ASCAP, BMI and the NMPA (through its licensing subsidiary, HFA) represent virtually all American songwriters and music publishers, in licensing all the rights that are necessary for Internet music services to use copyrighted musical works.

(1) At the outset, we unequivocally state our desire to license copyrighted musical works for transmission on the Internet so that consumers may have on-line access to the world's repertory of musical works.

HFA has licensed many Internet music services and, together with the NMPA, recently reached landmark agreements with the RIAA and Napster to license the reproduction and distribution rights in copyrighted musical works for a broad array of internet music subscription services. BMI and ASCAP have licensed and will continue to license any Internet users who request a license for the public performance of musical compositions.

These licensing agreements confirm that the marketplace, while continuing to evolve, will adapt to meet new business models as they emerge. We thus agree, in the strongest terms, with the recent statements made by members of the House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property:

"If there is one thing we know about the Internet music marketplace, it is how little we know.... it is a marketplace without a proven business model. . . ."

"The most appropriate congressional role at this point is to continue to develop our knowledge and monitor marketplace developments."

"We strongly believe it is premature for congress to act on legislation that regulates this quickly evolving marketplace."

"Government regulation can only stifle the tremendous innovation in this market and serve to pick winners and losers, and, in any case, will most likely be obsolete before it is enacted."(2)

It has nevertheless been suggested by others that Congress should intervene now to change the legal framework in which the marketplace is evolving. the Copyright Office, for example, recently issued a report suggesting that congress amend existing law to limit the rights of songwriters and music publishers to be compensated for the use of their copyrighted musical works on the Internet.(3)

A bill has also been introduced that seeks to regulate the still-evolving marketplace for Internet music. we believe strongly that legislative intervention is unwarranted and could impede marketplace solutions. In particular, we wish to respond to the suggestion by the proponents of these changes that certain economic rights expressly granted under the Copyright Act have no value in the digital domain. We appreciate that different uses of different rights may be valued differently in the marketplace. At opposite ends of the spectrum, for example, it can be said that "pure" audio-only downloads should not require payment for the public performing right and that "pure" audio-only Webcasts should not require payment for the mechanical right . (4)

In between those examples, however, both rights may be implicated. How to value those various uses should be left to the marketplace - as it was, with a successful resolution, in the NMPA/HFA-RIAA agreement and in the many ASCAP and BMI license agreements. The recent NMPA/HFA-RIAA agreement proves that marketplace solutions work. The agreement provides a flexible model for immediately licensing reproduction and distribution rights to all subscription services delivering music in a variety of forms, including on-demand streaming and time-limited downloads. Although the agreement does not establish industry-wide rates at this time, it contemplates that different uses of music may have different values in the marketplace. Indeed, NMPA/HFA and RIAA have committed to engage in good faith negotiations to agree on industry-wide mechanical royalty rates for Internet services - and to issue licenses even before such rates are set so as to assure that consumers have access to music now.

So, too, ASCAP and BMI, in licensing the public performing right, have repeatedly expressed their desire for, and willingness to engage in marketplace negotiations for licenses that also reflect the different values of different uses of music on the Internet. Indeed, BMI and ASCAP have already licensed thousands and thousands of Internet music users, covering all their performances. These developments prove that the free marketplace works. It should be allowed to continue to work, without legislative intervention.