Congress fails to act on copyright bills

Senate takes no action on measure that would have allowed prison sentences for violations

WASHINGTON - The U.S. Congress this week passed a telecommunications bill in the final hours of the 2004 session, but some groups praised lawmakers for failing to act on legislation that would create new penalties for copyright violations.

The Senate approved legislation that allows funding to continue for the E-Rate program, intended to provide money for schools and libraries to hook up to the Internet. Late Wednesday, the Senate approved a telecommunications bill that included authorization for the E-Rate program to continue funding projects, even though E-Rate has been under fire in Congress this year for fraud and abuse within the program.

Among the bills that didn't pass this year is one that would have allowed entertainment companies and artists to sue others that "induce" copyright violations. Another bill that failed to pass would have established prison sentences for some electronic distribution of copyrighted works.

The Senate failed to act on the Cooperative Research and Technology Enhancement (CREATE) Act, a bill passed by the House of Representatives in March. The bill, a combination of other copyright legislation introduced in the House, included prison sentences of three to 10 years for the electronic distribution of copyrighted works worth more than $1,000. The prison sentences could be imposed for willful violations or, in some cases, the distribution of more than 1,000 copies of a copyrighted work.

A spokesman for Representative Lamar Smith, author of the CREATE Act, did not immediately return a phone call seeking comment on Smith's plans for copyright legislation in 2005. Smith is a Texas Republican.

Another copyright bill, the Inducing Infringements of Copyright Act, failed to move out of the Senate Judiciary Committee after Chairman Orrin Hatch, a Utah Republican, couldn't reach a compromise with technology and civil liberties groups that opposed the bill. Critics said the bill, intended to target peer-to-peer (P-to-P) software vendors, was worded so broadly that it would allow the music and movie industries to sue many groups, including venture capitalists who invest in new technologies and journalists who review digital recording products.

In August, a group of companies and organizations, including MCI, SBC Communications and Verizon Communications, offered Hatch a proposal that would have softened the bill. That proposal, advanced by the Home Recording Rights Coalition, would have penalized only those companies that actively distribute computer tools "specifically designed to cause or enable infringement."

But Hatch and critics of the bill weren't able to hammer out an agreement. A spokeswoman for Hatch didn't immediately respond to a request for a comment on the status of similar legislation for 2005.

Public Knowledge, an intellectual property advocacy group, applauded Congress for not acting on the two copyright bills. Congress acted in consumers' interest when it decided not to strengthen copyright penalties, said Gigi Sohn, president of Public Knowledge.

Two sessions of Congress have passed without passage of major copyright legislation, Sohn noted. "It's time for the content industry to move on to a new strategy -- that is, take the technology, build business models, and make a lot of money," she said.

The Recording Industry Association of America (RIAA) said the copyright legislation had "strong bipartisan support."

"At the end of the session, the intellectual property package was caught up in a crossfire about completely unrelated issues," RIAA spokesman Jonathan Lamy wrote in an e-mail. "The substance of it was not the issue."

A change in Federal Communications Commission accounting rules had forced the E-Rate program to stop sending out payments to schools and libraries that had been promised money, according to a spokesman for Senator Conrad Burns, a Montana Republican who pushed the Senate to approve the telecommunications bill that passed Wednesday. The bill, if signed by President George Bush, will restore that funding, said Burns spokesman Grant Toomey.

Burns argued the E-Rate program is important to schools and libraries in rural areas. "There are many areas across the country that are deficient in the available technology," Toomey said. "The nice thing about technology is you can bring those folks up to par. They can have access to the same information as a kid in New York City."

Other groups praised the Senate for passing the telecommunications bill, called the National Telecommunications and Information Administration Organization Act. The bill provides incentives to advance E-911 deployment, and it attempts to improve radio spectrum management as well as to maintain the Universal Service Fund, a pot of money from taxes on carriers that funds E-Rate and other telecommunications services to rural and poor areas.