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WASHINGTON, D.C. -- Two members of Congress are pushing a bill to "reinvigorate the spirit of competition in the digital music industry" and lead to lower prices and broader choices for online listeners.

Representatives Christopher Cannon (R-Utah), and Rick Boucher (D-Virginia) are co-sponsors of the Music Online Competition Act, which would amend current copyright law to lower barriers to competitive online music distribution.

Cannon says he is disappointed with the recording industry's slow rate of adoption of the online distribution model.

"I personally had great hopes that each facet of the music industry on its own would quickly embrace the new possibilities of digital distribution of music content," he says. "I thought by now we would see the legitimate online equivalents of Tower Records and Sam Goody selling to consumers the music they want."

Hilary Rosen, president of the Recording Industry Association of America, says the online music service industry is already headed in the right direction and that the bill would only substitute government regulation for the competitive marketplace.

"A protracted legislative fight will not move us closer to where the music industry wants to be--delivering music to fans through a variety of different, innovative Web sites," Rosen says.

Organizations supporting the bill include the Digital Media Association, the National Association of Recording Merchandisers, Napster, CDNOW, Listen.com and the Video Software Dealers Association.

Impacts on Royalties, Copied Files

The bills calls for exempting online music sites from paying royalties on the 30- to 60-second samples available to prospective buyers, just as merchants do not have to pay for recorded music played in their stores.

For listeners worried about losing their downloaded music files in a hard drive crash, the bill would make it legal for consumers to make backup copies of these files, extending to music files the same privileges that owners of computer software already have.

"Under current law, an anomaly is created because the consumer can back up the software that he uses to download the music, but he can't back up the music that he has purchased over the Web," Boucher says. "If his hard disk crashes, he would have to go back and purchase the music again."

Worried that record labels might license their music libraries to only a few record company-dominated online distribution sites, the bill's creators included a provision opening licensing rights to independent distributors as well.

Cable, Satellite Similarities

This is a similar approach to how Congress dealt with cable and satellite music subscription services, a model that Boucher says sets "an excellent precedent" for online music.

Under current copyright law, broadcasters and Webcasters are allowed to maintain only one copy of a transmitted file. This can pose problems in accommodating multiple connection speeds and media formats. The new legislation would allow one copy of music files for each bit rate and each format.

In addition, the bill aims to encourage artists to take advantage of online distribution by giving them the right to collect royalties on Webcast performances directly, rather than funneling them through recording companies.

Another measure calls for the Copyright Office to set up an electronic filing system to speed up the licensing process for online retailers and ensure that funds and licensing information are distributed to the copyright holders.

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