 We apologize for having to keep this thing moving, but we're going to keep this thing moving in part because we are thrilled that our keynote speaker has been able to join us from the Senate where things are incredibly busy. Hello, microphone. Hello. Hello. Thank you. I was going to just keep talking until I know. We are thrilled here at Future Music of having a long tradition of being able to create a platform and provide an opportunity for elected officials who are particularly crucial and critical to our community, to the music technology world to come and share their feelings or thoughts, their ideas about initiatives that they're pushing that have a direct impact on musicians and on the broader cultural community. Today, as you know, we are particularly thrilled to be welcoming back to Future Music Senator Ron Wyden. Senator Wyden has been representing the state of Oregon since 1996. Correct? 96. And through his tenure, as long as distinguished tenure in the Senate, he has been a leading voice on speech. He's been a leading voice on technology, on the need to protect innovation, and really on the need to really try to look outside of many of the kind of traditional policy constraints that we find ourselves in. He's an innovator and he really is looking to push. Most of you know, or many of you know, that he was a very lonely voice in raising concerns over the last several years around the legislations called PIPA and acknowledging that there are challenges that need to be addressed and need to be fixed, but make sure that we do it in a way that makes sense. We solve the challenges that are in front of us. He, as we've talked about earlier today, is a lead sponsor of the Internet Radio Fairness Act, a piece of legislation that is complicated. How's that sound? And we are really excited that he's here today to talk about his view of where we're going in the future. I'll take a couple of questions and it's really a pleasure and our honor to welcome Senator Ron Wyden. Thank you very much. And as most of you know, this is the start of the lame duck session. That all begins today around five o'clock. And as I was coming over, we were all visiting in the car and there's this wonderful group, The Replacements. And they had a terrific song, one more chance to get it all wrong. And I said, we're not going to let that be the lame duck session. That's not going to be the lame duck. This is an important meeting because the intersection between computing and internet technology is especially important right now. And as I was reflecting over the last few years as a baby boomer, I've had the chance to witness innovation in both music and technology. And like many Americans, I really started that interest in the 1960s. That was the day when I wanted to play in the National Basketball Association, had a full head of hair, rugged good looks. And of course, there have been loads of changes since then. Sheet music by the 60s had given way to the phonograph. Radio was competing with live performances. Johnny Cash had walked the line. Yes, Paul had electrified the guitar. And Chuck Berry had already slung his low to bring us rock and roll. And obviously a lot of you weren't around for all of that. But for those of us to be able to experience the British invasion, to hear the Beatles do for rock and roll, what Dizzy Gillespie did for jazz, to hear Joplin scream the blues and be comforted by Hendrix soaring distorted Stratocaster, those were wonderful inspiring days for American music. Now by the time I had started my way into public service in the House of Representatives, the punk sounds of the clash, the Ramones and the new wave sounds joy division blasted through headphones, headphones of walkmans throughout the country. And popular music was evolving at an inspiring rate as were the means of delivering it. And I bring this up only by way of saying this is integral to the discussion we're having now about internet radio because music and technology have almost been two sides of the same coin. They've been integral to each other for years and years. In effect I start this by saying if you look at that early period with the phonograph, the music industry was inextricably linked to advances in technology. The development of semiconductors, the desktop PC, the worldwide web, handheld computers and broadband wireless internet connections transformed the way that people consume and share music. So every technological change, all of those required laws that govern music rights. But when you have these accelerating changes in computing and internet technology like we've seen, you have to ask yourself has the law fallen behind? And I'm of the view that the answer to that is indisputably yes and it is falling further and further behind and that is not in the interests of consumers and artists and our country. Now in the old days, Tuesday often meant a trip down to tower records to see what new music was out. Now new music Tuesday means checking your smartphone on the way to work and downloading what you want. That I think captures the changes that we're talking about as well as anything. And if you start with that, the question of change, American music in my view has long benefited from the innovators. Those innovators took what my staff, Jamie White and others say was a punk rock approach to music promotion and enabled a lot of small independent record labels to find real success in the 80s and the 90s. And they basically founded by going where the major labels weren't going. They were going to places like college radio and independent record stores. Now as we know, for much of the last half century, the music business has essentially been a vertically integrated industry managed by a few big record companies. These are the companies, these record companies, who in my view are using uncompetitive practices to crowd out the competition for radio and TV and record stores and elsewhere. They are the people who made paola a household word. The result in my view is less artistic innovation and fewer innovations that will be widely shared and consumed. Now if it weren't for the disruptive independent record labels, even about people like IRS and Subpop and Tim Kerr, we might never have known much about bands like REM and Nirvana and the replacements who I just told you, I don't want to dedicate the lame duck session of Congress to, but I sure want us to remember their enduring influence on not just rock music, but on their contributions to our culture and an entire generation. And there are a lot of other change agents as well, Sean Parker who founded Napster, the creators of YouTube, and I gather that you all heard from Tim Westergren earlier today with Pandora. So the history of American music is one of artistic creativity, technological advancement and particularly those innovators, the dreamers who are willing to disrupt the status quo. And my view is that we've got to make sure that's what the future is all about. That kind of ongoing innovation and in many instances what is sure to be disruptive innovation. If video killed the radio star, let's hope that digital revives the American music industry. Now, I'm not of the view that it's my job on the floor of the United States Senate to figure out what the business models for music ought to look like, but it is the job of policymakers to ensure that the law and public policy doesn't favor one business model over another and particularly that it doesn't favor incumbents over insurgents. We've got to make sure that the past doesn't get a leg up on the future and I think a lot of you remember that in these kinds of debates so often it seems like the future never has a lobbyist. There are lots of blue suits, dark suits, and ties for slicing up a fat hog, but there isn't so much of a voice for the future and I think that's why we want to remember that in terms of making these policies. And I want to just take you for a moment down how I came to this sort of particular world view because it tells you a little bit about how things change and how it changes pretty fast. I hear we got a lot of folks from Oregon here. Raise your hands if you're from Oregon. One, two, okay, the Oregonians are outside, they're having coffee. I came to the Senate in 1996. I was Oregon's first new United States Senator in more than 30 years. We're making dramatic changes. We had previously the Chairman of the Appropriations Committee, Mark Hatfield, and the Chairman of the Finance Committee, Bob Packwood, and the old saying about Oregon was, excuse me, Bob Packwood raises all the money on the Finance Committee and Mark Hatfield gets to spend it all on the Appropriations Committee. And it was clear with an election and these dramatic kind of changes, we were going to be looking at a variety of questions with respect to the future of the economy. And I made the judgment then that I was going to work my head off to strengthen Oregon's traditional industries, particularly forest products and housing. And in addition, I was going to help be part of an effort to lead our state into a whole new wave of technological opportunities and put us in the forefront of innovation on the technology side. And when I came to the Senate, the Internet was something that not only were most senators kind of up on, it was really something that people had just begun to hear about. And there was an effort early on, much like in the debates today about PIPA and SOPA, where you have a laudable idea. In the case of PIPA and SOPA, it was fight piracy, but the strategy for doing it, unraveling the architecture of the Internet doesn't make sense. And when I came to the Senate, once again, there was a laudable purpose. We didn't want our kids, small kids, to get access to a whole bunch of smut and porn and the like on the net. And back then there was an effort to take a step which also would have been ill-advised. Really as ill-advised as PIPA and SOPA was in terms of fighting piracy. The idea was just to censor what went on in the net. And I and others said that doesn't make any sense. How are we going to encourage growth on the net if there's secondary liability, for example, on the web for somebody who has a website because somebody posted something on it? And I was able to be part of a coalition that passed a law that said that you wouldn't have that kind of secondary liability. It's called Section 230 of the Communications Decency Act. And a lot of people now believe that had we not passed that and you could have held websites liable for what was posted on their sites, usually stuff they didn't even know about, we probably wouldn't have had people invest in the social media in Twitter and Facebook and Google because you'd want to invest in something where you'd be held liable for something that was posted on your site. So I began to adopt the kind of principles then of trying, number one, to make sure that government did know harm, number one. And number two, government always tried to be on the side of innovation and that has been my sort of bedrock set of principles throughout this kind of 15-year odyssey in technology policy. It's what led me to write the Internet Tax Freedom Bill to protect communities and small businesses from discriminatory taxes on Internet commerce. It's what led me to write the Digital Signatures Law so that if some of you, and I bet in this audience, you'll be buying your first home before too long, you'll now go through those documents digitally as opposed to waiting around and waiting for everything to be signed with snail mail and all these other kinds of approaches. So what we're now faced with once again is trying to find approaches in an important part of technology. And where technology and radio kind of intersect to make sure that the person without money and without power and clout but important ideas and important contributions can have the same ability as a deep-pocketed incumbent to be successful. The Internet still is the great equalizer. That's exactly what I hoped it would be 15 years ago, and that's why I believe that the future of music, the future of a music marketplace that promotes the diversity of music choices and adequate compensation for artists, is one that is best enabled by an open Internet and one that does not discriminate, does not discriminate against the innovators. That is a marketplace, folks, that does not exist today. Music is still dominated and controlled by a couple of multinational corporations who, of course, in effect act like a duopoly to maximize their profits, not maximize the compensation of artists, and not maximize musical, you know, choice. My view is that net is capable of freeing artists from what really are these kind of shackles, almost, of major record label men, major record label middlemen, by enabling artists to broadcast and sell directly to the consumer. Now, unfortunately, as a result of a 1998 law, of course one championed by the incumbents, by the incumbent record industry, Internet radios has been constrained. The royalty rates prescribed for Internet radio, and that, folks, ultimately is what our bill is about. What the bill I have in the Senate with Jason Chaffetz and Jared Polis is all about, I heard somebody say it was about the First Amendment. It has absolutely nothing to do with the First Amendment. I don't take a back seat that anybody, anybody in terms of First Amendment rights. It's a bill about royalty rates, folks. That's what the bill is about. Royalty rates and not discriminating against the innovators, the slackers, the IHAR radio, Pandora, there are lots of them, and right now they, you know, pay more, face, you know, discrimination through a process based on determinations by this panel of special copyright judges that make their, you know, own judgments about, you know, market rates. But the reality is there is no functioning, you know, market here, and the judges are left with not much information to make their decisions, the decisions that we want to be reasonable and decisions that encourage innovation. The current method that the judges use to establish royalty rates for internet radio has led today to webcasters paying five times, five times the amount of royalties as a percentage of revenue as other digital music broadcasters like Satellite and Cable. And I just don't understand the case for allowing that. And that's why the bill that I've introduced, it's been introduced on a bipartisan basis in the House, would treat internet radio for all practical purposes, for the purposes of royalty rates the same way that you treat satellite and cable radio. That is what the bill is all about. We're going to hear the big record labels who oppose this legislation, spend lots of money saying, number one, western civilization is going to end if we have, you know, fairness in these rates and they're going to offer all kinds of, you know, arguments about how somehow royalty rate discrimination is okay. I personally think that if the royalty rates are lower, the internet broadcasting market becomes larger and that's a strategy for creating more income for artists, more music choices for consumers and a broader array of music. And that looks to me like a worthy, you know, outcome. So now we're going to start this debate and I want to emphasize this is the beginning of the debate, folks. This is not the last word. This is not the final, you know, package and you don't have a bunch of congresspeople just say, hey, it's my way or the highway. We're going to have to come up with something that works for consumers of music and internet radio but also something that works for the artists and a big part of what we want to do here is to bring together a new, you know, coalition between consumers and artists because we start with the proposition that if you look back at that history and a couple of you look like you were going to go to sleep there when I was going through that early, you know, history, there really is a link between innovation and innovating these new technologies and what has been good, you know, for artists and the more access that consumers get to the music, the more access consumers get to the music, the better it is going to be for artists and I'm certainly not wedded to every part of this bill but I do think that we ought to build a new coalition between consumers and artists and if we do, we expand the kind of musical choices and musical offerings there's going to be in this country, that's going to be benefit for the listening public and it's going to put more money in the pocket of the artists. So let me use that as an opening salvo. Softball questions will be especially welcome because it's been a crazy, crazy day and I got to zip off but let's take a question or two but do keep in mind because we know we've got a lot of folks here, musicians and the like, I hope that we can build a new coalition between musicians and consumers. That's my objective here. That's great, Senator, I think we've been monitoring Twitter. Yeah, I'm just going to again try to synthesize. Sorry, this isn't a softball. Setting aside this question about rates and assuming that parity and royalty rates is a worthwhile goal, there are some concerns that have been expressed about some of the language in this other part of the bill. Section five, which talks about collectives representing sound recording copyright owners to take any action that would impede direct licensing by copyright owners of sound recordings and competition with licensing by any common agent or collective and makes reference to the Sherman Act. This is the thing that's raised some concerns about free speech. It seems like the issue hinges on the definition of impede and collective. The concern is that the bill permits any company seeking direct licenses, whether it's Pandora or Sirius or Clear Channel or even Google to sue any collective entity including artists organizations for violating antitrust laws. So the question is would the terms collective and impede in your bill include these organizations and if so, why not? The whole point of this, as I say, is to come to the Congress with an approach to end discrimination on royalty rates. This is not about the Sherman Act. I'm a lawyer in name only and my wife agreed to marry me because she made a judgment that I wasn't a good lawyer. So let's let the lawyers run a full employment program here and dissect it. I think that is legal boilerplate so that basically somebody can make a copy so as to webcast there. That is essentially what we're all about then why don't we sit down with you and others but this is not a bill about the First Amendment. Your question basically amplifies what I tried to knock down earlier in my talk. This is not about restricting the First Amendment. I've spent my whole career essentially trying to expand speech and the ACLU and others are almost permanent visitors on these kinds of issues to our office so there's nothing in this bill in my view that would restrict the First Amendment, restrict speech. That collective language probably is some boilerplate kind of term and let us follow up with you on it. Van Beethoven. I was one of the founders of the indie rock movement with my label Pitch Tent Records but it says any copyright owners acting jointly. It doesn't and I went to UGA law school and had them look at this and agree with my opinion that this chills free speech. So would you take this clause out then or rewrite it? I certainly would never ever support anything that restricts free and open speech particularly artistic expression here so if it's the consensus in the legal community that this restricts the First Amendment it will be a very short lived provision. Let me do my due diligence and make sure that other lawyers share that view but that is not what's intended and as I say this is basically about letting people make a copy so you can use it in terms of webcasting that sort of thing. We have time for one more quick one. Have we pretty much pummeled the First Amendment? Guys we're going to make you can I just get the attention of the gentleman? We're going to make you sort of the informal committee on making sure there is no harm to the First Amendment and Jamie White, Jamie White is great. Fair enough. Fair enough. We'll get you together with Jamie White and make sure we work through that. One last question from the back here. I agree that building a stronger digital marketplace for the long-term best interests of artists but we're asking artists to make the short-term sacrifice. Do you have any provisions to try to give short-term relief to artists who are hurting significantly more than internet services or is that not part of the job? I don't know how you would do it and I'm not sure that that wouldn't violate my first principle. I mean that strikes me as something that wouldn't take a lot of government engineering. My whole strategy through every one of those bills, section 230 of the communications decency, the internet tax bill, the digital signatures bill, the SIP PIPA SEPA bill has been to try to limit the kind of government engineering here based on the idea that if you did no harm and you encouraged innovation, that was how you could do the most to help the innovators most quickly. I think the point you're making is a very good one. I want to expand the music marketplace as quickly as possible. If you expand the music marketplace as quickly as possible, you expand the number of consumers and in my view, the compensation that those artists get that you correctly point out they richly deserve. Now if you've got something else that doesn't prescribe a cure worse than the problem, I'm up for it. Pardon me? All right, you want to be with Jamie. More than anything... Jamie, we always knew he was going to be busy this session. More than anything, I wanted to come today because I think this is particularly important work. If you look at the challenges that face the American economy, I also chair the trade subcommittee, the trade subcommittee, the finance committee. I, for example, will tell you on international trade. I think the internet is the shipping lane of the 21st century. I mean, the stakes here in terms of getting it right are enormous. It's why when I heard walking in the concern about the First Amendment, I pulled Jamie aside and I said, I can't figure out anything that is in here about the First Amendment. It's why I want to get together with you folks to make sure that there isn't anything there that would impede what the First Amendment is all about. What you have a chance to do, working with myself and the folks in the House, Jason Chafetz and Jared Polis, too, tech-savvy young members of the Congress, you help us drive this discussion finally, after all these years, literally going back to 1998, drive this discussion in the right direction so that we can promote innovation because I think this group of consumers and artists who want to expand the marketplace for the reasons I've described are on the right side of history, and I'm going to do everything I can to try to encourage your work. Thanks for having me.