and things in new orleans and actually mean it. and it has benefitted so many people in new orleans, and i would just like it to continue and to be there for the long term. mr. warfield, let me just ask you a very direct question because we beat around the bush and nobody says it. what impact would it have to your industry if you all had to pay the performers, the rights and royalties for what you put

on the radio? >> i have testified to the financial, potential financial impact to radio broadcasting. i have been in the business for 37 years, i have been in radio stations that have been sold. i worked for a wholly owned minority radio company that at one point was the 22nd largest in the company that no longer exists today, and we made it clear at that point that we could not afford to pay a performance royalty if it was imposed upon the industry. there are severe financial difficults that many broadcasters would experience if that were the case. i have been in this for 37 years, doing it for tlaefrb years, serving the comubts that our station services, the communities i came out of quite honestly in washington, d.c. continue to do that, not to serve the stake holders, but they benefit from what we do as terrestrial over the air broadcasters for free. >> let me ask you a question. the station you talked about that closed, closed anyway. do you think that this would put, for example, clear channel

out of business? >> there are many different sized broadcasters, you know, there are -- >> i'm using clear channel. speaking about clear channel. >> they are contributing and participated in the arena. you could not afford to do that in a major way. we could not afford the cost of participating in it. i think everyone up here would like to see the pie grow. we would like to see the digital platform grow, but not at the expense of our countries. >> you mentioned if everybody was contributing, 1972 was a number that congress picked. are you saying if we decided to pick another number that went back further, as long as everybody had to pay it, you are okay with that? >> quite honestly, on this issue, we have been open to any number of solutions for years. i have had many discussions with major labels, they don't want to find a way to compromise on the issue, and i'm happy to work with congress, with sound exchange and the major labels to

find some appropriate ground in the middle that as i said before, i don't know why the choices were made, and maybe there are other business reasons, good policy reasons why the choices that were made were made, and we're wide open to the discussion. >> well, i see that my time is about to expire. i would just say again that i would love to have balance on this and make sure that everybody at the table continues to thrive. we don't want to put anybody out of business, and we certainly don't want to send anyone to bankruptcy or influence anyone to stop following their dreams. help us help you, and that means get in the room and figure out ways to come to some sort of conclusion. with that, mr. chairman, i yield back. >> thank you. the distinguished gentleman from missouri. >> thank you, mr. chairman. it's been interesting participating in these review hearings for the last year. serving on this committee, and

one common ground i think that i have heard from all of you and the folks that i have been meeting with in the music industry throughout is that we all love music. we just got to find more common ground. and i look forward to working with all of the stakeholders to try to get that common ground, but i do have a few questions. mr. huppe, i think it would be helpful, at least to myself, for you to lay out for us the standards that are used for determining royalties with respect to each copyright for a performance of a song, for instance, who is a willing buyer? who is 801-b, who is set by the rate core? could you tell me briefly who is subject to which standard for each of the two copyrights? >> sure, thank you, congressman. obviously, a great question and a complicated question. i think the best way probably to answer that is to give you an example. and the example is this, let's say you're driving your car down

the road and listening to an excellent rosanne cash recording. and if you happen to be listening to that over your cell phone through an internet radio station, chances are most of those are set according to the fair market standard value, willing buyer willing seller, and the rate that the service would pay for that would be set by the crb, and it would be anywhere between an eighth and a quarter of a penny for that stream. let's say you decided to stop doing that on your cell phone and switch instead to get the exact same awesome rosanne cash sound through satellite radio. that is set by a completely different starbd, the 801-b standard, which we believe is below market value. so the compensation flowing from that would be set according to different rules, and they would be pay about 9.5% of their revenue pro rata across all of the streams. and then let's say for whatever reason you got out of satellite

and had to go with good old am/fm, that would be easy because there's no right, no rate, no crb, and the answer there is zero. that's the same reporting coming out of the same speakers in the car, hitting the same ears, each one of those three is set differently according to different rules and that's just not right. >> okay, mr. harrison, you mention in your testimony that pandora has paid $1 billion in royalties. is that correct? >> yes, the summer we will have paid in total $1 billion in royalties. >> okay. then my next question is, how is the that song writers and artists claim they're not getting paid? >> well, that's an excellent question. today, pandora is the highest paying form of radio. we pay higher percentage of revenue than either terrestrial or satellite radio. we'll pay north of $400 million in royalties this year alone. to the extent the copyright owners believe there's a different or better allocation

of that revenue, certainly we would say that the copy right owners themselves are better situated to make that relative evaluation. >> mr. williams, would you like to respond to that? >> i totally agree that the cover i own has been sold to people to make the decisions and all. you know, i have said it again and again, and i said it in my opening statement. the fact is we are a tiny percentage of the cost. we need to find balance in this. when the song of the year, the grammy winning song of the year from 2011 is performed 72 million times at pandora and the four writers each get less than $1,500 aapiece, there's something terribly broken in the system. you can take from my comment we have a major problem with pandora. we have a major problem with pandora's balance of payment. we're not going to suggest how they adjust that, but fair market will tell, give us a chance.

we don't have the right to say no. this case, we don't want to. we want our writers and copyright owners to be properly compensated. >> the song of the year in 2011, was that need you now? >> i'm going to turn to my contributor. >> the song of the year. >> it was need you now. >> 72 million. >> 72 million performances. >> in other words, for -- give you the exact rate of exchange, we get 9 cents for 1,000 streams at pandora. roughly, i think it's a little less than 9 cents. you just -- you just don't build a kingdom on those kind of dollars. >> ms. cash, would you respond any differently? >> i'm sorry. if all that money was paid out of pandora, if it was paid in an aggregate, i don't know how it was distributed. it didn't come to artists. not withstanding my harsh words

to them, i want them to succeed. i see the future. i want all of us to succeed, but i just have to point out that all of these gentlemen on the panel would not be here had songs not been written. and it's in their best interest to get us paid so we're inclined to give them more songs. >> thank you. >> i thank the gentleman. the distinguished lady from washington state. >> thank you, mr. chair. and thanks to all of you for being here, for all of your time. i think we seem to be clear recognition across the board here that we are seeing a change in business model, definitely towards digital transmission of music, and that's where the industry is headed. and even broadcasters are talking about the need to move, you know, to streaming, et cetera. i wanted to ask you, mr. warfield, you have folks who are also streaming content and digitally providing content.

how are you seeing the business model move even for some terrestrial stations into the digital world? >> we would certainly like to participate more. the rates that we pay for digital streaming is probably double what some other participants do pay. and as i have indicated to the panel here, it is not economically feasible for most broadcaster, particularly the mom and pop broadcasters, not the big guys that everyone tends to focus on, but what makes up most of the broadcast in this country, have not been able to find a way in paying those kinds of rates to be profitable. many broadcasters have made a decision not to stream. >> so you're not seeing folks move that direction, and seeing more of their, you know, their audience moving -- >> we still reach, congresswoman, we reach over 240 million people a week with radio. we still have the largest audience out there, which is why radio is the number one driver of music sales, whether it be

sales in a retail outlet or digital downloads. so our audience is still loyal to what we do. we are free. no additional cost that's there for them, and we provide a lot more than just playing music. so our audience is still supportive of the business model we have and have been able to develop with the record industry. >> given we're talking about music today, do you see a change inwould you say there is a change? we're talking a lot about where, how folks are listening to music today. would you acknowledge there's a change in where things are heading? >> there's change. i think all of us listen to different platforms. i have been in radio for 37 years. i have always listened to radio. i still buy music. so there is a change. we want to participate in that change occurring, but there's still a basic broadcast industry here that our listeners, our audiences, our communities still rely on, and they still support. >> i have a question, maybe, for anyone who has an answer on this

one, which is we have talked a little bit about internationally how our laws are different here versus around the world. are there a particular model you have seen in other parts of the world that you think are, are good examples of where we should be headed? >> international models pay almost in every country of the world with very few exceptions. we should simply follow that model. it's very simple. >> beyond performings, paying specifically, there are other specific unique aspects. >> there are other models in which music publishing rights are paid on a percentage base instead of on a cents based system. we could learn from that. there are definitely models we could be looking at to try and redefine something for the united states. a lot of the questions have been what specific changes would you make? but the real answer is, we have to change everything. you can't pick one piece.

that's what we have done for the last decades, was pick one problem and fix one problem at a time. we do really need a holistic solution. >> yes, mr. williams. >> if i may, one of the things the europeans have that we don't have is a limited grant of rights. for us, as rights holders to be able to license some of our rights directly would be a great improvement. >> yes, sir? >> and then just to echo what cary sherman was saying, it is that we don't have a broadcast right here that's the big difference. we do need a broadcast right, and it will also unlock lots of money from those international markets with reciprocity. our creators here will be able to get paid for their performances overseas. >> okay. thank you varmuch for your time. i yield back my time, mr. chair. thank you. >> thank you, mr. sensenbrenner.

>> i thank you, mr. chairman. this brings me back to what i attempted to do and succeeded in about 15 years ago. with the fairness of music licensing act, which was put in the copyright extension law. and that was easy compared to this because the people who were for my bill were those that didn't have any content over music, like retailers and restaurateurs, but they ended up getting nailed with a licensing fee, and everybody else was against it. and you know, i do remember very vividly that my good friend m mr. koval had a hearing in nashville on that subject and i had to be driven back to the airport in the car of the united states marshal who was a little worried ability my safety. and he stayed with me until the wheels were up. now, i did have a long series of debates with our late colleague sonny bono, and that ended when

he was kind of shedding tears about the changing the music licensing law before an audience of the national restaurant association, which was very sympathetic to my standpoint, and he was very eloquent, i got up and turned around and said what mr. bono is telling you is called, i got you, babe. now, with this background, here everybody at the table has a different viewpoint on this issue. and i think that getting you all together and getting on one page will happen probably two days after the sun rises in the west. now, you know, that being said, let me ask mr. warfield a couple of questions. and it basically goes, under the current system of licensing and royalty payments, have record

sales gone up? and do you believe that the free over the air music that you and your members broadcast have a lot of people going and actually buying music and paying the royalty on the music that they buy? >> from what has been recorded by the recording industry, music sales have gone down, i believe, in terms of hard copies. not through the fault of anything that radio has done. we continue to freely promote and play this music, and our audience does continue to go out and buy the music. within that system, between radio and records, we're still driving our consumers, our listeners to go out and buy music. there's no other way to do it. not recording what we're doing on the air, stealing that c content by recording it and listening to it. there are alternatives. they could go to digital

platforms. if they go there, they have to pay just for the right to listen to what is there. there's no charge to do what we do. there's a digital model out there that none of us has really found a way to make it work. and i think we can all sit here and agree there's a challenge there that we have as a business model that can hopefully grow the various platforms, benefit all of the stakeholders, the recording industry also, not taking anyone away from radio. >> you know, i'm kind of a simple country lawyer. and what you say that the existing system is that you give them free advertising by putting their music on the air, but you don't have to pay for giving them free advertising? >> free air play, free promotion. >> promotion and advertising are kind of synonymous, aren't they? okay. so what i'm hearing from some of the other folks is that they

want you to pay for giving them free advertising. is that kind of a simplistic way to get to the bottom of this? >> i have heard that from some participants, but the one thing that i will say relative to what radio does, radio has helped develop, helped the record industry develop, being as vibrant as it is today, even with the financial difficulties it has, we have always supported the writers of the music. we also helped to develop the careers of the artists we're talking about in some cases today, to develop careers that in many cases today they may not be supported by record labels because of air play that we're doing over the air, free, continued to promote what they do, they can still tour. whether they choose to tour or not, that's a personal decision, but they have the opportunity to do that. we continue to support those artists in many ways. >> my time is almost expired so i yield back. >> i thank the gentleman. the distinguished gentleman from new york.

>> i thank the chair, and let me also thank each and every one of the witnesses for your presence today and in particular, mr. williams and ms. cash for your advocacy, for the creative community, and on behalf of your fellow artists and your fellow song writers. let me turn now to the subject of internet and/or satellite radio, and let me first say that i believe the success of internet radio is critical for the overall music ecosystem in terms of providing a viable, meaningful alternative to the piracy that was previously taking place and was extremely rampant. that's a point i believe cannot be overstated. i do believe there are a few issues relative to the compensation structure and the business practices that i wanted to explore. so let me start with pandora, and mr. harrison. now, i believe you testified earlier today that one of your business practices is to insure

that artists receive a fair share. is that correct? >> first of all, congressman, thank you for the kind words about our service. what i was speaking about is the value that statutory blanket licenses have, not only for services like pandora that allow us to license content efficiently but the song writers and artists actually participate directly in the royalty streams. >> okay. now, am i correct that pandora, however, not withstanding what you just indicated, currently refuses to pay for the use of pre-1972 recordings under either state or federal law? >> we do not pay under section 114 for the performance of pre-'72 sound recordings which is federal law. >> but you're also contesting the rights of recording artists to receive any compensation in state court as well, correct?

>> we do have pending litigation in the state of new york and yes, we disagree with the claims that the record labels make in that case. >> pre-1972 recordings are an important part of your business model, true? >> yes, they are. >> you have, for instance, '60s oldies channel, is that right? >> yes. >> and a motown channel, correct? >> i believe so. >> '50s rock 'n' roll channel, true? >> i believe so. >> golden oldies. >> you're aging out of my demographic, but i believe so. >> a do wap. >> i believe so. >> a classic soul channel, correct. pandora doesn't pay anything for any of the sound recordings played on any of these six channels, true? >> if the recordings were may after 1972, that would be correct. >> okay. before 1972. correct? >> correct. >> okay, so for instance, respect, which was reported by aretha franklin in 1965, every

time respect is played, on pandora, aretha franklin doesn't receive a dime, correct? >> well, pandora would not pay performance royalty to the record label. she would be paid if she were a song writer. >> okay, so my girl was recorded by the temptations i believe in 1964. the temptations don't receive a dime of compensation from pandora every time this extremely popular song is played, correct? >> again, if you're talking about a payment to the record label, that's correct. if they're songwriters, they would get paid. >> okay, the same would be true for soul man, recorded by sam moore in 1967, change is going to come, recorded in 1964 by sam cooke, stop in the name of love, recorded in 1965 by the supremes. i would suggest that the failure to pay recording artists for

pre-1972 recordings is not a fair business practice, and in the context of this overall discussion, it's a problem that should be voluntarily resolved, but if it's not voluntarily resolved, congress should act. let me turn quickly to sirius xm, which i believe you also refuse to pay recording artists for pre-1972 recordings, is that correct? >> there's no public performance right and under the law, there is no amount due to them. >> under federal law, but under state law, you're also in litigation, i believe, in california, trying to prevent compensation under california state law, correct? >> it's clear from litigation there's no public performance right in state law either. >> in that california state court proceeding, i believe you stated that granting a -- your company, granted a pre-1972 public performance right would produce a pure windfall to recording artists without any

commensurate benefit to the public. that was in your case, correct? >> under the way the policy is written, that statement is true. >> how would you suggest a windfall is defined as an unexpected, unearned or sudden gain or advantage in compensating artists for their creativity, even if it was recorded prior to 1972, it's not a windfall, it's the american way. i'll yield back. >> i thank the gentleman. the distinguished gentleman from rhode island is recognized. >> thank you, mr. chairman. and thank you to the witnesses. i'm proud to come from the state of rhode island, which was the birth place of the creator of the national endowment for the arts and humanities center, clayburn powell, who i think reminded us that the strength of our nation was not simply the power of our military or our economic resources but our ability to honor the creative artists and the culture of this

country and protecting the work of our artists is an important part of protecting our democracy. so i thank all the witnesses for this really important testimony. i want to really begin with you, mr. frear. you mentioned, you said i believe everyone should be paid. i assume you believe everyone should be paid because they created a product and they're entitled to be compensated for it, and that argument applies to creators before 1972 and after 1972. based on this notion that people are entitled to value for what they've created. >> i'm not a copyright lawyer. i'm just a history major. and it doesn't make a whole lot of sense to me that the dish ti distinctions made in the past between pree and post1972 -- let me finish, they granted the sound of performance recording rights, that they did not give it to pre-1972 artists and it

makes no sense that terrestrial radio gets a free walk. >> and you agree it should be compensated and in a fair amount driven by the market. >> i agree, it has to be a working competitive market. >> okay, and you spoke about the value that pandora provides to hundreds of millions of americans as a result of your service. but would you agree that there is some danger that if that product is provided without compensation, that the very product you sell could be in peril? >> i don't think i understand -- >> well, you rely on a product that you at least part of your inventory, you don't compensate the artist for. >> if you're referring to sound recordings before 1972. >> the example ms. cash used where someone rerecorded her

father's songs would be compensated, but someone who is playing the original, a recording, would not be required to compensate her. >> that strikes you as inconsistent, nonsensical, not good public policy, i take in. >> i am a copy right lawyer, and they make dish tinctions like this all the time. a musical work written by wc handy in 1920 is part of the public domain and isn't compensated, utbut if a modern day recording artist would record the song, they would receive a royalty. having said all that, pandora would be in favor of following the recommend algz, which is fully federalizing the pre-'72 recordings to allow them to benefit under fair use, allow recording artists to exercise their rights to terminate their transfers, so i understand the argument, sir, but if congress makes the decision to fully federalize pre-'72, we would be

happy to pay. >> does anything think that is a bad idea? does anyone think this distinction of '72 makes any sense? >> we agree that the distinction ought to be erased. there are complications in terms of how to do it. and we have expressed a perfect willingness to figure out with the copyright office and other stakeholders how to federalize pre-'72. meanwhile, this legislation which deals with legacy artists who need money now, there's no reason why action couldn't be taken on that immediately while we figure out the federalization. >> mr. christian, if i may ask you, you argue that this existing model ought to continue with free use of music and am/fm, and it strikes me, i'm new to this committee, but it's a curious argument that i can't think of in another context where the kind of creative results of musicianal artists

should whole scale be appropriated, used to build up a business, and generate revenues without any compensation. i'm wondering why you don't think the marketplace, you know, assuming there's some value to promotion, which i'll concede, that the artists would have an ability to understand what the value of that is and negotiate a price that made sense for you as the consumer of that music, and for the creator and artist who created it, why would the marketplace not provide the kind of context for a fair exchange of that? and why would we ever permit this practice to continue where that asset created, that creative product created is just used for the revenue generation of a private enterprise at the expense of the people who created the product? >> you're speaking of the pre-1972? >> yeah. >> that really isn't applicbible to the radio industry as we don't play performers, we do pay

for performers, composers and publishers rights. >> i'm talking about performers post-'72. >> after '72? we believe what we have right now, and that the promotional values applied to them, our product is free. for instance, we can't charge for our product. please understand that. we provide a free product to listener across the united states, hundreds of millions of people. and we do this in marketing, and it's also brought up in the advertising, but there's also promotion. >> i understand that. my question is, i recognize your argument that it has promotional value. but why is it not in the context of a free market, an exchange between the artist and you as the broadcaster, to say this has some value for promotion, so this is what i want to charge as an artist. this is the value it has to you because it helps to generate revenue for your country. why will not the results of that be a fair price where the artist is compensated and you make

money? >> the gentleman's time is expired. you'll be brief with your response. >> one response, i would be inclined to deal with your directly. >> thank you. i yield back. >> the gentlelady from texas. >> chairman, thank you so very much for this hearing. i'm excited to see so many of you i have worked with. i almost feel like calling the role. ms. cash, thank you for the music i enjoy of your dad and i'm sure of your entire family. good to see mr. sherman, mr. warfield, we have worked together before. mr. christian and mr. paul williams and i could be considered brothers and sisters we have worked together so much. thank you so much for what you do for children and teaching children about music. chris harrison, mr. huppe, i believe the name is, or did i add a perx-e on? >> that's perfect. >> thank you, and mr. frear. let me put on the record i hope this committee if it's

appropriate will have a hearing on the directv at&t merger for the fact the content is included in that as well. to the witnesses here, my delay was provoked by the fact that this is a year anniversary of the shelby case, united states supreme court case, that in my opinion dismantled the voting rights of the country and there's a hearing going on in the united states senate that is very important and i would almost say many of the artists your represent, performers benefits on their opportunities to vote because of the voting rights act, so i apologize for my delay in coming to the meeting, but this is no less an important hearing, one of the reasons why i dashed in here to be mere. we have gone through this before, and i think i have made clear that i think that we have an issue that should draw the interest of all and the recognition of the talent of the artists, but also to understand,

i have tried to take some time to understand the workings of radio and the expense that they incur, and so i'm prepared to be in this fight for a way forward. and i will pose my questions in that context. so i would ask both mr. warfield and the representative for pandora, first of all, does the xm deal sound attractive in its construct for the pre-1972 artists inthe pay structure, and i'll just say this in the early morning hours of coming here and listening to radio. i heard that diana ross, i think she's got some music pre-1972, was going to be at one of our venues here in this area. and apparently, they said something about national tour, and apparently, they felt confident it would be standing room only. these artists are attractive.

they're still bringing in crowds. we still love their music, as we will do in years to come for those who are now. so mr. warfield, if you would, i would appreciate it. >> we have not taken a position on the pre-1972.

before they have told us how they're going to use the music. you know, to prepare, you know, an appropriate bill. this is what your rate is going to be. we need information, people begin using our music before we have that information. so the consense decree has elements that could be changed for your support and our efforts at the doj are going be incredibly important. we need a faster and a cheaper rate setting process, to go to rate court costs millions and

millions of our members' money. and arbitration would be so much simpler, a huge part of that. to allow our members, right now, we're existing under an all in or all out rule that's been imposed upon us so the major publishers who want to go directly and license certain rights separate, and it's a right i believe they should have, are not allowed to have that. >> the gentlelady's time has expired. >> thank you for your indulgence and i'm ready for all of us to come together and craft a portion of what mr. williams said. i would appreciate it if i could hear some of the comments in writing back to the committee so we could work on it in the way mr. williams has laid out. >> i thank the gentleman and i yield back. >> i would like to thank the panelists those who have been here for three hours, by the way, the room must be cleared by 2:00 because of a scheduled hearing, but today's hearing has

been concluded. thanks to all for attending. without objection, all members will have five legislative days to submit additional written questions for the witnesses or additional materials for the record. the hearing stands adjourned. coming up on the next washington journal senator ron johnson of siskon inn on the u.s. strategy in iraq and other news. then the congressman of new york talks about his proposed vulnerable voice act. legislation to provide services

to unaccompanied minors crossing the border. live every morning on 7:00 eastern here on cspan. >> now you can keep in touch with current events from the nation's capitol using any phone any time on cspan radio to hear public affairs programs and the program. 5:00 p.m. eastern on washington today. you can also hear audio of the five sunday public affair programs beginning at sunday. call 202-626-8888. long distance or phone charges may apply. this week in the british house of commons, prime minister david cameron faced questioning about his decision to hire former news of the world editor and couldon.

on tuesday he was found guilty of a conspiracy to hack into cell phones and is awaiting sentencing. this is 35 minutes. >> order before i call mr. collins at the start of questions to the prime minister, i wish to inform the house how i will be applying the house's rules to any exchanges on mr. couldon's case. i asked the case for some forbearance as it is important for members outside the house that the position is clear. the house will known that mr. couldon has now been convicted of a charge of conspiracy to intersucept communications. the court has not yet sentences mr. couldon for offense. there hasn't been any verdict

with two charges against him on conspiracy to commit appliant to criminal cases which are active. they cease to be active when and i quote they are concluded about by verdict and sentence. so they apply in this case at the same time, the house's resolution gives the chair discretion in applying the rules. i have taken appropriate advice as the house would expect and indeed been in receipt of unsolicited advice for which i am, of course, grateful. in the light of all of the circumstances, i have decided, one, to allow reference to mr. couldon's conviction, two, not to allow reference to his sentencing by the court such as

speculation on the nature of that sentencence and three, not to allow reference to those charges on which the verdict is awaited. i rely upon honorable members to exercise strength, if that proves helpful to the house. >> questions to the prime minister? mr. damian couldon. >> thank you mr. speaker. this morning, i had meetings with colleagues and others. in addition to this house, i will have such further meetings today. >> speaker andy couldon's conviction shows that the parliamentary inquiry was consistently misled by him and others with phone hacking and others.

does the prime minister agree with me that the first concern what does he do to address the victims of phone hacking also uphold the democratic press. >> i think my honorable friend is absolutely right. the first thing is that we should remember the victims. we should ensure that that cannot happen again. as we do so, we must as he says cherish a free and vibrant price in our country. i take full responsibility for employing. i did sell the basis of assurances that i received. i also said that if those assurances turned out to be wrong, i with apologize to the house of commons and am doing so today. i am sorry. this was the right decision but i think it is right that we have a public inquiry and have public

investigation. yesterday, it showed that that one is above the law in this country. >> mr. speaker, today we know that for four years, the prime minister has hand picked closest advisor was a criminal and brought disgrace to downingstreet. we now also know that the prime minister willfully ignored multiple warnings about him. on the 8th of july, 2009, the guardian published evident of phone hacking on an industrial scale when couldon was editor of the news of the world. at that time couldon was his director of communications. what actions did he take. >> as i said a moment ago, the assurances that i received were the same that i received by the press complaints commission, by police investigations.

they were also thoroughly gone into by the levison inquiry, an inquiry i supported. specifically -- he talks about warnings -- specifically on the warning from the guardian. levison said this. the editor of the guardian did not raise the issue with mr. cameron at meetings both in the month after the article was published and the following year. he says this. he says this. honorable members want to hear. there can be no criticism of mr. cameron for not raising the issue. we had an exhaustive inquiry. i know he didn't like the result of the inquiry but he should accept it. >> mr. speaker, that is a lo long-winded way of saying when it come to couldon, he didn't want to know the evidence. first warning ignored. let's move onto may 2010. the deputy prime minister warned him in person about his deep

concerns about andy couldon. so he was warned by his deputy. what action did he take? every single one of those issues was dealt with by the levison inquiry. >> order, order. mr. lucas, calm yourself. i am trying to offer you on a weekly basis. thee thee . pe therapeutic guidance. the terms were agreed by the honorable gentlemen and they included, i quote, the extent to which there was a failure to act on previous warnings about media misconduct. that is what levison looked into. all the questions about the warnings i was given and the response that i gave and he made no chrriticism of my conduct.

i know the gentlemen were disappointed by the inquiry, he called for it. it took place and he should heed what it says. >> no, mr. speaker. this is about his character, his judgment, and the warnings he ignored including from the deputy prime minister. warning number two ignored. than in september, 2010. the new york times published a front page investigation detailing andy couldon's extensive knowledge of phone hacking, including one forrer editor who said i've been to dozens, if not hundreds of meetings when it came up. what action did he takitious all of these issues, sever warning was dealt with the levison inquiry which is what he called for and agreed to. levison made no criticism of my conduct in this regard whatsoever. now, you cannot call for a judge

led inquiry, participate in it and write the terms of reference of it and then ignore what it has to say. i have to say mr. speaker, all of the questions he is raising today are not new. they are the questions dealt with by the levison inquiry. the prime minister is offering an answer and it must be heard. order. it must be heard by the house. both sides must be heard by the house and that will happen as it always does, however long this session has to be run. let us be absolutely clear. the prime minister. >> i can quite understand why he doesn't want to listen to an eighth month long inquiry that last 5 million pounds that was led by a judge and interviewed people under oath. that is what he asked for. it was what was delivered and

did not cast zburdispersians on conduct at all. no answer why he didn't act on the guardian or the deputy prime minister. no answer why he didn't act on the new york times. now, let's come to the issue of vetting mr. speaker. amidst all of the warnings, the apologized i did -- i apologize, be quiet. if you can't be quiet, leave the chamber. we can perfectly manage without you. let's come to the vetting mr. speaker. >> amidst all of those warnings, the very least he should have done is insisting on coming to office. he should have the highest level

of security vetting. why didn't he insist it. >> levison looked directly into this issue, mr. speaker. this is what he found. this is what he found. levison concluded this. the level of security clearance was not the decision of either mr. camer cameron it was the de of the civil service. those are the correct -- those are the correct procedures. those are the correct procedures. but if the leader of the opposition's contention -- if the leader of the opposition's contention was that direct vetting could have gotten to the bottom of couldon's conduct at the news of the world then he should be clear about what levison found. he found this. the process of considering mr. couldon for dv status would not have involved a detailed

investigation, a phone hacking of the news at the world. that undermines the entire case that they had been trying to make all warning. i know you don't agree with it. i know he is so desperate not to talk about the economy or unemployment, not it atalk about the deficit but you can't rerun an inquiry that's already taken place. >> mr. speaker, so now it is clear from the prime minister -- now it is clear from the prime minister. i will tell him, it is failing for standing up and doing the right thing. that is what the prime minister has done. so now we know the rule of this prime minister is the buck doesn't stop here and he blames the civil service. now, on the civil service, can he -- order. >> sometimes one has to repeat a thing because people don't get it first time. if there is quiet, we will continue. if people try to shout other

people down against the principles of british tem democ they will be stopped in their tracks. >> cancan h he assure the house he raised concerns with any senior staff about hiring him. >> he was made it clear that and deed on the issue of vetting, he was absolute clear that the decision about vetting was absolutely clear what the right honorable gentleman is trying to do is go through all of the old questions that were answered by the levison inquiry. he didn't like the answer because he wanted to try and prove some cooked up conspiracy

between the conservatives and news international. he cannot manage to do so because the levison can't find it. now, he asked a minute ago what is week? i will tell you what is week, i attacking attacki attacking murdokc attacking the newspaper and then apologizing only a few hours later. >> mr. speaker, the prime minister said in his previous answer that sir gus oe donald was asked whether he raised concerns with him or his office about andy couldon. he was not asked that question at the levison inquiry. there is an important question about whether mr. gus donnald or senior servants raised concerns

about him? the truth is the charge against the prime minister is not one of ignorance, it's willful negligence. at the heart of this scandal are thousands of innocent victims of phone hacking he didn't stand up for. the prime minister will always be remembered as someone who brought a criminal into downings street. >> he brought up the issue from the guardian. i totally disproved him with the evidence. he brought up the idea of vetting, i totally disproved him with evidence. he cannot bare the fact that an eight month inquiry found that i behaved correctly throughout. that is the case. all of these issues were examined by the levison inquiry. if he wants to debate the calls we make and leadership we give,

i am happy any time. this is leadership that has gotten this economy moving. this is leadership that has gotten this deficit down an putting britain back to work. this is the absence from the labor party that shows that they have nothing to say about britain's economic future. >> jay berry. mr. berry, not here. mr. elfin cluid. >> thank you very much. after months of rhetoric, now a sudden change of heart. does the prime minister believe that the enemy is my friend

trumps all else? >> no, i don't believe that. i think we should judge every regime and every organization on its commitment to human rights, the rule of law and building pluralistic societies. we should engage with the iranians with a clear eye and hard heart. we shouldn't what happened to our ex-bassy. we shouldn't forget the things that they are responsible for around the world. we should start to build a dialogue with them in the way the foreign secretary set out. >> thank you mr. speaker. on friday, my honorable friend and myself jumped from a plane 13,000 feet over the country side. fortunately we had a parachute and training from the tiger army parachute display team. as we approach arm forces day,

will the prime minister pay tribute to our armed forces and the charities and generosity of the british people who do so much to support those who give so much commitment to queen and country? and will he reinforce the fact that this parliament will never underestimate the contribution of the armed forces of this country? >> i absolutely support what my honorable friend has says and i commend him for jumping out of an airplane with a parachute. it is right that we put the military covenant into the law of the land. armed forces say is now an important part. we remember those who have served and fallen and it is an opportunity to celebrate all who served today, to thank you them and their families. to celebrate the values they live by, et cetera. >> does the prime minister realize he's made history.

>> well obviously i regret the decision on the basis of the assurances that i was given. i will say that no one made any complaints about the conduct of andy couldon while he was at number ten. that does stand in quite a contrast to the conduct of mcbride, to joe moore and campbell. what we had from the previous government was smearing members of the parliament. >> mr. speaker, the fire fighters despite continues with some worrying consequences and no sign at present of a resolution. mr. speaker, back from easter, dclg ministers got them to kaft set of proposals that it was

ready to put to its members. will the prime minister look back at that proposal even now and consider whether it might have some useful part to play in bringing an end to some dispute? >> i'm very happy to look at what my honorable remember that's been working extremely hard on this issue. i think it is important to listen to what the fire fighters have to say but also the pensions that they have access to would also require the building of a half million pound pot for anyone else in the country. we should bare that in mind and the taxpayer's contribution at the same time. >> does the prime minister accept that his death at 60 proves that jay conlin lost more than 15 years in prison and that the anguish of his father's live in prison, as well as the

campaigning against injustice there were two particular issues that mattered to jerry. one is the need for properly quality, mental health services for those who surfed miscarriages of justice and secondly, not withstanding the egregious 75 year, jerry was recently promised access to the archives and that people could accompany him. it was his dying wish that that would be honored through the people he wanted to accommodate him. will the prime minister ensure that that is honored. >> first of all i'm grateful to the honorable gentleman in raising this. it is hard to think what 15 years in prison when you're innocent of being convicted from a crime who do to somebody. i think it is right that the previous prime minister

apologized when it came back. >> mr. peter bone. >> mr. speaker, unemployment in north ham p inshire is down by a third. last week the conservative government approved the russian lake development. 2,000 new jobs, major retail park, and a fantastic new facility. could the prime minister explain how we have this success. could it be down to his economic plan. >> i'm grateful to my honorable plan in detailing what is happening in terms of the extra jobs and development. i think what it does prove is that we have key developments that need to go ahead to unlock the growth and investment that we need this it country. >> the prime minister said yesterday that he was just

giving andy gocouldon a second chance. that means that the prime minister knew that there was a first offense and he knew from the very beginning that he was taking it criminal into downing street and then he refused to sack him and yesterday and again today he was busy praising him. isn't it the truth of the matter that the prime minister is only sorry because he got caught? >> i'm afraid that on this issue, the honorable gentleman has got it wrong time and time and time again. what i said about giving someone -- what i said about giving someone a second chance is because the individual question had resigned as the editor of the news of the world because what had happened. let me just refer to what he says in this house of commons. after eights of an inquiry that

got 5 million pounds. it turned out to be complete and absolute rubbish. have we ever heard of such a word? >> mr. speaker, might i congratulate my honorable friend on his judgment and resolution in standing up for britain's national interest over the question of the presidency of the eu commission. >> can i put it to him that he is in tune with the concerns of the public right across europe unlike so many of our continental partners. >> i think it is important to stand up for what you believe in. >> i believe the president should be chose ep on the heads of the state on the european counsel. that is the right approach and it is wrong to sign onto this.

i think it is important that the people understand that we need reform in europe. it doesn't matter how hard i have to push this case, i will take it all the way to the end. >> mr. speaker, they've been to breakfast with boris, had tea at number ten and are dancing with the business secretary but still businesses and shortage in the city cannot get superfast broad band. this is now a national embarrassment. what is the prime minister going to do? >> well, we have put a huge amount of money into expanding superfast broad band. we are now doing bitter than other european counted r countries. my hon yarable friend is working hard that they don't have broad band and make sure they have it active on their list, the prime minister recruited couldon in

2007. in 2009 someone came to the committee and said i have never seen a piece of paper linking him to the activity we're describing. in february of 2010 they concluded that we have seen no evident that andy couldon knew that phone hacking was taking place. would the prime minister now agree with me that those who now climb who he was in 2007 should explain why they didn't pass that information onto the police or the select committee. weren't they trying to deflect leadership from their own shortcomings? i think my honorable friend put it rather better than i did. thank you. mr. david simpson. >> thank you, mr. speaker. i'm sure the prime minister and the whole house will join with me and welcoming a very

successful visit by her majesty the queen. will the visit also join with me in condemning their foolish approach to well fair reform which is not protecting the vulnerable in northern ireland but is costing the northern ireland executive 5 million pounds per month in fines. >> well, i agree with the honorable gentleman on both sides. the queen's visit to northern ireland has been a huge success and has highlighted thing that's are taking place with more than 800 foreign investors. can i say i am extremely jealous of her majesty being able to stair at the iron throwns and meet the cast of game of thrones

which is hosted in northern ireland. he is also right about well fair reform. the point is to help people get back to work rather than just to cut budgets. we need to explain that we should be engaging in well fair reform to help get people back to work. >> thank you mr. speaker. on than side of the house we have a long term economic plan with education funding at its heart and both as a consequence which is seen in the enhanced 269 pounds that all students will get next april. does the prime minister agree with me that we need to continue that progress on ed indication funding. >> my honorable friend is absolutely right that the ed indication and better schools and skills are absolutely the heart of our long term economic plan. we're spending $8 million plan

specifically on the esh u of a fair nags funding formula we have made some progress by allocating 350 million pounds to the least funded authorities that will make a real difference in the coming year. >> thank you mr. speaker. on monday morning before boarding the 9:00 train to london. i joined the packet line from pcs to union to protest against closures of hmrc offices and protect the terms and conditions. their main concern was that they felt it was a government plan for privatization of hmrc. can the prime minister assure that there are no such plans under his watch? >> the plan we have for hmrc so make it more efficient and effective at cleskting taxes at people who should be paying

them. >> thank you mr. speaker. on sunday 17-year-old tragically drowned. his death was left his family, friends and local community in shock. as this week is drowning prevention week, what can the prime minister do to raise awareness of the dangers of open water and improve water safety during such a warm summer that we're having at the moment. his heart goes out to the family that he mentions. he is absolutely right. for anyone who lose a son in such a tragic way as this is absolutely heart breaking. i think we do need to spread the dangers swimming in open water. i think we need to do more to teach life saving skills. i also think the heroism we're bringing forward for people who want to do good and rescue people will help in a small way as well. >> mr. speaker, hundreds of young british men and some women

are now fighting in syria and now with isis in iraq. some of them will come back to the united kingdom, trained, radicalized and ready to attack. our program has been cut, will the prime minister undertake an urgent review of the programs review to make sure we have the plans and resources to protect our young people from the extremists? >> i have great respect because she's always spoken clearly about the need not just violent veem extremism. what whiff done is to make sure the government is properly foesked. we need to make sure we are search services to target those

returning from syria and iraq so that they are properly dealt with. they have made a large number of arrests and confiscated passports and taken all the actions necessary to keep our country safe. >> annette brooke. >> thank you mr. speaker. julius house, a wonderful children's hospice is currently out research with a university into the impact of short rates on family relationships. will the prime minister give higher priority to the funding of short breaks as an investor measure u i absolute lly agree with that measure. i will never forget in the first children's hospice in the country that it is a complete life safer for families and carries out brilliant work that's why we've committed over $800 billion and i'm sure this research will help inform our work in the future.

>> mr. speaker sutcliff. >> i wonder if the prime minister is aware of the alleged misselling of cash back warrants. i wonder that one of the uk's largest utilities companies have refused to pay back to certain areas, many of whom are the poorest in our society, i command him for raising this issue. this took place over a decade ago. this was looked at in the department of trade and industry. for the outcome of the liquidation, i encourage him to give the business department all the information that has come to light and i will fix a meeting to we can get to the bottom of this issue. >> my constituent michael butcher installed cctv in his

mother's flat because she was a dementia sufferer. he recorded a brutal assault on her by her kayer. unbelievable to me, the cps has refused to prosecute her because they say it is not in the public interest. with my right honorable friend saying as a society we should be totally intolerant on vulnerable people with dementia. on the general point about is it right that we're intolerant of breaches of care against elderly care, particularly those with dementia, yes we should be intolerant to that. our strategy is not about just increasing the chees but making sure our communities become more dementia friendly. >> mr. speaker, did guz