meetings today. >> andy coulson's conviction shows 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 should be to see redress of the victims of phone hacking and to uphold the democratic process of free press. >> i think my honorable friend is absolutely right. the first thing is that we should remember the victims. people who had their privacy wrecked and we should ensure that cannot happen again. as we do so, we must as he says cherish a free and vibrant press in our country. i said yesterday and i say again today, i take full responsibility for employing andy coulson. i did say that i received but also the select committee received. but i always said if those assurances turned out to be wrong, i would apologize fully and frankly to this house of commons and i do so again today.

i am sorry. this was the wrong decision. but i think it's right that we've had a public inquiry in this country that is right that we have proper investigations. yesterday, once again showed that no one is above the law in our country. >> miliband? >> mr. speaker, today we know that for four years, the prime minister's hand-picked closest adviser was a criminal and brought disgrace to downing street. we anyhow also know that the prime minister willfully ignored multiple warnings about him. on the 8th of july 2009, the guardian published evidence of phone hacking on an industrial scale when coulson was editor of the news of the world. at that time coulson was his director of communications.

what action did he take? >> as i said a moment ago, the assurances i sought and received were the same assurances received by the press complaints commission, by select committee of this house and by police investigations. they were also thoroughly gone into by the leff levison inquir. specifically, he talks about warnings. specifically on the warning from the guardian, levison had to say 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. and he says this. he says this. and honorable members ought to hear. there can be no criticism of mr. cameron for not raising the issue. we had an exhaustive inquiry. i know we didn't like the result of the inquiry, but he should accept it. >> ed miliband. >> mr. speaker, that's a

long-winded way of saying when it came to andy coulson, he just didn't want to know the evidence. first warning ignored. let's move on to may 2010. the deputy prime minister warned him in person about his deep concerns about andy coulson. 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 therapeutic guidance. but there's a long way to go. there needs to be calm on both sides of the aisle. mr. prime minister? >> every single one of these issues was dealt with exhaustively by the levison inquiry. the terms of reference of the inquiry were agreed by the right honorable gentleman 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. he looked into all of these questions about the warningings i was given and the response i gave, and he made no criticism of my conduct. i know the gentlemen was disappointed by the inquiry, he called for it, it took place and he should heed what it says. >> ed miliband. >> 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. then in september 2010, "the new york times" published a front page investigation detailing andy coulson's extensive knowledge of phone hacking, including one former editor who said i've been to dozens if not hundreds of meetings with andy where the subject came up. what action did he take?

>> all of these issues, every single warning was dealt with by the levison inquiry, which he called for and agreed to. i know he can't bear it, but 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 in a judge led inquiry 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. i know. >> 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. about that, 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 cost 5 34i8 million pounds that interviewed people under oath, interviewed by a judge. that is what he asked for. it was what was delivered and it did not criticize my conduct in this at all. instead of casting dispersions about this, he should accept the inquiry that he supported. >> ed miliband in. >> no answer -- no answer on any of the questions. no answer why he didn't act on the guardian. no answer why he didn't act on the deputy prime minister. no answer why he didn't act on "the new york times." let's come to the issue of vetting, mr. speaker. amidst all of those warnings, the very least -- >> i apologize for interrupting. there is the usual ranting from the usual suspects. be quiet or if you can't be quiet, you don't have self-restraint, leave the chamber. we can perfectly manage without you. mr. ed miliband.

>> amidst all of those warnings, the very least he should have done is insisted immediately on coming to office that andy coulson should have the highest level of security vetting as his six predecessors over the past 14 years have had. why didn't he insist on that. >> levison in his inquiry looked directly into this issue. and this -- mr. speaker, this is what he found. and this is what he found. levison concluded this. the level of security clearance was not the decision of either mr. cameron or mr. coulson. it was the decision of the civil service. and those are -- and those are the correct -- and those are the correct procedures. and those are the correct procedures. but if the leader of the opposition's contention -- if the leader of the opposition's contention is that direct vetting could have gotten to the bottom of coulson's conduct at

the news of the world then he should be very clear about what levison found. he found this. he found this. the process of considering mr. coulson for dv status would not have involved a detailed investigation of phone hacking at the news at the world. that undermines the entire case that they had been trying to make all morning. i know you don't agree with it. i know he is so desperate not to talk about the economy or about unemployment, not to talk about the deficit, but you can't rerun an inquiry that's already taken place. >> ed miliband? >> so mr. speaker, 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 assure -- >> 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 democracy, they will be stopped in their tracks. it's very simple, and i would have thought pretty clear. ed miliband. >> on the civil service, can he assure the house that at no time did sir gus o'donnell, the then cabinet secretary or any civil servant raise concerns with him or his office about hiring andy coulson. >> gus o'donnell has made that very clear in the evidence he gave to the inquiry. and indeed on the issue of vetting, on the issue of vetting, he was absolutely clear that the decision about vetting is for the permanent secretary at number 10, sir hayward, sbhon has served with impeccable

service as well as coalition governments led by conservative prime minister. 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 was trying to prove some cooked up conspiracy between the conservatives and news international. he cannot manage to do it because the levison inquiry can't find it. now, he asked a minute ago what is weak. i will tell you what is weak. attacking murdoch attacking the newspaper and then apologizing only a few hours later. >> mr. speaker, the prime minister said in his previous answer that sir gus o'donnell was asked whether he raised concerns with him or his office about andy coulson. he was not asked that question

at the leveson inquiry. there is now a very important question which the whole country will want an answer to about whether sir gus o'donnell or senior civil servants raised concerns with him or his office about andy coulson. and the truth about this is the charge against the prime minister is not one of ignorance. it is 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 being the first ever occupant of his office who brought a criminal into the heart of downing street. >> he brought up the issue of the warning from the guardian. i totally disproved him using the evidence. he brought up the idea of direct vetting. i have totally disproved him by using the evidence. he cannot bear the fact that in eight-month inquiry that he hoped was going to pin the blame

on me found that i have behaved correctly throughout. that is the case. all of these issues were exampled by the leveson inquiry. but if he wants to debate the calls we make and the leadership we give, i am happy to any time. because it is leadership that has gotten this economy moving. it is leadership that has got our deficit down. it is leadership that is putting britain back to work, and it is the total absence of leadership from the party that shows they have nothing to say about britain's economic future. >> jay berry. mr. berry, not here. mr. elvin cluid.

>> thank you very much. after many months of vehement anti-iranian rhetoric from the government, and now the sudden change of heart, does the prime minister believe that the maxim, my nemenemy's enemy is my frien trumps anything 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 forget what happened to our embassy. 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. >> nigel evans. >> thank you mr. speaker. on friday, my honorable friend baselton and myself jumped from a plane 13,000 feet over the countryside.

fortunately, we had a parachute and training from the tiger army parachute display team. as we approach armed forces day, will the prime minister pay tribute to our armed forces and those charities and the 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 said and i commend him for jumping out of an airplane with a parachute. not only should we commend our armed forces but it's right we put the armed forces covenant, a military covenant into the law of the land. i think that armed forces day is now an important part of our national calendar. on remembrance sunday we remember those who have served and those who have fallen, but

on armed forces day it's an opportunity to celebrate all those who serve today to thank them. to thank their families. to celebrate the values they live by and all that they bring to our country. >> ronnie campbell. >> does the prime minister realize he's made history by employing a crook at number 10? >> i've given a very full answer to this. obviously, i regret the decision to employ andy coulson on the basis of the assurances that i was given. but what i would say is that no one made any complaints about the conduct of andy coulson while he was at number 10. and that does stand in quite a contrast to the conduct of damian mcbride, to the conduct of joe moore, to the conduct of alistair campbell. what we had from the previous government was dodgy dossiers, varying bad news and smearing members of parliament. >> sir nick harvey. >> mr. speaker, the firefighters

dispute continues with some worry n consequences and so sign of a present resolution. mr. speaker, back before easter, they got them to cast a set of proposals at the fire brigades union that they were ready to put to the members. will the prime minister look back at that proposal even now and consider whether it may still have some useful part to play in bringing an end to this dispute? >> i'm very happy to look at what my right honorable friend suggests. i know they've been working extremely hard on this issue. i think it's important that we listen to what the firefighters say but also at the same time, recognize the pensions they have access to would actually require the building of a half million-pound pot for anyone nels our country. we should bear that in mind and the taxpayers' contribution at the same time. >> art durkin?

>> does the prime minister accept that his death at 60 proves that jay conlin lost more than 15 terrible years in prison and the anguish of his father's torment due to the injustice from layers of this state? as well as his wider campaigning against injustice, there were two particular issues that mattered to jerry in recent years. one is the need for proper quality mental health services for those who suffered miscarriages of justice. and secondly, which in particular i'd like the prime minister to address. not withstanding the egregious 75 years that's been put on the guilt, jerry was recently promised access to the archives and that people could accompany him. it was his -- that that would be honored through the people he wanted to accompany him. will the prime minister see that the dying wish will be 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 a crime you're convicted for would do to somebody. it is absolutely right the previous prime minister apologized as fullsomely as he did when this came to pass. i am very happy to look at the specific request about the records which hasn't been put to me before and contact the honorable gentleman about that issue. >> mr. peter bone. >> mr. speaker, unemployment in north hampenshire is down by a third. last week the conservative led government approved the russian lakes development. 2,000 new jobs, major retail park, and a fantastic facility. could the prime minister explain how we have this success. could it be due to his economic plan? >> i'm grateful to my honorable friend for detailing what's

happening in north hampenshire. i think it proves we have an entrepreneurial economy, particularly in north hamptonshire but we need key developments to come to unlock the jobs, growth and investment we need for our country. >> mr. bryant. >> the prime minister said yesterday that he was just giving andy coulson 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 a criminal into downing street. and then he refused to sack him and yesterday and again today he was busy praising him. what message does that send to the victims? isn't 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

in question had resigned as the editor of the news of the world because what had happened. but let me just refer him to what he said in this house of commons. he said there's no doubt that there was a deal secured between the conservative party and news international before the general election. that is what he said after eight months of an inquiry that cost 5 million pounds. that was found to be complete and utter rubbish. yet have we ever heard one word of retraction from the honorable gentleman? as ever, not a word. >> sir general howard. >> may i congratulate my right 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 and speak for what you

believe in. i believe the european commission president should be chosen by the elected heads of government and heads of state on the european council. that is the right approach and it is wrong to sign up to this power grab by the parties of europe and the european parliament. i also think it's important the people involved understand we need reform in europe and 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 broadband. we are now doing better than other european countries in terms of the rulout and the speeds that are available.

my honorable friend is working hard to deal with those areas of the country that don't yet have superfast broadband and i'll make sure they have it active on their list. >> the prime minister recruited coulson in 2007. >> in 2009 they came to the select committee and said i've never seen a piece of paper that directly linked coulson to the defendant we are discussing. in february 2010 the select committee on which i serve concluded with all party support, we have seen no evidence that andy coulson knew that phone hacking was taking place will the prime minister agree that those who now claim they knew he was in 2007, which seems to include the leader of the opposition, should explain why they didn't pass that information on to the police or to the select committee. however they tried to rewrite history to deflect attention from their own chronic leadership shortfalls.

>> 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 in welcoming a very successful visit by her majesty the queen. will the prime minister also join with me in condemning the foolish approach to welfare reform which is not protecting the vulnerable in northern ireland. it is costing the northern ireland executive 5 million pounds per month in fines. >> well, i agree with the honorable gentleman on both counts. first, the queen's visit to northern ireland has been a huge success. and i think has highlighted the economic renaissance that's taking place with over 800 foreign investors.

northern ireland is now one of the top uk destinations for investment. and i'm extremely jealous of her majesty being able to stay on the iron throne to meet the cast of "games of thrones" which is one of the most successful television productions anywhere in the world, hosted in northern ireland. but he's also right about welfare reform. the point of welfare reform is to help people get back to work, rather than just cut budgets. we should be engaging in welfare 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 per pupil funding that all students will get next april. does the prime minister agree with me that we need to continue that progress on education funding. so we get better funding for all

the schools in this country? >> my honorable friend is absolutely right that education and better schools and skills are absolutely the heart of our long-term economic plan. he should note that we're spending $8 million on buildings, but specifically on the issue of a fair national funding form la, we have made some progress as he says by allocating 350 million pounds to the least funded local authorities and that will make a real difference in the coming year. >> jim mcgovern? >> thank you mr. speaker. on monday morning before boarding the 9:00 train to london. i joined the picket 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

those members that there are no such plans under his watch? >> the plan we have for hmrc is to make it more efficient and effective at collecting taxes at people who should be paying them. that's the plan. >> mr. stevenson. >> thank you mr. speaker. on sunday 17-year-old goodship 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 particularly during such a warm summer that we're having at the moment? >> my heart goes out to his -- to the family that he mentioned. he is absolutely right. for anyone to lose a son in such a tragic way as this is absolutely heart breaking. i think we do need to spread

better information about the dangers of swimming in open water. i think we need to do more to teach swimming in schools and 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. >> hazel blairs. >> 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 prevent program has been cut by 17 million pounds, and the funding for local authorities to do the essential long-term community work has all but disappeared. will the prime minister undertake an urgent review of the prevent strategy to make sure that we have the plans and the resources to protect our young people from the extremists? >> i have great respect because she's always spoken clearly about the need to confront not just violent extremism but all forms of extremism. what we've done in this government is to make sure the

prevent program is properly focused and works in a way you're targeting those most at risk of being radicalized. as well as doing that we have to shift resources in our intelligence security and policing services to target those who are potentially running from syria oh, iraq so they are properly covered and dealt with. we've made a large number of arrests. we've confiscated passports. we've taken all the action necessary to keep our country safe. >> annette brooke. >> thank you mr. speaker. julius house, a wonderful children's hospice is currently carrying 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 save measure? >> i absolutely agree with my honorable friend about this issue. anyone bringing up a severely disabled child knows when you find one of these hospices. i'll never forget finding helen

house in oxford. the first children's hospice, i think, anywhere in the country. it's a complete life saver 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. jerry sutcliffe. >> i wonder if the prime minister is aware of alleged selling of cash back warrants. i wonder that one of the uk's largest utilities companies have allegedly refused to pay back to certain areas, many of whom are the poorest in our society. >> i commend the honorable gentleman for raising this issue. this took place over a decade ago and was looked at the the time by the then department of trade and industry. but in light of the concerns that exist from members of the public about the outcome of the liquidation, i would like to encourage the honorable

gentleman to give the department all the new information that has come to light and i'll fix a meeting for him with the business secretary and members of the old party group so we can get to the bottom of this issue. >> mr. richard bannion. >> my constituent michael butcher installed cctv in his mother's flat because she was a dementia sufferer. and he recorded on this a brutal assault on her by her career. unbelievably to me, the cps has refused to prosecute it because they say it is not in the public interest. would my right honorable friend agree that as a society, we should be totally intolerant of all attacks on vulnerable people with dementia? >> on this specific case, of course, it wouldn't be right for me to comment on a cps decision but on the general point, is it right that we're intol rent of breaches of care against elderly people, particularly those with dementia who are reliant on others, yes, we should be

intolerant of that. we should make sure our care homes and hospitals and the communities become more dementia friendly. >> yasmin? >> mr. speaker, all senior civil service raised directly with the prime minister any concern they may have had? >> a number of senior civil servants gave evidence to the leveson inquiry and were closely questioned by leveson. the whole process of the arrival of andy coulson's arrival at downing street, the warnings that were given, each and every single one were dealt with by the investigation. that the right honorable gentleman supported from the position of leader opposition. but he cannot bear the fact an independent judge-led inquiry came to that conclusion. he's the first leader of the opposition not able to ask for an independent judicial inquiry because he's already had one.

>> thank you, mr. speaker. although the world cup football results may not be quite what we wanted in england, we've got the rugby to look forward to. my right honorable friend knows there will be four foreign teams playing at kings home in my constituency of gloucester. would you agree this is a great opportunity to use the new brownfield site fund plus perhaps a new cities deal from dclg to make sure that the regeneration of our small cities is ready for the world cup 2015? >> my honorable friend is right. after the disappointment of the football and the disappointment of that stunning test match where we lost on the second last ball, i think it is time perhaps to look to rugby to provide us with something to lift our spirits. >> last, but not least, caroline lucas. >> thank you very much, mr. speaker. in my constituency, fully one-third of homes are in the private rented sector where

tenants are often ripped off, forced to move at a month's notice and the average rent for a two-bedroom home is 1200 pounds a month. will the prime minister back my call for a living rent commission to explore ways of bringing rents back into line with the basic cost of living? >> there's a debate shortly on the private rented sector and how we get more houses and more competitive rents. of course, we want to see more competitive rents. when i look at the policies of her policy it looks like you never build any houses anywhere for anyone and as a result, rents would go up. >> order. the ecigarette industry has caught the attention of congress and federal regulators. on monday, c-span will airportions from two recent senate hear,s where democratic lawmakers accuse the industry of intentionally marketing their products to kids. and republicans said regulators should be mindful of the e-cigarettes potential as a smoking cessation tool. here's a brief look.

>> i think this whole thing is nothing more than it's all about the money. it's uncreative. i think it's nasty. it's like pornography, in my mind. what's to pick between the one and the other? in fact, maybe what you are doing is much more dangerous. i am ashamed of you. i don't know how you go to sleep at night. i don't know what gets you to work in the morning except the color green, the dollars. i've never said anything like that before, but i've never in my 30 years on this committee have i ever heard testimony such as given by you and by you sir. what i want to do is send you to

the middle east because you say we can just get good people together and settle everything. you should go to the middle east and settle that and then come back to us more realistically. but for you two, you're what's wrong with this country. and the profit motive is good. but only if it's aimed at something which is for the general benefit of the public, and that could be stretched a little bit because the public likes to be entertained. i can't say professional basketball is necessary for the existence of democracy in america, but people like it, so, let's go ahead. but i think in your case, you don't have that leeway. it's simply a matter of the dollars. the money that you rake in. the 256% increase in two years in advertising. and then you say it's only for the adults, not for the children.

when everything else that's come out of this era says otherwise. i think it's dreadful. >> join us monday at 7:00 p.m. eastern for more about e-cigarettes. we'll explore proposed fda regulations. we'll also take your phone calls and comments on facebook and twitter. again, that's monday at 7:00 p.m. eastern on our companion network, c-span. what i have right here is a partially processed plant that i've cut down into sections that are the right length for hanging. and then i take off all the big fan leaves and those are sent to the kitchens to make edibles. they have a small amount of thc so they get that for a really good price from us. then these little leaves are the tight trim and that can be dried and made into joints or be sent to the places that make extractions and made into hash and that sort of thing. and then right here, we have a

finished bud and this is sent over to cure and hang to dry and then cured in buckets for a couple of weeks before they sell is in a dispensary. >> "washington journal" looks at the recreation use and legal sale of marijuana in colorado with guests from denver and your phone calls live friday morning, 7:00 to 10:00 eastern on c-span. with live coverage of the u.s. house on c-span and the senate on c-span 2, here on c-span3 we complement that coverage by showing you the most relevant congressional hearings and public affairs events. on weekends c-span3 is the home to american history tv with programs that tell our nation's story, including six eyuk stori unique stories. american artifacts, touring museums and historic sites to discover what artifacts reveal about america's past. history bookshelf with the best known american history writers. the presidency, looking at the policies and legacies of our nation's commanders in chief. lectures in history.

top college professors delving into america's past. and our new series "real america" featuring arkifl government and mims from the 1930s to '70s. c-span3. watch us in hd, like us on facebook and follow us on twitter. a house judiciary subcommittee continued its look at music licensing laws on tuesday. with a focus on copyright of performed music. singer roseanne cash, the daughter of johnny cash, testified along with the ascap president paul williams. members also heard from pandora radio and the national association of broadcast eers. this is just under three hours.

>> ladies and gentlemen, the subcommittee of intellectual property of internet will come to order. the chair is authorized to declare recess at any time. we welcome all our witnesses today. let me get my chair adjusted here. thank you. good morning and welcome to the second of two hearings on music licensing issues. two weeks ago this subcommittee heard from your fellow music industry representatives about their concerns with the state of music licensing copyright laws. look around the room and i think we can conclude that you all have more than a passing casual interest in this issue and we welcome all of you here today. at the earlier meeting i mentioned my fondness for old

time blue grass and country. i don't know that has bolstered the popularity across the country. probably hadn't but i'll continue to try to do that. i'll make my opening statement very brief because we have a long day ahead of us. although the witnesses on this panel may not agree on everything, i believe they all agree that music enriches the world in which we live. since this is part two of the music licensing hearings i won't repeat all of the outstanding music issues that congress needs to address. i simply hope that the effort to improve the music licensing system, we don't lose sight of the fact that creators need to be paid for their work just like everyone else in this room. although our creative industries are the envy of the world, i'm not sure that our music licensing system is. it may well be time for a change. and that will be exposed perhaps today as we go through this

maybe arduous journey. i yield back the balance of my time. i acknowledge the gentleman from new york for his opening statement. >> thank you, mr. chairman. thank you for holding this second hearing on music licensing under title 17. at the first hearing two weeks ago, he worried from a diverse panel of songwrite irs, publishers, digital licensees. although there are varying points of view about the specific problems most in need of legislative solution it was widespread agreement that the system is in need of comprehensive reform. as i stated at the first hearing, the current music licensing system is rife with inconsistent rules. and inequities that make no rational sense. if we started from scratch, nobody would write the law the way it stands today. ter restrial satellite and internet radio compete against each other under different rules for compensating songwriters and others, assuming they are even paid at all for their works.

several of the service providers who play an important role in the music system are with us today. local broadcasters provide critical programming. including news, weather and emergency alerts and often form strong public service partnerships with the communities they serve. we also have representatives of digital radio such as sirius xm and pandora who are making music available to consumers in new and innovative ways. i look forward to productive discussion about how to come together to improve the music licensing system. as i noted at the first hearing our current scheme is so haphazard because in large part pieces were developed at different times in response to different innovations in the music and technology industries. rather than continuing to adjust the system in a piecemeal fashion, i believe we must take a comprehensive approach. i'm not alone in my belief that a comprehensive approach is needed. at this year's grammys on the hill event, the ceo called for

the industry to coalesce behind a single bill. it was later echoed by house majority leader mccarthy and nancy pelosi who agreed the time has come for congress to address these issues in one package. that's why i pledged our first hearing of music licensing to develop a comprehensive omnibus bill which some people have dubbed the music bill. the law should be platform neutral and old music created should receive fair market based compensation for their work. there's a growing consensus the system is in need of reform. in addition to this committee's ongoing copyright review, the copy right office is conducting a music licensing study. just this week it concluded a series of roundtables held around the country in nashville, los angeles and new york. the commerce department issued a green paper and updating copyright including licensing for the digital age. the department of justice is

conducting a much-needed review. two of the performance rights organizations responsible for collecting and distributing royalties. i hope the doj review will be completed quickly as time is of the essence for all the parties involved. today's hearing is another important step in this larger effort to review and update the music licensing system. i'm interested in hearing from today's witnesses about the specific issues they believe should be addressed and about how we can best enact meaningful reform. i have no doubt that today's discussion will be just as informative and useful as a discussion in our first hearing. i thank you and yield back the balance of my time. >> i thank the gentleman. chair recognizes the distinguished gentleman from virginia. >> thank you, mr. chairman. thank you for holding this hearing and thank you for your diligence in the number of hearings and impressive array of hearings we've held on copyright issues. and i can see we have another full house, so good morning to

you all and welcome to the subcommittee's second music licensing hearing. i see the size of the witness panel has grown with interest in this issue. two weeks ago a number of problems in the music licensing system that currently exists were highlighted. in reviewing the written testimony submitted in advance of this hearing, there does seem to be agreement that a more robust copyright ownership database is needed. there seems to be an interest by many in simplifying the diverse licensing and rate making systems. however, disagreement remains on whether all those who use music should pay for it and what specific rate standard should be used among other issues. as i mentioned two weeks ago as we consider challenges and potential solutions to the copyright laws relating to music, we should keep in mind ideas that incorporate more free market principles. we should also be mindful of the tremendous role that digital music delivery services play in the music ecosystem for consumers and creators alike.

i have long said that the content community and the technology community need each other. it is my hope that we can identify improvements to our copyright laws that can benefit both groups as well as consumers by maintaining strong protections for copyrighted works and strong incentives for further innovation. thank you, and appreciate you all making time to be here this morning. i yield back, mr. chairman. >> i thank the gentleman. the distinguished gentleman from michigan, the ranking member, is recognized for his opening statement. >> thank you, chairman coble and welcome to our distinguished panel. i see faces that i've worked with before. and we welcome all the supporters of this subject matter that are here in the judiciary hearing room this morning. since i agree with everything

that's been said by my predecessors, the gentleman from new york and the chairman himself, i'm just going to put my statement in the record. it would be largely repetitive. many of you know where i stand. i've supported music as an important and vital source in our national interest, and it's in that spirit that i welcome you all to the judiciary committee this morning. i ask unanimous consent to put my statement in the record and yield back the balance of my time. >> i thank the gentleman. and the statement from other members will be made a part of the record without objection. let me introduce our panel of witnesses as we proceed with the business at hand. our first witness this morning is miss roseanne cash. singer, songwriter, author and performer. i can hardly see you because of

the impediment here miss cash. she earned a nomination for 12 more, including 11 number one singles. she completed her residency at the library of congress in december of 2013 and was given the lifetime achievement award for sound recording in 2012. miss cash is testifying today on behalf of the american music association, and miss cash, your late dad also appeared before this subcommittee, and we enjoyed having him here. good to have you here. our second witness, i can't see you either because of the impediment but i'll hold you harmless for that. mr. kery sherman is chairman and chief executive officer of the recording industry of

america. in his position mr. sherman represents the interests of the 7 billion u.s. recording industry. our third witness is mr. charles warfield senior adviser of wmf media. he's a 31-year veteran of the broadcasting industry and is here on behalf of national association of broadcasters. he received his b.s. in accounting from hampton university. good to have you with us, mr. warfield. our fourth witness is mr. darius van armon. he is testifying today on behalf of the american association of independent music also known as a21m. he attended the university of virginia. our fifth witness is mr. ed christian, chairman of the radio music licensing committee. rmlc. he teaches courses in media management, broadcast programming, and radio operations at central university

of michigan -- central michigan university. he received his b.a. in mass communications from wayne state university and his m.a. in management from central michigan university. our sixth witness is mr. paul williams, president and chairman of the board of american society of composers, authors and publishers, ascam has represented hundreds of thousands of music creators worldwide. mr. williams is an oscar, grammy and golden globe winning hall of fame singer and songwriter and mr. williams you'll be glad to know that your friend from texas admonished me to be easy on you today so with him looking down from his seat we'll be careful to adhere to that request. our seventh witness, mr. chris harrison, vice president of business affairs and assistant general counsel of pandora media. he's also an adjunct professor teaching music law at the university of texas school of

law. mr. harrison received his jd from the university of north carolina. i'm pleased to say, and his phd in political science, also from the university of north carolina, chapel hill. mr. harrison, good to have a fellow tar heel in the room today. our eighth witness is mr. michael huppe, president and chief executive officer of sound exchange. in his position he is responsible for establishing long-term strategic plan and vision for the organization. he received his b.a. from the university of virginia and his jd from the harvard school of law. our ninth and final witness is in david frear chief financial officers at sirius xm. in his position he's responsible for overseeing finance, i.t. and satellite development operations. he received his mba from the university of michigan at ann arbor. gentlemen, before we begin hearing from the witnesses, i would like for each of you to stand, if you will, we will swear you in.

do you hereby testify that the testimony you say will be the truth, nothing but the truth, so help you god? let the record show that all responded in the affirmative. we will start with miss cash. folks, i'll remind you, if you can, try to comply with the five-minute rule. when the timing light on your table goes from green to amber, that's your warning that you have a minute to go to reach the five-minute pinnacle. you will not be severely punished if you don't comply with that, but if you could stay with that. we try to comply with the five-minute rule as well. the good news is i don't think there's going to be a vote until afternoon so we won't be interrupted by floor votes. miss cash, you're recognized for my minutes.

>> thank you. chairman, ranking members, members of the subcommittee, thank you for the opportunity to testify on behalf of the americana music association. i want to address a few obstacles to making a living as a songwriter and recording artist today. everything i say is guided by one principle, all creative people are entitled to fair market compensation when their work is used by others, regardless of the platform. i have been both a professional musician and songwriter for 35 years. i grew up in the music industry. in the age of major record labels and brick-and-mortar record stores. i've been signed a major label since 1978 and am currently on the esteemed blue note label. the climate among musicians at the moment is disspirited. we feel marginalized and devalued, although our passion

for our work remains unchanged. every artist i know says regarding their work, that they have no choice, we don't create out of whimsy, narcissim or lack of ambition for more financially dependable professions. we are fueled by an artistic sensibility that can be ruthless in its demand for discipline, and in some ways we are in a service industry. we are here to help people feel, to inspire, to reveal the secrets of the heart, to entertain and provide sustenance for the soul. creating music is a collaborative effort. in the creation of recorded music co-writers, producers, fellow musicians, recording engineers, background singers and various support people come together with the single purpose to create one work. i am a fan of new technology.

and i'm excited about the potential i see and the new ways of distributing music that are being offered to music lovers. my enthusiasm is tempered, however, by the realization that these new services are all cast against the backdrop of crushing digital piracy. and licensed under outdated and byzantine laws which stand in the way of creators being paid fairly for their work. among the problems facing us are, one, the lack of a public performance right for terrestrial play for recording artists. the united states is one of a few countries, including china, north korea and iran that lack a radio performance right for artists. the failure to recognize this right means that performers cannot collect royalties for

their work, even when it is broadcast in countries where the right exists. because the treaties the u.s. has signed are reciprocal. two, issues concerning how rates are set for licenses that songwriters offer for their work. currently the law prevents courts from considering all the evidence that might be useful in setting the fairest rate for licenses the performing rights organizations offer, and royalty rates are not set on a fair market basis. this makes no sense. the songwriter equity act introduced by congressman collins and jeffries would address these issues, and i thank them for that. three, the lack of federal copyright protection for pre-'72 sound recordings. there is a gap in copyright protection for sound recordings created before 1972, which digital services use as an excuse to refuse to pay legacy artists.

i thank ranking member conyers and congressman holding for introducing the respect act to treat the work of legacy musicians fairly. for example, if my father were alive today, he would receive no payment for digital performances of his song "i walk the line" written and recorded in 1956. but anyone who re-recorded that song today would receive a royalty. the injustice defies description. these are a few of the many challenges we face as performers and songwriters, and i understand ranking member nadler is considering legislation to comprehensively address these and additional concerning. thank you, congressman nadler. bottom line, copyright law should not discriminate among individual music creators.

each should be fairly compensated for their role in the creation and delivery of music to audiences. i see young musicians give up their dreams every single day. because they cannot make a living doing the thing they most love, the thing they just might be on the planet to do. they deserve our encouragement and respect. musicians and artists of all kinds should be valued members of american society, compensated fairly for honest hard work. i believe we can find solutions so that artists and musicians can succeed together with both new and existing music services, and i thank you for this time. >> thank you, miss cash. mr. sherman. let's start with you. recognize you for your statement. >> chairman goodlatte and coble and ranking members conyers and nadler and members of the subcommittee, my name is cary sherman. i serve as the chairman of the

music association of america remembering some names as columbia, motown, capital, atlantic, to name a few. our members have worked hard over the past two decades to balled viable, diverse and consumer friendly digital music marketplace. millions of music lovers can find whatever they want whenever they want it. digital models already account for two-thirds of our revenue, and that number is growing. but before the music marketplace can realize its full potential, there remains serious systemic issues to address. records are the economic engine that drives the entire music industry. it's the recording, invested in, marketed and promoted by record labels that produces the reason revenue for the artist, the digital music services. record labels invest not just their financial capital but human capital, years of experience and expertise from the likes of clive davis, jimmy ivy, mo austin who work with artists to bring out their very best, resulting in music that

not only captivates fans but also drives revenues for the ben fitted of everyone in the music value chain. yesterday we released a report on the investments in music made by major record companies. in embracing digital distribution, record labels have revolutionized the business and streamlined their operations, all while revenues have plummeted. even in tough times, however, has a percentage of u.s. net sales revenue over the last decade, major label payments for artist royalties have increased by 36% and mechanical royalties for songwriting have increased by 44%. impediments to licensing impact the ability of record labels to sustain the investments that benefits the entire music ecosystem. today's antiquated, complex and time-consuming licensing regime undermines that system, and that's why we believe music licensing must be fixed because behind the seamless experience provided to consumers lurks an

inefficient and frankly broken system. we've got to rethink it. here's what we suggest. first, grant performance right for sound recording. it is frankly inexcuse able that the u.s. still provides a special interest exemption for the benefit of am/f music broadcasters, a subsidy which is taken out of the pockets of artist and their record tables. it's time for that to end. second, make sure artists who recorded before 1972 are paid. because sound recordings are covered by federal law after february '72 and state law before that date some of our most cherished artists are not being paid by businesses who take advantage of the compulsory license. third, allow rights to be bundled and administered together. owners of every other type of copyrighted work are able to license all the copyrights necessary for all uses.

a movie streaming service doesn't have to go to one entity to license the performance and a different ent any to license the making of a server copy, so as it should be for musical works. fourth, create an across-the-boards market-based rates standard. it goes without saying every rights holder deserves fair market value for their work. we should have one fair market value rate standard for uses of all music that remain under a compulsory loy sense. finally, consider a one-stop shop for musical work licenses. we have filed with the copyright office an idea laying out one possible way to license musical works in this manner. it is a potential path towards simplifying the complicated way musical works must be licensed today, but we also understand, as we stated repeatedly in our submission, that no revision to the music licensing regime can move forward unless publishers, songwriters ant all the relevant stakeholders in the community come together on a solution on which they agree. the goals of any solution should

be to align the economic interests and incentives of music creators and ensure that songwriters and publishers receive a fair portion of revenue from the licensing of the sound recording. avoid competition between the record labels and music publishers for the same dollars for licensees. speed the licensing process making it quicker for listeners and musicians to enjoy and make the process more efficient and more transparent. we welcome the opportunity to engage in our mike industry partners on our idea as well as on any other ideas they may have to improve the status quo. the music business has reinvented itself, but our work is not done. we hope by work together with our music industry colleagues that we can find the consensus necessary to simplify music licensing and ensure that all creators are paid fairly. thank you. >> thank you, mr. sherman. mr. warfield.

>> good morning. >> mr. warfield, pull your mike closer to you, if you will. >> good morning chairman coble and members of the ranking subcommittee. my name is charles warfield, and i'm the joint board chair of the national association of broadcasters. over my 37 year career in and around broadcasting i served as president of one of the country's first wholly minority owned radio station groups. i ran day-to-day operations of some of america's top radio stations and i even worked as an executive at a record label. over that time i learned broad broadcasters in many ways. we're local, involved in our communities and serve the public interest. we introduced new and old music. we entertained them with sports, talk and interviews. we're local, involved in our communities and serve the public interest. for those reasons i'm proud to testify today on behalf of the thousands of free local over-the-air radio stations across the united states. the supreme court has repeatedly held that the core objective of the copyright laws are a public good, not the creator's interest

but the interest of the public at large. unfortunately in testimony before this committee some are arguing for fixes to the copyright law that serve a very difficult goal, ensuring that their individual constituencies receive greater compensation at expense of both music licensees and listeners. nowhere in their argument do they emphasize the need for balance, the interest of consumers or enhancements to competition. any one of which would promote the public good n.contrast, stepping back from any one piece meal legislation before this subcommittee it's clear taken as a whole the time-tested laws that govern the relationship between the music and broadcast industries promote the public good in three important ways. first, the existing law has enabled a locally focused radio industry that's completely free to listeners. anyone with a am/fm antenna can receive our programming free of charge, especially in times of emergency when other forms of communication fail, radio is free among entertainment mediums and there's no subscription, no broadcast package oh, pensive

wireless data connection needed for access. second, the resulting popularity of radio has significantly contributed to a u.s. recording industry that is the envy of the world, both in terms of size and scope. while u.s. copyright law may contain some critical differences from its international counterparts, those differences have fostered the largest recording industry in the world, one that dwarves that of the uk, germany, france and italy combined. our unique system of free air play for free promotion has served both the broadcast and recording industries well for decades to the benefit of listeners. the fact is that in all 37 years of my career i have never had a record executive come to my station and say why are you playing all of my music? i've never had a promotion department refuse to provide us with their newest record the day it comes out. they show up at radio where they see the value and realize that we are the greatest promotional tool for their artists, and we're happy to provide them with that. third and most importantly, the

community-based nature of local broadcasting has driven our industry to extraordinary levels of public service. for example, in the wake of hurricane sandy new york city's wqht hot 97 put its music on hold and broadcast steadily throughout multiple power outages, providing a much-needed connection do life-saving news and information. then in the days following hot 97 continued their informational announcements, providing critical information about disaster relief locations and assistance. further, its hip-hop heart foundation provided blankets, clothing, hd radios and essentials to residents of the afflicted areas throughout the crisis. this is just one example of our industry's commitment to service and it is the norm, not the exception. each of you knows this as you see the value of local broadcasters back in your districts every day. but make no mistake. the unique community focus of broadcast radio is only enabled by the current legal framework. i would urge this committee to tread carefully and resist piece meal changes to law that might disrupt this dellgality balance

that's enabled our industry to serve the public good for decades. turning briefly to streaming, i agree with others on this panel that the current legal framework regarding webcasting imposes obstacles on every corner of the music ecosystem that prevents our businesses to serve the public good. today whether you're a large or small broadcaster, the revenue that can be generated from streaming simply does not and cannot offset the costs. so many of our members simply do not do it. i urge this subcommittee to focus its music licensing review on changes to law that will promote a sustainable webcasting industry to the benefit of artists, songwriters and consumers. in conclusion, nab stands ready to work with you to ensure a vibrant and competitive broadcast industry now and in the future that serves the public good. i am pleased to answer any questions and welcome your invitation for me this morning. thank you. >> thank you, mr. warfield. mr. van arman.

>> thank you for inviting me for testifying on behalf of the small and modium-sized business that make up the american association of independent music. i am darrius van orman, and i'm an entrepreneur. i'm the co-founder and co-onner of secret league group, a group of independents in the midwest of the united states. we currently employ 70 employees and have multiple gold albums and singles and one of our recording artists from the state of wisconsin has won multiple gamies. i'm also on the board. a in the-for-profit trade organization representing over 330 independent regard labels of all shapes and sizes from all over the u.s., from hawaii to florida. our sector now comprises 34.6% of the u.s. recorded music sales market. first and foremost, the american

independent sector wants nothing more than a free market with a level playing field. however, there's one thing standing in our way, big companies using their power and resources to take what is not fairly due to them. large technology companies use our music, but because of the safe harbors our current copyright laws provide to them, artists, creators and independent labels are not being fairly or adequately compensated. broadcasters are not paying anything at all to broadcast sound recordings on am/fm radio. this is not unfair to us on the creator side, but it's also unfair to the digital services who do pay croators, and will be our music industry, there's one imbalance that is the primary threat to musical creative enterprise, market concentration. today just through major label groups exists comprising 65% of the u.s. sales market based on

copyright ownership, the largest two of which are subsidiaries of foreign corporations. congress intended that copyright would stimulate new creative works for the public interest for consumers. it did not intend to enable just a handful of private interests the ability to make huge profits unfairly on the backs of creators. while we like the idea of a comprehensive approach to mike copyright legislation, this music bus must be driven by all members of the music creator community, not steered by just a few major private interests towards only their goals. so what do we need? we need stronger copyright protections. the shape of copyright law is currently subsidizing large technology companies. we need a broadcast performance right. broadcasters must fairly compensate all creatorso the creation process can continue. a broadcast performance right will also give us international reciprocity and receipt of overseas radio royalty which will improve america's balance of trade. we need more transparency and

more efficiency in our music licensing system. our industry can't afford to unfairly take value away from artist, creators and those when involvement in these creators. finally, we need a stronger compulsory statutory license for non-interactive performances, as it is the best friend of a level playing field. creator pay must be based on actual music usage. the current music licensing system is broken. it provides incentives for the wrong behavior. large companies take advantage of whatever inefficiencies exist in the marketplace to make an extra buck. so we need copyright law revisions that do the following. increase the value of music, make copyright more equitable, recuse inefficiencies and enable creators to create what consumers desire. our sincere hope is that we can come to these revisions in partnership with all industry participants. the vast majority of small and medium enterprises that comprise

the independent sector are american companies employing american citizens and american offices and directly supporting american creators. almost every dollar that is earned by an independently owned copyright has a much greater impact on the u.s. economy than every dollar earned by a foreign control major label copyright. congress and the copyright office should keep this in mind when it contemplates copyright law revisions as american copyright law should inerr to the benefit of american consumers and creators and american enterprises. in the end all the independent sector wants is a free market with a level playing field. we want to compete to provide the economic growth and job creation that our american economy needs. thank you. >> thank you, mr. van a.r.-man. >> mr. chairman, my name is ed christian and i'm chairman of the radio music licensing committee, the rlmc. the rlmc has been in existence for well over 50 years and is a

nonprofit that represents some 10,000 local radios stations in the united states with respect to music licensing matters. over the years, the rlmc has been involved in extensive music license negotiations with two margins performing rights organizations, askullcap and bmi. the mission has always been to provide a competitive market for music licensing in which radio station operators pay a fair price for performance rights and copyright owners receive equitable ownership. we've achieved cheap and fair licenses for the radio industry through a combination of industrywide negotiation and as necessary federal rate court litigation. while reese eptsly the rlmc has found itself in antitrust litigation involving the smallest of the performing rights organizations in the u.s. in order to curb the company's anti-competitive licensing practices. i'll start by saying unequivocally that licensing redistribution concepts that

rely upon the radio industry for funding are misguided. with particular reference to the recurring demand by the recording industry for a sound recording performance right to be imposed upon terrestrial radio, please understand that the radio industry is not some vast pot of riches that can be tapped as a bailout for record a recording industry that's failed to execute a digital strategy that addresses a decline in its own brick and mortar income. congress unambiguously intended that an exchange for unique promotional support afford record labels and artists, terrestrial radio should be treated differently from other transmission platforms. that premise has not changed. local radio station operators are responsible for obtaining licenses for the public performance of copyrighted musical works. for the vast majority of operators this, equates to a blanket license that permits a station to air music from a

particular repertoire without having to account for actual usage. traditionally the administrative benefits of a blanket license has outweighed antitrust aspects associated with the structure that permits pros to aggregate musical works in a way that is the hallmarks of a monopoly. given a large scale of the radio industry the rlmc believes that a collection of collective licensing is in some form advisable. in this regard the independent and experienced federal judges associated with the askullcap and bmi rate courts have been able to deliver appropriate-setting oversight. a purely free market approach to free market licensing coupled with the absence of consent decrees monitored by the department of justice would invite market abuse and represent a step backward from a system that is served parties well for decades. indeed, the fact that there are currently two antitrust cases in federal court is a testament to

what's happened in the absence of government supervision offent tis that wield the leverage of musical works combined with a club of statutory penalties for copyright infringement. now if congress is dedicated to bold reform that could lead to process efficiencies and enhance royalty payment to creators, it might want to explore the prospect of a super licensing collective along the lines of what has already been proposed by other stakeholders. outside of brazil, it is hard to identify another country in the world that supports multiple licensing entities that administer a single right such as the rights to musical composition. the fact that the u.s. continues to maintain three organizations for this purpose, askullcap, bmi and csap sets up a complicated and redundant licensing systems and licensing payments due creators are being diminished in

their journey from the licensee to the copyright owner. indeed this, ee ropl of the licensing agencies such as the sound exchange and harry fox agency that further contribute to the music licensing morass. before we seize the economic injustices ascribed to creators of musical works to the level of fees paid by music users, the radio industry, we really need to carefully scrutinize the royalty distribution process that dictates how and what creators are paid relative to incoming license fees. rlmc brings long-standing professional expertise and stand ready to work with other stakeholders in fashioning a pragmatic music licensing system that's fair to all and preferrential to none. thank you. >> thank you, mr. christian. . mr. williams. mr. williams, pull that mike closer to you, if you will. >> there we go. good morning, chairman coble and

goodlatte, ranking member nadler and conyers and members of the subcommittee and visiting members of the larger organization. my name is paul williams and i'm a songwriter, american songwriter and also have the great pleasure and honor of being president and chairman of the board of the american society of composers, authors and publishers. we are askullcap. in 1914 a small but visionary group of american song write hers an idea. they believed they could protect their rights as music creators more effectively if they joined together rather than going it alone so thank god they formed askullcap. today more than 500 songwriters and writers and music publishers trust and depend on ascap to monitor performances and distribute royalties all on a not for basis, i'll repeat, that on a not-for-profit basis. i'm honored to appear before you today to speak on their behalf.

we're here today because technology is changing in the world in wonderful ways. we're moving into a world where people no longer own the music they love. they stream it whenever and wherever they want. at the same time the federal regulations that govern how music is licensed and thousand how song writers like myself are compensated for our work do not reflect way people listen to music today. in fact, they are stuck in the distant past and it's threatening the very future of american music. ascap is governed by a consent degree created in 1941 and last updated in 2001. that's incidentally before the ipod ever hit a store. we all know the music marketplace has changed dramatically since then and sadly new music services are finding ways to take advantage of this outdated regulatory system. . consider the fact that it takes 1 million streams on pandora for a songwriter to earn $90, 9-0 dollars.

for some perspective, one of the most popular songs in 2011 was lady anti-blum's hit "need you now." for 72 million streams on pandora, the four songwriters earned less than $15 hundred apiece. meanwhile, record labels and artists often earned 12 to 14 times more than songwriters for the exact same stream. such an imbalance would not happen in a free market where competition exists and where creators have more of a say over how our music is licensed but under the current consent degree congress compensation reflects the true valve our work less and less even as our music is performed more and more. there is now a very re voluntary collective licensing could soon collapse and make the system more complex, more

inefficient and more expensive for everyone including music fans, the people that love our music. unless we do something to fix it. now, i sit here vaughned by representatives of multi-billion dollar corporations that profit from our songs, and i find it beyond perplexing that american songwriters like roseanne and myself are the ones subject to the heaviest government regulation. be that as it may i believe that all of us working together to modernize the music licensing system will allow songwriters and composers to thrive alongside businesses that revolve around our music. we want you to be a giant success. you are delivering our songs to the world. to that end we're proposing several updates to our consent degree with the department of justice. we believe these updates can save voluntary collective licensing from the serious risks facing it to the benefit of music users, consumers and creators alike.

first, we need a faster less expensive process for settling rate disputes with businesses that use music, one that uses independent agreement reached in the free market as benchmarks. second, songwriters need flexibility to manage our own rights. we should be allowed to grant ascap the right to grant licenses to our music, it's our music. doing so would foster greater xeization in the marketplace. finally, we can streamline the licensing process for thousands of music creators and users by giving ascap the ability to license all of the composition rights in one transaction. passage of the songwriters equity act introduced by representatives collins and jeffries for which we are most grateful is another crucial piece of this puzzle. it is a simple and reasonable fix which will enable a court to consider sound recording royalty rates as evidence when

establishing songwriting royalty rates. working together to make these changes i'm confident we can preserve the immense benefits of voluntary collective licensing, benefiting businesses that license moussics and listeners who enjoy it while enduring that songwriters and composers are compensated for the true value, for the true valve our music, the true value our music brings to the marketplace. thank you for the opportunity to share this with you today. thank you so much. >> thank you, mr. williams. mr. harrison. >> thank you, mr. chairman, ranking member nadler, chairman goodlatte, ranking member conyers and other members of the committee. pandora appreciates this opportunity to testify at this important hearing. without question pandora is delivering tremendous value to listeners, artists, songwriters and the music industry. 77 million listeners tuned into pandora last month and listened for an average of 22 hours.

every month pandora performs more than 1.5 million songs by more than 100,000 recording artists, 80% of home were not played on terrestrial radio. pab dora contributes hundreds of millions of dollars to a new royalty stream for artists that did not exist 20 years ago. just nine years after launching, pandora will celebrate a major milestone late they are summer. $1 billion in total royalties paid. as this committee considers opportunities to improve music licensing, pandora hopes the committee will appreciate the essential aspects of our current system of statutory blanket licenses including the consent decrees which encourage innovation through simplified licensing procedures, protect music users from the anti-competitive behavior of big copyright owners and assure that artists receive their fair share of the hundreds of millions of dollars in royalties that services like pandora pay each year. in today's highly concentrated music industry with fragmented

and opaque copyright ownership, statutory blanket licensing is the most efficient means for digital music services to license the millions of copyrights owned by tens of thousands of copyright owners and are necessary to offer a compelling service to consumers. as the future of music coalition recently stated, quote, the incredible growth of internet radio would have been inconceivable are phlegmling webcasters had to deal with everyone individually. without obtaining permission to play songs, internet radio might never have happened. close quote that. being said, pandora's recent experience reflects the very real and continued anti-competitive behavior of major music publishers in the performing rights societies reflecting a continued need for government protection. as concluded by the federal judge who oversaw pandora's rate proceeding with ascap, quote, the evidence at trial revealed

troubling coordination between sony, universal music publishing and ascap which implicates a core antitrust concern underlying the ascap concept degree, close quote. statutory blanket licenses provide important transparency into how royalty payment are calculated and enable direct payment to recording artists and songwriters. without them, the royalty permit process would be controlled by record labels or music publishers, where uncouped advances are deducted and a smaller percentage of the royalty, if any, is passed through to the artist. while pandora believes the statutory blanket licensing should remain a central feature of copyright law, congress can improve the efficiency of determining the reasonable fees for such licenses. for example, double respondents to the copyright office's recent notice of inquiry noted the expense and burden of the current copyright board

rate-setting process highlighting, number one, the need for the application of the federal rules of civil procedure and evidence, two, the establishment of the unitary proceeding with ample time for discovery and presentation of evidence, and, three, the application of the so-called 801b standard. we would also recommend in order to foster greater transparency the creation of a single database of record hosted by the copyright office and housing all relevant copyright information. participation need not be mandatory but congress could incent robust participation. for example, just as chapter four of the copyright act preveents a copyright owner from seeking statutory damages unless the issue is registered, congress could require an entitlement to statutory damages would be contingent on registering and keeping accurate information in this database this. would help prevent copyright owners from holding pandora

hostage during negotiations, something we experienced in 2013 when a handful of major publishers threatened our business with massive copyrightic fringement penalties. in addition to enabling services to quickly ascertain who owns which rights to a work a single database of record would enable services to identify the owners of songs it performs which would encourage real competition among copyright owners for distribution across all platforms. it is important to note that while transparency would help mitigate anti-competitive behavior it would not alleviate abusive practices entirely. that's why the protection of statutory blanket licensing and the consent degrees might be preserved. thank you and i look forward to answering your question. >> thank you. mr. hupp sgle mr. chairman and members of the subcommittee, i would like to start by telling the committee something you probably don't hear very often. congress to congress on getting it right. for over ten years now sound exchange has administered the

statutory license for sound recordings on digital radio that this committee created in 1995, and that decision shines as a true legislative success story. it provides transparency and efficiency that makes possible the digital radio services enjoyed today by over 100 million americans. it has led to a critical and growing revenue stream for sound exchange's 100,000 accounts which represent featured artists, background musicians, label and rights owners, large and small. and the statutory license has provided a huge commercial benefit to the 2,500 services who have used it to build their services, some of america's best known and largest companies with household names like pandora and sirius xm providing them easy access to the product they needed to get off the congress. congress removed the barriers to entry and a burgeoning multi-billion dollar industry grew and while you've heard many parties discuss problems elsewhere in the industry, mr. chairman, everyone, everyone

connected with the sound exchange world, which includes the entire recorded music side of the business, artists, labels, unions, even the digital services themselves, everyone uniformly supports the fundamentals of the system. but as we move forward there's one core principle that should guide everything that we discuss, and that is this. all creators should receive fair pay on all platforms whenever their music is used, period. everyone who has a hand in the creation of music deserves fair market value for their work and i mean, everyone, mr. chairman, sock writers, publishers and studio producers and engineers, the artist who give compositions life and record companies who help artists fill their creative vision. fair pay would ensure justice for creators whose couldn't abuses form the soul of the services. fair pay would level the playing field for radio services and it would help ensure a healthy vibrant ecosystem for listeners and fans. with that guiding principle

would i like to propose a good modification for helping this good system work better. first, congress must address the current royalty crisis facing legacy artists with recordings made before 1972. the refusal of some radio services to pay royalties for this era of music makes no sense as a matter of policy and is surely not what this committee intended when it created the digital radio license. it is just wrong to pay nothing to artists who created the most iconic era of music in american history, and on behalf of sound exchange and all the artists we represent, i send our thanks to congressman holding and ranking member conyers and all of the members on this committee who have joined them in supporting the respect act. i urge the committee to act now on this critical piece. pre-1972 artists simply did cannot afford to way. second, congress must ensure that all radio platforms pay all creators. this means eliminating the ancient and unfair loophole that allows the $17 billion am/fm

radio industry to pay nothing for the source of its lifeblood. fm radio uses music to draw the crowd and make its profits yet ignores the performers at the center of its stage. fm's tired and steal justifications for taking care of artists rings hallow. third, mr. chairman, once all platforms start paying creators, they should pay according to the same fair market standards. it makes no sense that similar radio platforms play by different rules especially in today's world where those platforms may compete against each other in the same places over the same speakers to the same listeners. to quote ranking member nadler's opening system, the government must get out of the business of picking winners and losers in this industry. if we want innovation, the law shouldn't give favorable rates to some companies or brakes to older formats. stated another way,

mr. chairman, these businesses should compete based on their legal appeal and economic value, not on the strengths of their legal loopholes. so, mr. chairman, what would success look like for music licensing going forward? it would be a system where many of the challenges we're talking about here today would fade into the background, where the back office would work seamlessly and invisibly, where we're focused on business models and consumer offerings rather that be rate standards and inequity. success would mean a system where the entire music community worked cooperatively to address these issues for the collective good and most importantly success would mean a system based on the guiding principle i set for the earlier. all creators receive fair pay on all platforms whenever their music is used. in closing, the american music industry represents some of our best talent and most cherished asset. all we're asking for is something pretty simple, that those responsible for bringing these treasures to life be

treated fairly whether someone else profits off their work. thank you, mr. chairman. >> thank you. mr. frear. chairman coble, gloth and ranking members of the subcommittee, my name is david frear. i'm executive vice president and chief executive officer of sirius xm. sirius xm is one of the largest radio providers in the united states. we have over 25 million subscribers, subscribers residing in every congressional district in the continental u.s. and we employ 2,100 people around the nation. sirius x is well-positioned to offer testimony on these copyright issues. in 2013 we paid approximately $325 million in royalties to record companies, publishers, songwriters and artists. we have paid over 1.8 billion in music royalties since we launched service 11 years ago. i'd like you to take away four key themes from my testimony. first, parity.

radio is radio whether it is aime, fm, satellite or internet radio. all internet companies should pay for the music they pay for music they use on the same basis, no exceptions. conditioning to except terrestrial radio markets who generate over 15 billion in revenue is bad policy. copyright law does not distinguish between aime and fm radio based on technology and it should not distinguish between a.m., fm sat lied based on technology. second, today's copyright act creates an unfair digital disadvantage. drawing any distinction based on the claim that some radio services are digital while others are not is based upon a false premise and produces a distort distorted result. terrestrial radio began broadcasting digital signals over a decade ago, and they have routinely made digital companies in the ordinary course of their

broadcast organizations since the 1980s. similar services regardless of the mechanism or medium through which they are delivered should be treated similarly. with each rate-setting proceeding, the digital disadvantage between terrestrial radio and other radio services just gets wider. the two pending bills of songwriter equity act and respect act will only further widen this digital disadvantage. third, protection from market power. the music business has never been more concentrated than it is today. three companies control nearly 90% of the market for distribution of music, the same three companies control nearly 70% of the music publishing market. two pros control over 90% of music performance rights and one collective controls the sound rights. the consent decrease do not interfere with compensation. they prevent activities that would otherwise constitute clear violations of the antitrust laws.

recent attempts by copyright owners to partially were you a from ascap or pmi in an attempt to cherry pick entities who are relying on their pro licenses for access to those publishers' works are troubling, especially in light. publisher's refusal to provide the catalog data that would allow the services to remove the catalog from the air if they couldn't reach agreement on the fees. the willing buyer and willing seller standard can only work when there's an actual free market. there is no functioning free market in music licensing because of the unprecedented concentration in the music industry and the aggregation of the power and the pros. congress should instead adopt the 801-b rate-setting standard for a broad array of music licen licensing. that would ensure that both copyright owners and users are treated farrelly, including

potential new users, like terrestrial radio. the 801-b standard is a matter of simple fairness that was adopted that services subject to that's standards founded those services at a time when there was no sound recording service at all. to change the standard now would undercut the reliance interest of those services, so in summary, while the $15 billion a.m. and fm radio services pays the pros approximately $300 million per year they do not pay a penny for sound recording performances. by comparison radio companies like pandora and sirius xm are less than one-third the size of a.m. and fm in terms of revenue what will pay more than two and a half times, nearly $800 million in music royalties this year, it's simply bad public policy to reward the biggest entities in the radio field with the competitive cost advantage while penalizing innovation and emerging services that increase

economic activity and create jobs. as you consider new legislation it is my hope that you'll recognize the unbalanced playing field for the music licensing today and craft an equitable and durable solution. i thank you for the opportunity to testify. >> thank you, mr. frear. appreciate that. i want to thank the panelists to no one abused the five-minute rule and for that i appreciate. we'll try to comply with the five-minute rule, too, so if you all could keep your responses as terse as possible we'd appreciate it. miss cash, let me start with you. do you believe the music licensing system should be set up in such a way that makes it easy or at least more simple for artists to understand how they are being paid and who is paying them? >> i do. i think that transparency is essential and the lack of transparency is a huge part of the problem.

for instance, there was a petition going around not long ago from pandora asking musicians to sign it, and it was very enthusiastic about how that would benefit us. we found that to be somewhat manipulative, not transparent and in fact they lobbied for lower rates for us, so if fans are confused, which they are, they come to me all the time and say how do i buy your record. what is the decent thing to do. how can i support you so you keep making records? if they are confused and we're a bit confused, i think tra transparency would go a long way towards clearing this up. >> miss care, you opened the transparency door so let me walk through that door. i'm going to put that question, if i may, to mr. harrison and mr. williams. transparency is a word this subcommittee has heard repeatedly, quite a bit

including transparency, transparency on who pays and what and transparency in how royalties are divided. how should the congress, in your opinion, consider the issue of transparency as we consider potential changes to our music licensing laws? is transparency just as important and vital and start with you, mr. williams followed by mr. harrison. >> my hearing is a little bit off but if i get the gist of what you said and my hearing is not the best. >> nor is mine so i can relate to that. >> your question, as much as i could hear was related to transparency and ascap is very proud of our transparency. we have a database for our members, if this -- if "the love boat" theme i wrote is being played in lithuania, i can find out it's being played. i must -- i have to disagree with mr. harris, he was perhaps

misinformed in what evolved in the pandora case with sony. i want to straighten that out, first of all. we're very proud of the fact that we are open and transparent on all cases. when pandora requested information on licenses, for example, two days before the end of their -- of the trial. we immediately gather that had information and after two days when we had it all together we reached out to pandora and said would you like this information. we never heard back from them. i understand communication in a multi-billion dollar organization is not the best. perhaps that didn't reach the head office, but we had the information that they wanted and we have it today, and i have to tell you, mr. chairman, that i believe any business that -- any licensee that we do business with has the right to know what they are getting for their money, so we have that information. it's open and available. we are proud of our transparency on all levels, and incidentally, there was never any finding of

any improper coordination between ascap and any of the publishers. if it had been i'm sure that the very capable judge would have brought it to our attention and would have filed on it. there was never any such filing. >> thank you, sir. mr. harrison. >> yes, transparency is a key part, as mr. frear indicated, to any free and competitive market. the ability for users to understand who owns the content that is supposedly being licensed and our ability to access that information with due respect to mr. williams, i don't want to get into a debate about what happened in a trial. there's a 136-page opinion that's very detailed by the judge, and if the chairman would like it, i'm happy to provide it for you. >> let me try one more question before the red light appears. mr. sherman, with the world going digital and the need to update our laws to the digital age is the time to finally

resolve music licensing once and all before us? >> definitely. the opportunity has never been greater. it's when the system is in crisis that there's an actual opportunity to bring people together to actually try and make a difference. that time seems to be now. >> anybody else want to add very briefly to that? i'll open the floor, the door if you want to because my red light is about to illuminate. i recognize the distinguished gentleman from new york, mr. nadler. >> thank you very much. let me say before before i begin some questions. heard a lot of testimony today, heard testimony about the advantage of the -- what do you call it, the free -- the free air play for free promotion system has served the industry and served everybody well, and, you know, it's a good thing. let me say i find that argument

incredible. in a capitalist system it may be somebody's judgment that not paying people for their performances because they get compensation or that may be a judgment or may be correct. it may be equitable, but it should be the person who is serving or being broadcast. you won't go into a store and say i decide that the price of that is such and such and, therefore, i'm going to take it at that price. someone who performs can't be told -- i don't see in any rational system be told that we've decided for all these reasons you should be happy with just promotion. i don't see how quickly or morally somebody has the right to make that decision, certainly not congress.

so all the arguments based on that are simply non-starters as far as i'm concerned. lots of debate on everything else and balancing considerations, but there's no balance saying we'll take your work and not pay for it. it's not a balance. it's not a consideration. mr. huppe, many have said it's time for a unified comprehensive approach to address the licensing problems of the music agree. do you agree, and if so what, steps should congress take to bring that about? >> yes, mr. nadler, first off, thank you for your comments on promotion. i could in the agree more with your thoughts on that, the concept that the broadcasters believe they can take that right and not pay for it as ludicrous as suggesting that a book could be made of a movie and yet the author of the book does not have to be compensated or that the nfl can broadcast games on national tv but yet the nfl doesn't have to be compensated. in terms of unification, i agree with you. we do need to streamline the system of licensing. one of the benefit of the

statutory license that sound exchange operates under is a system that's transparent and efficient. we're the most efficient of what we do. 90% of our royalties are out the door in 75 days and having a streamlined system is absolutely crucial. >> how is a lack of a terrestrial right affected artists and the music marketplace? >> artists have lost hundred of millions, not just in the united states, but they alsolo lose royalties overseas. >> if they got that money, what impact would that have? >> overseas? >> here. >> depend on what the rate was, but if they got that money it would go a long way to compensate the artists who

deserve to be paid. >> thank you. miss cash, would you comment on that question. >> i agree. the idea that i'm patted on the head and said, well, it's promoti promotional, it's good for you. i would rather have control of my copyrights and would rather be paid for that. i'm a songwriter as well and the fact that they can use my sound recordings to make bill kwlons of dollars for themselves andous my work to sell ads, it's not only ludicrous but it's insulting. artists should have control of their cop writes. >> mr. frear, you said there's no reason why satellite radio should pay royalties and terrestrial radio continues to receive an exemption from that obligation.

should i take that you believe everybody should get paid or no one should get paid? >> i actually do feel everyone should get paid. >> thank you. there are different rate-setting standards applicable to different uses of music. some are established under the 801b standard which many argue e set according to the willing buyer and willing seller standards. are athey justified? what is that? >> they'll really shouldn't be justified. everybody should be paying on the same rate standard regardless of the platform on which the music is appearing. it make sense to have different standards for different platforms. it's having congress pick winners and losers which is not what congress ought to be doing. >> would anyone on the panel disagree with that? >> if i may with the fact is there's so many different -- down here.

it's paul williams down here. >> license is many different plat forms for our music. radio, television, cable, satellite, and happily now, pandora. and you know, we operate -- we're one of the most efficient performing rights organizations in the world. we don't operate at the percentage that you do, sir, at sound exchange because we have a much wider group of people that we're servicing with our music. the fact is that trying to operate under the consent decree as it exists right now is crippling to us. we operate at 12%. 12%, which would come down considerably if we could be relieved of some of the millions and millions of dollars we spend in -- >> i'm sorry. what do you mean you operate at 12%? 12% of what? >> let me ask if pandora will be kind and help me on the? >> 12% is our -- 88 cents of

dollars we collect goes to our writers so the 12% faking care of a large group of people keeping track of everything that's going on. we do it more efficiently than anybody probably in the world. one of the most efficient. this rigorous honesty is a part of my recovery and part of my oath today but i'm proud of the way we operate. when you look at a system where the recording labels and the artists receive 12 to 14 times more for the exact same thing we get something is broken. you can do two things for us in congress. first of all, you can smort our efforts with the department of justice and you can pass the songwriter's equity act which allows us to go in court and present both sides -- both copyrites and the information about what they're both being paid. a huge, huge -- what congressman collins and jeffries have offered is not a comprehensive -- it's not going to fix everything. but it's a beautiful inroad to putting balance into the way we operate.

we're so grateful for that. i think that what we all want is to see -- i mean, i want pandora to not survive but to thrive. you know? i made albums that even my family didn't buy. i love the idea that he's going to go out there and make it available for anybody if they might want it. >> than i you, my time is expired. i yield back. >> thank you. >> thank you, mr. chairman. i'd first like unanimous consent to insert into the hearing record house current resolution 16, we is the local radio freedom act which states in part a that, quote, congress should not impose any new performance fee, fax royalty or other charge relating to public performance of sound recordings on a local radio station for broadcasting sound recordings over the air. local radio stations provide promotion of the music they play at no cost to the listener. this concurrent resolution has

225 by partisan okay sponsors which is more than the majority in the house. and i think it's important to, at least, mention, i know we've had some disparaging remarks about the recording members of our industry from some panel members and i understand that but i thought it should be at least part of the record. a couple of comments before i get to a question. >> without objection those documents are entered into the record. >> thank you. mr. huppy? >> yes, sir. >> i wanted to thank you. i think we're something like 7% approval now and to say congress actually did something right, we don't hear that much around here. >> happy to oblige. >> thank you very much. and mr. williams, we've had an opportunity to neat a number of times over the years. you're a national treasure. thank you for everything that you've done.

to make life better. got some amazing songs. thank you. let's see. mr. freer with being an old congre codger. sirius was in the car and we enjoy it around the yes. >> thank you congressman and my daughters thank you, as well. >> cousin brucy in particular, and peter is sort of a -- we can relate to that it's interesting. and now, to a -- one question i always have. this is a large panel. we usually have four or something like that. we've got nine. and a lot of interest or recognize -- is there anything particular interest that probably should have been added or that we could have been added that didn't or got overlooked? anybody have any comment on that on on the panel?

is there anybody else that, perhaps, we could have thought of that didn't get in? it was overlooked or whatever? >> i'm say one thing, congressman, we have, obviously, a large panel here and we have great performing artists representatives, obviously, two artists to our right and one mornt constituency of sound exchange, the two leaders in our industry. the american federation of musicians and also, sag aftra and the unions represent another important group of nonfeatured artists, background musicians and vocalists who also have a very important voice in this debate, i think. >> thank you. >> and during the copyrite hearings that we've had we heard if term "free market" used a lot, from every different side of the debate. i'd kind of like to hear how our recording artists view a free

market system working, do artists a free market alternative and the listening system that we have today? with so much consolidation in the industry, do you believe it even possible for music to truly become a free market? mr. williams? >> that's what we're seeking. we're seeking a free market. >> it will dictate what something is worth. and the last thing, you know, the last thing that we need is less control of our music. you though, the one area where you can get a sense of what the free market is in one of is in sync licenses. everything else is basically controlled with the department of justice. but if you look at sync licenses, it's straight ahead free market it's about a 50/50 split. in a sense, this is the united states of america. we can trust business to work things out. and incidentally. i will thank pandora.

that's a classic example of the two of us working together when i can't hear what you're asking me and he tells me and i'm trusting that he's telling me the actual questions. so it's a -- the fact is -- >> the question is, what's the performance right? >> i'm i little david and goliath moment, sitting between the giants of the industry. i left my sling at home but what i brought is the truth and the truth is it represent 500,000 songwriters, composers and publishers and what an honor to share this time with reeosanne. what we do is reach into the center of our chest and write something that will affect people's lives, that will comfort them in sad times. all i wanted was to right something that would make a young lady say yes to marry her and three times, thankfully, that happened. so -- we can all work together. i can turn to pandora for help. i thank you so much for examining this system.

this system is broken. most of our money has always come from traditional -- bars and grills, radio, wonderful radio. amazing relationship had with radio over the years. they give us a piece of their advertising money in a system that we've been able to work out. you know, you sit down and rrol your sleeves and strike up a deal. the fact is the world is chaining and people don't want to own their music. they want to stream it and thanks the people like pandora and spotify, i can hear my music anywhere in the world. in my car anywhere. it's a wonderful time. it should be the golden age of music. for the music listener who is the person we care most about, this is a time that they should celebrate. the stream is a dream. it should not be the nightmare for the men and women who create music. >> thank you. >> paul, you should have brought the infamous -- the stack of phonebooks that we talked about,

old times. >> yeah, exactly. that's right. i did. i conducted an orchestra for dick sclark standing on a bunch of phonebooks. on this room i'll stand on the bible. >> dr. chu? >> thank you. as co-chair of the creative rights caucus i firmly believe that artists should be fairly compensated across all platforms. but we know this is not the case in the u.s. in fact, let me tell you about the story of yanita who provides a contrast between finland and the u.s. she is a recording artists from finland who live there for her first 18 years, became a professional singer at a young age in her home country. she was paid for her performances on the radio in finland which was about a third of her income. then she moved to new york when she was 17 to take the next steps in her career. she achieved success with having two billboard magazine top 40 u.s. radio hits but was shocked to mind out