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PROMOTING TECHNOLOGY AND EDUCATION:

TURBO-CHARGING THE SCHOOL BUSES ON THE

INFORMATION HIGHWAY

HEARING

BEFORE THE

COMMITTEE ON THE JUDICIARY

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

MARCH 13, 2001

Serial No. J–107–5

Printed for the use of the Committee on the Judiciary

(
(II)

COMMITTEE ON THE JUDICIARY

ORRIN G. HATCH, Utah, Chairman

STROM THURMOND, South Carolina

CHARLES E. GRASSLEY, Iowa

ARLEN SPECTER, Pennsylvania

JON KYL, Arizona

MIKE DEWINE, Ohio

JEFF SESSIONS, Alabama

SAM BROWNBACK, Kansas

MITCH MCCONNELL, Kentucky

PATRICK J. LEAHY, Vermont

EDWARD M. KENNEDY, Massachusetts

JOSEPH R. BIDEN, JR., Delaware

HERBERT KOHL, Wisconsin

DIANNE FEINSTEIN, California

RUSSELL D. FEINGOLD, Wisconsin

CHARLES E. SCHUMER, New York

RICHARD J. DURBIN, Illinois

MARIA CANTWELL, Washington

SHARON PROST, Chief Counsel

MAKAN DELRAHIM, Staff Director

BRUCE COHEN, Minority Chief Counsel and Staff Director
(III)

C O N T E N T S

STATEMENTS OF COMMITTEE MEMBERS

Page

Cantwell, Hon. Maria, a U.S. Senator from the State of Washington ................ 63

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah ............................ 1

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont .................... 3

Kennedy, Hon. Edward M., a U.S. Senator from the State of Massachusetts ... 16

WITNESSES

Adler, Allan R., Vice President for Legal and Governmental Affairs, Association of American Publishers, Washington, DC .................................................. 21

Carpentier, Gary, Adjunct Professor of Law, Washington College of Law,

American University, Washington, DC .............................................................. 35

Heeger, Gerald A., President, University of Maryland University College,

College Park, MD ................................................................................................. 17

LeBlanc, Paul, President, Marlboro College, Marlboro, VT ................................. 32

Peters, Marybeth, Register of Copyrights, Washington, DC ................................ 9

Siddoway, Richard M., Principal, Utah Electronic High School, Salt Lake

City, Utah ............................................................................................................. 30

QUESTIONS AND ANSWERS

Responses of Allan Robert Adler to questions submitted by Senator Leahy ...... 43

Response of Allan Robert Adler to a question from Senator Blanche L. Lincoln

submitted on her behalf by Senator Leahy ........................................................ 50

Responses of Gary Carpentier to questions submitted by Senator Leahy .......... 51

Responses of Gerald A. Heeger to questions submitted by Senator Leahy ........ 53

Responses of Richard M. Siddoway to questions submitted by Senator Leahy .. 56

Responses of Marybeth Peters to questions submitted by Senator Leahy ......... 58

Responses of Gerald A. Heeger to questions submitted by Senator Thurmond . 60

Responses of Marybeth Peters to questions submitted by Senator Thurmond .. 61

(1)

PROMOTING TECHNOLOGY AND EDUCATION:

TURBO-CHARGING THE SCHOOL BUSES ON

THE INFORMATION HIGHWAY

TUESDAY, MARCH 13, 2001

U.S. SENATE,

COMMITTEE ON THE JUDICIARY,

Washington, DC.

The Committee met, pursuant to notice, at 10 a.m., in room SD–

226, Dirksen Senate Office Building, Hon. Orrin G. Hatch, Chairman of the Committee, presiding.

Present: Senators Hatch and Leahy.

OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S.

SENATOR FROM THE STATE OF UTAH

Chairman HATCH. I am pleased to welcome you all to this hearing this morning on S. 487, the Technology Education and Copyright Harmonization Act, or simply the TEACH Act, which I introduced with my distinguished colleague, Senator Leahy.

This legislation updates the education and distance learning provisions of the copyright law for the 21 st century, allowing students

and teachers to benefit from the deployment of advanced digital

transmission technologies like the Internet in education.

Let me thank Marybeth Peters, the Register of Copyrights, and

her staff in the Copyright Office for their hard work in developing

this legislation, as well as the report upon which it is based.

I have a longer statement that I will have inserted in the record,

but in the interest of time I will just make a few short comments.

Distance education and the use of high-technology tools such as

the Internet in education hold great promise for students, especially in States like Utah and Vermont where distances can be

great between students and learning opportunities. I think it is

similarly important for any State that has students who seek

broader learning opportunities than they can reach or obtain in

their own local area.

Any education reforms moved in the Congress this year should

include provisions that help deploy high-technology tools, including

the Internet, to give our students the very best educational experience we can offer. By using these tools, students in remote areas

of my home State of Utah are becoming able to link up to resources

previously available only to those in cities or at prestigious educational institutions.

Limited access to language instructors in remote areas or particle accelerators in most high schools limit access to educational
2

opportunity. These limits can be overcome to a revolutionary degree by online offerings which can combine sound, video, and interactivity in exciting new ways. And new experiences that transcend

what is possible in the classroom, such as hyper-texts linked directly to secondary sources, are possible only in the online world.

I am particularly pleased that we will hear from Mr. Richard

Siddoway, the Principal of the Electronic High School of Utah,

which links high school students all over Utah to the best educational opportunities the State can currently provide.

Promoting the use of advanced technology like the Internet can

wholly transform the educational experience for many students and

create broad access to learning opportunities that have been out of

reach for many until now. S. 487, the TEACH Act, through modest

updating of the Copyright Act, can help bring these opportunities

closer to every student in our States and our Nation.

With that, I will put the rest of my statement in the record and

we will turn to Senator Leahy.

[The opening statement of Chairman Hatch follows:]

OPENING STATEMENT OF HON. ORRIN HATCH, A U.S. SENATOR FROM THE STATE OF

UTAH

I am pleased to welcome you all to this hearing this morning on S. 487, the ‘‘Technology Education And Copyright Harmonization Act’’ or simply the ‘‘TEACH Act,’’ which I introduced with my distinguished colleague, Senator Leahy. This legislation

updates the education and distance learning provisions of the copyright law for the

21’’ century, allowing students and teachers to benefit from deployment of advanced

digital transmission technologies like the Internet in education. Let me thank

Marybeth Peters, the Register of Copyrights, and her staff in the Copyright Office,

for their hard work in developing this legislation, as well as the report upon which

it is based. They have done admirable work in moving forward the deployment of

the Internet and digital transmission systems in education while maintaining safeguards for the protection of the copyrighted works used to enhance the educational

experience.

Distance education, and the use of high technology tools such as the Internet in

education, hold great promise for students in states like Utah. Any education reforms moved in the Congress this year should include provisions that help deploy

high technology tools, including the Internet, to give our students the very best educational experience we can offer. By using these tools, students in remote areas of

my home state of Utah are now able to link up to resources previously only available to those in cities or at prestigious educational institutions. For many Utahns,

this means having access to courses or being able to see virtual demonstrations of

principles that until now they have now only read about. Some language students

in remote areas may not have access to a French or Russian or Japanese teacher,

and high school physics students do not usually have access to particle accelerators.

Other students may not be able to leave their homes for health, disability, or other

reasons. Using digital transmission technology, including the Internet, these students can participate in school and have access to these learning opportunities in

a way that was previously impossible for them. And the promise of distance education extends far beyond the traditional student, making expanded opportunities

available for working parents, senior citizens, and anyone else with a desire to

learn.

True to its heritage, Utah is a pioneer among states in blazing the trail to the

next century, making tomorrow’s virtual classrooms a reality today. Fittingly, since

it is home to one of the original six universities that pioneered the Internet, the

State of Utah and the Utah System of

Higher Education, as well as a number of individual universities in the state have

consistently been recognized as technology and web-education innovators. Such national recognition reflects, in part, Utah’s high-tech industrial base, its learning-oriented population, and the fact that Utah was the first state with a centrally coordinated statewide system for distance learning. As the Copyright Office was preparing

the report that resulted in this legislation, I was pleased to host the Register of

Copyrights, who is here today, at a distance education exposition and copyright

round table that took place at the nerve center of that system—the Utah Education
3

Network—where we saw many exciting technologies being developed and implemented in Utah, by Utahns, to make distance education a reality. At the event in

Salt Lake City, Ms. Peters and I dropped in on a live on-line art history class hosted

in Orem, that included high school and college students scattered from Alpine in

the north to Lake Powell in the south, nearly the entire length of the state. We will

hear more about these efforts today, especially what Utah is doing in distance learning for secondary school students, from the principal of the Electronic High School

of Utah, Mr. Richard Siddoway. We are happy to have him here today to represent

Utah.

The legislation discussed today, through updates to the copyright law, will make

it easier for the teacher who connects with her students online to enhance the learning process by illustrating music appreciation principles with appropriately limited

sound recordings or illustrate visual design or story-telling principles with appropriate movie clips. Or she might create wholly new experiences such as making a

hypertext poem that links significant words or formal elements to commentary,

similar uses in other contexts, or other sources for deeper understanding, all accessible at the click of a mouse. These wholly new interactive educational experiences,

or more traditional ones now made available around the students’ schedule, will be

made more easily and more inexpensively by this legislation. It does this by making

clear a ‘‘safe harbor’’ for educational uses of copyrighted works for which there need

not be negotiations or licensing arrangements. Beyond the legislative safe harbor

provided by this legislation, opportunities for students and lifetime learners of all

kinds, in all kinds of locations, is limited only by the human imagination and the

cooperative creativity of the creators and users of copyrighted works. I hope that

creative licensing arrangements will be spurred to make even more exciting opportunities available to students and lifelong learners, and that incentives to create

those experiences will continue to encourage innovation in education, art and entertainment online. The possibilities for everyone in the wired world are thrilling to

contemplate.

STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR

FROM THE STATE OF VERMONT

Senator LEAHY. Thank you, Mr. Chairman, and I am very happy

to be here with you as a cosponsor of the TEACH Act.

Later this morning, as I do once a week, I will be doing an online

chat with a school in Vermont. Usually, it is at a grade school level.

It has done two things. One, I have improved my ability to type.

I type a lot faster with many fewer mistakes because if I make the

mistakes, they quickly point them out.

But I become more and more encouraged when I hear some of

the questions being asked by the youngsters in Vermont. I encourage the national media to just look at some of those transcripts and

see some of the really good questions the kids ask and the answers

they give when I ask them questions. It is encouraging. Paul

LeBlanc is here, and knows first-hand about Vermont students. I

have talked before about the advantage of these online chats.

When you think, Senator Hatch, of the kinds of things we have

done to upgrade our copyright, patent and trademark laws, at the

same time protecting the important interests of users of the creative work, so much of that has helped the vibrant economy of this

Nation.

We know that education is a critical component of this information age, and if we don’t have adequate information, we are not

going to be able to harness the technological tools that we have. I

think how wonderful it is going to a little school in what we call

Grand Isle County at home. This is an archipelago of little islands

in the middle of Lake Champlain, one of the most beautiful spots

on Earth.

I recall being in one of the schools wearing a mike with a camera

on me. All these schools are held together by a screen on the wall
4

and as you move around the class, the camera would automatically

follow the mike. After a few minutes of it, you actually think you

are talking back and forth with a student in the class, but they are

separated by a bridge or a ferry boat ride away from where you

are.

As part of the Digital Millennium Copyright Act, DMCA, Senator

Hatch and I had asked the Copyright Office to study the complex

copyright issues involved in distance education. We are fortunate

that Marybeth Peters, who sometimes probably feels she lives in

this Committee room because we are always calling on her for help,

is here. She is the Register of Copyrights and she met with many

interested people, including Vermonters, to hear their concerns on

this issue. Vermonters are concerned, which is one of the reasons

why Paul LeBlanc, the President of Marlboro College, is here.

In the copyright office report, which was released in May 1999—

and I would urge people to read it—valuable suggestions were

made on how we could make some modest changes in our copyright

law and go a long way to foster the appropriate use of copyrighted

works in valid distance learning activities. What Senator Hatch

and I have introduced incorporates those recommendations so that

you can extend face-to-face classroom instruction over the Internet.

In rural areas, it is so important. If we are going to do away with

the digital divide, we have got to have these rural areas connected.

I graduated in a high school class of 29. I did have an uncle of

mine who told me that, coming from a small town and a small class

like that, I would never amount to anything.

Chairman HATCH. Was that in 1929?

Senator LEAHY. Yes, it was, long before you were born, Mr.

Chairman.

[Laughter.]

Senator LEAHY. The chairman, although he has more hair, is actually older than I am.

I did ask my uncle recently what he thought now. It speaks to

his politics. He says nothing has changed his mind and he still

feels I haven’t amounted to anything

The Vermont Telecommunications Plan identified distance learning as being critical to Vermont’s development, but that same plan

could have been written in rural Utah or rural California or Texas.

It is crucial for these States to be competitive. We use the Vermont

Interactive Television Network, a two-way videoconferencing system in communities, schools, and businesses. I use it all the time

up there, and I am proud that I helped start the system by getting

funding. The people who understand it a lot better than I ever will

are the ones who make it work.

The Copyright Office said that the computer is the most versatile

of distance education instruments, both for the material it can display and the flexibility of it. These are things that we have to look

at. The Web-Based Education Commission, headed by former Senator Bob Kerrey, said ‘‘Current copyright law governing distance

education . . . was based on broadcast models of telecourses for distance education. That law was not established with the virtual

classroom in mind.’’ It said the copyright laws were inappropriately

restrictive.
5

Now, with the Copyright Office’s own conclusions and what Senator Hatch and I are trying to do, I think we can change that. We

made efforts in the bill to address the valid concerns of both the

copyright owners and the education and library community, and I

think we can work together and have something better.

In the end, we can all benefit by this. We should ask ourselves,

if we don’t use all these tools in every single part of our country,

because none of us know where the geniuses of tomorrow are—if

we don’t use all these tools, what kind of an economic world will

our children and our grandchildren have? If we do use them all,

look at the unbelievable things that are available, things that even

a generation ago nobody could have imagined.

So thank you, Mr. Chairman, and I will put my whole statement

in the record.

[The opening statement of Senator Leahy follows:]

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE STATE

OF VERMONT

An important responsibility of the Senate Judiciary Committee is fulfilling the

mandate set forth in Article 1, section 8 of the Constitution, ‘‘to promote the

progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.’’ Chairman

Hatch and I, and other colleagues on the Judiciary Committee, have worked together successfully over the years to update and make necessary adjustments to our

copyright, patent and trademark laws to carry out this responsibility. We have

strived to do so in a manner that advances the rights of intellectual property owners

while protecting the important interests of users of the creative works that make

our culture a vibrant force in this global economy.

Several years ago, as part of the Digital Millennium Copyright Act (DMCA), we

asked the Copyright Office to perform a study of the complex copyright issues involved in distance education and to make recommendations to us for any legislative

changes. In conducting that study, Marybeth Peters, the Registrar of Copyrights

met informally with interested Vermonters in Burlington, Vermont, to hear their

concerns on this issue. Today, I welcome Paul LeBlanc, the President of Marlboro

College in Vermont, and the other witnesses, who can tell us about the needs of educators using distance education in innovative ways.

The Copyright Office released its report in May, 1999, at a hearing held in this

Committee, and made valuable suggestions on how modest changes in our copyright

law could go a long way to foster the appropriate use of copyrighted works in valid

distance learning activities. Senator Hatch and I have introduced the TEACH Act,

S. 487, that incorporates the legislative recommendations of that report. This legislation will help clarify the law and allow educators to use the same rich material

in distance learning over the Internet that they are able to use in face-to-face classroom instruction.

The growth of distance learning is exploding, in part because it is responsive to

the needs of older, non-traditional students. According to the Copyright Office report, the typical average distance learning student is 34 years old, employed fulltime and has previous college credit. More than half are women. These are the people with busy schedules who need the flexibility that on-line programs offer: virtual

classrooms accessible when the student is ready—and free to log-on. Moreover, in

rural areas, distance education provides an opportunity for schools to offer courses

that their students might otherwise not be able enjoy. In increasing numbers, students in other countries are benefitting from educational opportunities here through

U.S. distance education programs.

In Vermont and many other rural states, distance learning is a critical component

of any quality educational and economic development system. In fact, the most recent Vermont Telecommunications Plan, which was published in 1999 and is updated at regular intervals, identifies distance learning as being critical to Vermont’s

development. It also recommends that Vermont consider ‘‘using its purchasing

power to accelerate the introduction of new [distance learning] services in Vermont.’’

Technology has empowered individuals in the most remote communities to have access to the knowledge and skills necessary to improve their education and ensure

they are competitive for jobs in the 21st Century.
6

Several years ago, I was proud to work with our state in establishing the Vermont

Interactive Television network. This constant two-way video-conferencing system

can reach communities, schools and businesses in every corner of the state. Since

we first successfully secured funds to build the backbone of the system, Vermont

has constructed fourteen sites. The VIT system is currently running at full capacity

and has demonstrated that in Vermont, we value technology highways just as we

value our transportation highways.

No one single technology should be the platform for distance learning. In Vermont, creative uses of available resources have put in place a distance learning system that employs T–1 lines in some areas and traditional internet modem hook-ups

in others. Several years ago, the Grand Isle Supervisory Union received a grant

from the U.S. Department of Agriculture to link all the schools within the district

with fiber optic cable. There are not a lot of students in this Supervisory Union but

there is a lot of land separating one school from another. The bandwidth created

by the fiber optic cables has not only improved the educational opportunities in the

four Grand Isle towns, but it has also provided a vital economic boost to the area’s

businesses.

While there are wonderful examples of the use of distance learning inside Vermont, the opportunities provided by these technologies are not limited to the borders

of one state, or even one country. Champlain College, a small school in Burlington,

Vermont, has shown this is true when it adopted a strategic plan to provide distance

learning for students throughout the world and now has more students enrolled

than any other college in Vermont. The campus in Vermont has not been overwhelmed with the increase. Instead, Champlain now teaches a large number of students overseas through its on-line curriculum. Similarly, Marlboro College in Marlboro, Vermont, offers innovative graduate programs designed for working professionals with classes that meet not only in person but also online.

The Internet, with its interactive, multi-media capabilities, has been a significant

development for distance learning. By contrast to the traditional, passive approach

of distance learning where a student located remotely from a classroom was able

to watch a lecture being broadcast at a fixed time over the air, distance learners

today can participate in real-time class discussions, or in simultaneous multimedia

projects. The Copyright Office report confirms what I have assumed for some time—

that ‘‘the computer is the most versatile of distance education instruments,’’ not just

in terms of flexible schedules, but also in terms of the material available.

More than 20 years ago, the Congress recognized the potential of broadcast and

cable technology to supplement classroom teaching, and to bring the classroom to

those who, because of their disabilities or other special circumstances, are unable

to attend classes. At the same time, Congress also recognized the potential for unauthorized transmissions of works to harm the markets for educational uses of copyrighted materials. The present Copyright Act strikes a careful balance and includes

two narrowly crafted exemptions for distance learning, in addition to the general

fair use exemption.

Under current law, the performance or display of any work in the course of faceto-face instruction in a classroom is exempt from the exclusive rights of a copyright

owner. In addition, the copyright law allows transmissions of certain performances

or displays of copyrighted works to be sent to a classroom or a similar place which

is normally devoted to instruction, to persons whose disabilities or other special circumstances prevent classroom attendance, or to government employees. While this

exemption is technology neutral and does not limit authorized ‘‘transmissions’’ to

distance learning broadcasts, the exemption does not authorize the reproduction or

distribution of copyrighted works—a limitation that has enormous implications for

transmissions over computer networks. Digital transmissions over computer networks involve multiple acts of reproduction as a data packet is moved from one computer to another.

The need to update our copyright law to address new developments in online distance learning was highlighted in the December, 2000, report of the Web-Based

Education Commission, headed by former Senator Bob Kerrey. This Commission

noted that:

Current copyright law governing distance education . . . was based on broadcast

models of telecourses for distance education. That law was not established

with the virtual classroom in mind, nor does it resolve emerging issues of

multimedia online, or provide a framework for permitting digital transmissions.’’ (p. 95).

This report further observed that ‘‘This current state of affairs is confusing and

frustrating for educators. . . . Concern about inadvertent copyright infringement

appears, in many school districts, to limit the effective use of the Internet as an edu-
7

cational tool.’’ (pp. 95–96). In conclusion, the report concluded that our copyright

laws were ‘‘inappropriately restrictive.’’ (p. 97).

The TEACH Act makes three significant expansions in the distance learning exemption in our copyright law, while minimizing the additional risks to copyright

owners that are inherent in exploiting works in a digital format. First, the bill eliminates the current eligibility requirements for the distance learning exemption that

the instruction occur in a physical classroom or that special circumstances prevent

the attendance of students in the classroom.

Second, the bill clarifies that the distance learning exemption covers the temporary copies necessarily made in networked servers in the course of transmitting

material over the Internet.

Third, the current distance learning exemption only permits the transmission of

the performance of ‘‘non-dramatic literary or musical works,’’ but does not allow the

transmission of movies or videotapes, or the performance of plays. The Kerrey Commission report cited this limitation as an obstacle to distance learning in current

copyright law and noted the following examples: A music instructor may play songs

and other pieces of music in a classroom, but must seek permission from copyright

holders in order to incorporate these works into an online version of the same class.

A children’s literature instructor may routinely display illustrations from childrens’ books in the classroom, but must get licenses for each one for on online version of

the course.

To alleviate this disparity, the TEACH Act would amend current law to allow educators to show limited portions of dramatic literary and musical works, audiovisual

works, and sound recordings, in addition to the complete versions of nondramatic

literary and musical works which are currently exempted.

This legislation is a balanced proposal that expands the educational use exemption in the copyright law for distance learning, but it also contains a number of safeguards for copyright owners. In particular, the bill excludes from the exemption

those works that are produced primarily for instructional use, because for such

works, unlike entertainment products or materials of a general educational nature,

the exemption could significantly cut into primary markets, impairing incentives to

create. Indeed, the Web-Based Education Commission urged the development of

‘‘high quality online educational content that meets the highest standards of educational excellence.’’ Copyright protection can help provide the incentive for the development of such content.

In addition, the bill requires the use by distance educators of technological safeguards to ensure that the dissemination of material covered under the exemption

is limited only to the students who are intended to receive it.

Finally, the TEACH Act directs the Copyright Office to conduct a study on the

status of licensing for private and public school digital distance education programs

and the use of copyrighted works in such programs, and to convene a conference

to develop guidelines for the use of copyrighted works for digital distance education

under the fair use doctrine and the educational use exemptions in the copyright law.

Both the Copyright Office report and the Kerrey Commission noted dissatisfaction

with the licensing process for digital copyrighted works. According to the Copyright

Office, many educational institutions ‘‘describe having experienced recurrent problems [that] . . . can be broken down into three categories: difficulty locating the

copyright owner; inability to obtain a timely response; and unreasonable prices or

other terms.’’ Similarly, the Kerrey Commission report echoed the same concern. A

study focusing on these licensing issues will hopefully prove fruitful and constructive for both publishers and educational institutions.

The Kerrey Commission report observed that ‘‘[c]oncern about inadvertent copyright infringement appears, in many school districts, to limit the effective use of the

Internet as an educational tool.’’ For this reason, the Kerrey Commission report endorsed ‘‘the U.S. Copyright Office proposal to convene education representatives and

publisher stakeholders in order to build greater consensus and understanding of the

‘fair use’ doctrine and its application in web-based education. The goal should be

agreement on guidelines for the appropriate digital use of information and consensus on the licensing of content not covered by the fair use doctrine.’’ The TEACH

Act will provide the impetus for this process to begin.

I appreciate that, generally speaking; copyright owners believe that current copyright laws are adequate to enable and foster legitimate distance learning activities.

As the Copyright Office report noted, copyright owners are concerned that ‘‘broadening the exemption would result in the loss of opportunities to license works for use

in digital distance education’’ and would increase the ‘‘risk of unauthorized downstream uses of their works posed by digital technology.’’ Based upon its review of

distance learning, however, the Copyright Office concluded that updating section

110(2) in the manner proposed in the TEACH Act is ‘‘advisable.’’ I agree. At the
8

same time we have made efforts to address the valid concerns of both the copyright

owners and the educational and library community, and I look forward to working

with all interested stakeholders as this legislation is considered by the Judiciary

Committee and the Congress.

Distance education is an important issue to both the Chairman and to me, and

to the people of our States. I look forward to hearing the testimony of all the witnesses.

Chairman HATCH. Well, thank you, Senator Leahy.

We have a distinguished panel today to discuss distance learning

on the Internet and our copyright reforms to encourage its further

deployment.

First, we will hear from Ms. Marybeth Peters, the Register of

Copyrights. She and her Copyright Office staff have done yeoman’s

service on this issue, writing a comprehensive report on the issue

and making a major contribution in the drafting of this legislation.

It is fair to say that no one knows more about the copyright

issues surrounding digital distance learning than Ms. Peters, and

we thank her for her expertise and support. Normally, we would

have her on her own panel, but because of scheduling difficulties

that pressed us on time in this hearing, she has graciously agreed

to join in a large panel to expedite the process this morning. So we

want to thank you again for your consideration, Madam Register.

Next, we will hear from Gerald A. Heeger, President of the University of Maryland University College. In addition to his academic

and administrative experience, Mr. Heeger has been involved in developing distance education offerings for a number of years.

While at New York University, he created NYU Online, and has

worked at the University of Maryland to broaden educational opportunities across the State and throughout the world through expanded online offerings. Then we will hear from Allan Adler, the

Vice President for Legal and Governmental Affairs for the Association of American Publishers. Mr. Adler has long been involved in

copyright policy debates here in Washington, and we certainly welcome your perspective here today.

Following Mr. Adler, we will be pleased to hear from Richard M.

Siddoway. Mr. Siddoway is the Principal of the Electronic High

School in Utah, which connects high school students throughout

Utah to educational opportunities that they may not have had before. He has been a professional educator for nearly 40 years and

he is a New York Times bestselling author with his book The

Christmas Wish, so he brings insights from various vantage points

to this discussion. He has long worked on public policy issues involving technology and education, and we are certainly honored to

have you here today, Mr. Siddoway, to inform our process.

Next, we will hear from Paul LeBlanc, who is the President of

Marlboro College, in Marlboro, Vermont. Having founded an e-commerce program and a teaching with Internet technologies Master’s

Degree, Mr. LeBlanc has long sought to connect education and new

technology as a tool for improving communication and knowledgesharing in both the classroom and board room. So we are very

pleased to have you with us here today.

Finally, we will hear from Gary Carpentier, who teaches in the

LL.M. program in international legal studies at the Washington

College of Law at American University, and is creating an Internet-based law course on NAFTA together with three other univer-
9

sities in Canada, three in Mexico, and two other universities in the

United States, to be transmitted to students in each of those countries.

So we both look forward to hearing the statements of each of our

distinguished witnesses. We will turn first to you, Ms. Peters.

STATEMENT OF MARYBETH PETERS, REGISTER OF

COPYRIGHTS, WASHINGTON, D.C.

Ms. PETERS. Thank you. Mr. Chairman, Mr. Leahy, I am pleased

to be here today to testify on S. 487, the Technology Education and

Copyright Harmonization Act of 2001.

Mr. Chairman, I congratulate you and Senator Leahy for introducing this important bill which will update sections 110(2) and

112 of the Copyright Act to cover certain instructional activities

taking place through the use of digital technologies.

Digital distance education is a rapidly growing field, but one that

is still in its infancy. Part of our challenge in making recommendations to you was to remove technologically obsolete legal provisions

which are an impediment to the policy balance struck by Congress

in 1976 without destroying a growing and important market for

copyright owners. Licensing of copyrighted works in this market is

extremely important. However, fair use and other exemptions also

play a role.

S. 487 incorporates our recommendations, modified in certain instances to accommodate concerns expressed by representatives of

the affected communities. You, Senator Hatch, in your floor statement invited suggestions to improve the bill, and during the past

2 weeks we met with representatives of the education and content

communities to hear some of their concerns. We have addressed a

number of these concerns in our testimony.

In my oral testimony, I will only focus on a few issues. First, the

TEACH Act removes the requirement of a physical classroom by

permitting transmissions to be made to students officially enrolled

in a course wherever they may be. However, the bill retains the

current limitation that the performance or display be directly related and of material assistance to the teaching content of the transmission.

Thus, the critical elements are that the performance or display

still must be carried out by a non-profit educational institution.

Two, it still must be part of the institution’s systematic instructional activity. And, three, with the amendment, the transmission

must be by or at the direction of an instructor as an integral part

of the class session. The result is that you have expanded section

110(2) narrowly in order to avoid changing the central character of

that section.

As it currently stands, section 110 focuses on performances and

displays. It should not become an exemption that focuses on the delivery of copies to substitute for the purchase by students of materials that are being performed or displayed. So let me emphasize

the exemption is limited to what is called by some mediated instruction. The intent is to ensure that the performance or display

is analogous to the type of performance or display that would take

place in a live classroom. This means that the display of an entire

textbook would not be exempted.
10

Another important element is the safeguards imposed as conditions on the applicability of the exemption. These include permitting the retention of transient copies only to the extent necessary

to accomplish the transmission, requiring the adoption by the educational institution of copyright policies, the provision to faculty

and to students and to affected staff of informational materials to

describe and promote compliance with copyright laws, and, most

important, the requirement to use technological measures to reasonably protect both unauthorized access and unauthorized dissemination of copyrighted works.

With respect to who is eligible for this exemption, the bill continues the limit to non-profit educational institutions. Clearly, this

comports with what is in the current copyright law today in both

sections 110(2) and 110(1). However, during our study, we noted

that there was much support for either a different criterion or an

additional one; for example, accreditation of the institution. This

issue deserves further attention, given the nature of the Internet.

The exemption should apply only to bona fide systematic instructional activities.

Perhaps the most controversial part of the legislation is expanding the categories of works that may be performed. This is a

change in the policy balance that was truck in 1976. For pedagogical reasons, we support the addition of dramatic works, audiovisual works, and sound recordings. Clearly, these works are primarily intended to be performed and inclusion of them could affect

their markets. Therefore, it is appropriate to limit their use to limited and reasonable portions.

Thank you. I would be pleased to answer any questions you have,

and I look forward to working with you and members of your staffs

in any way that would be useful to you as you move forward in this

process.

Thank you.

[The prepared statement of Ms. Peters follows:]

PREPARED STATEMENT OF MARYBETH PETERS, REGISTER OF COPYRIGHTS

The Copyright Office is pleased to present its views on S. 487, the Technology,

Education and Copyright Harmonization (‘‘TEACH ’’) Act. This important legislation

updates sections 110(2) and 112 of the Copyright Act to allow the same activities

to take place using digital delivery mechanisms that were permitted under the policy balance that was struck by Congress when the law was enacted in 1976, while

introducing safeguards to minimize the additional risks to copyright owners that are

inherent in exploiting works in a digital format.

BACKGROUND

Section 403 of the DMCA directed the Copyright Office to consult with affected

parties and, within six months of the date of enactment, make recommendations to

Congress on how to promote distance education through digital technologies. The

Office was specifically directed to consider the following issues: the need for a new

exemption, the categories of works to be included in any exemption, appropriate

quantitative limitations on the portions of works that may be used under any exemption, which parties should be eligible for any exemption, which parties should

be eligible recipients of distance education material under any exemption, the extent

to which use of technological protection measures should be mandated as a condition

of eligibility for any exemption, the extent to which the availability of licenses

should be considered in assessing eligibility for any exemption and other issues as

appropriate.

At the conclusion of an intensive process of identifying stakeholders, holding public hearings, soliciting comments, conducting research, and consulting with experts
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in various fields, the Office issued a Report on Copyright and Digital Distance Education in May, 1999 recommending changes to the existing exemption for distance

education, section 110(2). More recently, the Copyright Office has consulted informally with representatives of the educator and content communities to hear their

respective concerns regarding the Office’s legislative recommendations.

In preparing our Report we found that digital distance education was a field that

was undergoing rapid—even explosive—growth, but one that was still in its infancy.

Technological change had made it possible for educators to reach a vastly broader

student population with a richer variety of course materials than was ever possible

before the advent of the Internet. At the same time, the same technological changes

created a huge potential market for creators and publishers to license their works

for use in distance education.

Part of the challenge for this Office in formulating recommendations addressing

digital distance education was to remove technologically obsolete legal provisions as

an impediment to carrying forward the distance education activities sanctioned by

Congress in 1976 into the twenty-first century, without killing a nascent and potentially important market for right holders. We concluded that this could best be accomplished by using the policy line drawn by Congress in 1976 as the point of reference for a technological updating of section 110(2) that would take account of the

nature and capabilities of digital networks.

At the same time, the Copyright Office was mindful of the risks that are inherent

in the exploitation of copyrighted works in digital form. We concluded that additional safeguards were necessary to minimize the risk to right holders that legitimate use of works under an expanded and updated distance education exemption

could result in copyright piracy.

S. 487 incorporates many of the recommendations that we made in our 1999 Report, modified in certain instances to accommodate concerns expressed by representatives of the affected communities. The remainder of this testimony focuses on how

the bill would change current law in implementing the recommendations from our

Report. Where appropriate, we indicate potential concerns with the language of the

bill that may require further consideration.

EXISTING LAW

Three exemptions together largely define the scope of permitted uses for instructional activities: two specific instructional exemptions in section 110, and the fair

use doctrine of section 107. Sections 110(1) and (2) together were intended to cover

all of the methods by which performances or displays in the course of systematic

instruction take place. Section 110(1) exempts the performance or display of any

work in the course of face-to-face teaching activities. Section 110(2) covers the forms

of distance education existing when the statute was enacted in 1976, exempting certain performances or displays in the course of a transmission—i.e., an instructional

television or radio broadcast. Both subsections contain a number of limitations and

restrictions. In particular, the section 110(2) exemption from the performance right

(as distinguished from the exemption from the display right) applies only to nondramatic literary and musical works. Section 110(2) also contains limitations on the nature and content of the transmission, and the identity and location of the recipients.

The performance or display must be made as a regular part of systematic instructional activity by a nonprofit educational institution or governmental body; it must

be directly related and of material assistance to the teaching content; and it must

be made primarily for reception in classrooms or places of instruction, or to persons

whose disabilities or other special circumstances prevent their attendance in classrooms, or to government employees.

In addition, although the term ‘‘transmission’’ as used in section 110(2) is not limited to analog technology, and would therefore include digital transmissions, the

provision would only permit digital transmissions to the extent that they do not implicate exclusive rights other than the public performance and public display rights.

Since the reality of digital technology is that most digital transmissions entail reproduction and distribution (as those terms are defined in the copyright law and interpreted by the courts), the practical outcome is that most digital transmissions are

not exempted under section 110(2).
12

ANALYSIS OF THE BILL

SECTION 2. EXEMPTION OF CERTAIN PERFORMANCES AND DISPLAYS FOR EDUCATIONAL

USES

SCOPE OF THE EXEMPTION

Section 2 of the bill amends the chapeau paragraph of 17 U.S.C. 110(2), altering

the scope of the exemption by expanding both the rights and the categories of works

that are covered.

Unlike the analog transmissions contemplated in the current law, digital transmissions implicate the reproduction and distribution rights in addition to the public

performance and public display rights. The making of temporary reproductions is

an integral part of the technology of transmitting digital data from one point to another. It is settled case law in the U.S. that such temporary reproductions implicate

the reproduction right. Similarly, courts have held that such activity can be deemed

a distribution as well. In order to address these technological realities, the bill

amends section 110(2) to cover the rights to reproduce a work ‘‘in transient copies

or phonorecords created as a part of the automatic technical process of a digital

transmission’’ permitted under section 110(2), and to distribute ‘‘such copies or

phonorecords’’ in the course of a digital transmission authorized by section 110(2),

‘‘to the extent technologically necessary to transmit the performance or display.’’

The expansion of the 110(2) exemption to cover these two additional rights is

phrased very narrowly in order to avoid changing the central character of section

110 from an ‘‘exemption of certain performances and displays’’ to an exemption permitting the delivery of copies or phonorecords that substitute for the purchase by

the student of the materials performed or displayed. As amended, section 110(2)

would permit reproduction and distribution only to the extent technologically required in order to transmit the performance or display permitted by the exemption.

In our informal consultations with the educator community, concern was expressed that the exemptions from the reproduction and distribution rights were too

limited for an institution to be able to carry out a permitted transmission without

potential liability. As the originator of the transmission, an institution could potentially be liable for any reproduction that occurs along the transmission path from

the institution’s server to the student’s personal computer. Although many of the

copies would fall within the scope of the proposed exemption, it is inevitable that

some copies, such as cache copies in an Internet service-provider’s proxy cache or

a user’s browser cache, would be made, but would not be considered ‘‘transient,’’

would not be ‘‘technologically necessary to transmit the performance or display’’ and

would not, as required in proposed section 110(2)(D), be ‘‘retained for no longer than

reasonably necessary to complete the transmission.’’ Apart from initiating the transmission, the institution has no role in the making and retention of such copies, and

is powerless to prevent them. The copies are simply a byproduct of how the technology works today. But they do not fall within the scope of the exemption provided

in the bill, and they could result in potential liability for the institution.

These concerns appear to be valid, and merit further consideration. We would be

pleased to continue to work with the Committee and the affected parties to craft

language to address these concerns.

Content owners have expressed concern about the existing exemption from the

public display right as applied to digital distance education. Specifically, they are

concerned that permitting the display of entire literary works in the context of digital distance education has a much greater impact on copyright holders than permitting the display of entire works for purposes of instructional broadcasting. ‘‘Display’’

of a book using the technology of distance education in 1976 meant showing it—

holding it up for the camera to see. Display of a book using today’s technology

means making the entire work available digitally. The technology of 1976 did not

make it possible for the display of a textbook to substitute for its purchase, but the

technology of 2001 does.

The exemption from the copyright owner’s exclusive right to display the work publicly would permit both activities. The Copyright Act defines ‘‘display’’ of a work as

showing a copy of a work either directly or by means of ‘‘any other device or process.’’ To display a work ‘‘publicly’’ is to display ‘‘to the public, by means of any device

or process, whether the members of the public capable of receiving the performance

or display receive it in the same place or in separate places and at the same time

or at different times.’’ Holding a book up to a camera or using an e-book through

an online delivery system both fall comfortably within these definitions.

Nevertheless, in the view of the content community, Congress, in exempting entire works from the display right in 1976, did not intend to permit uses that were
13

more extensive than those that were possible under the technology of the time. Congress certainly did not intend that an exempted display of a textbook under section

110(2) be capable of substituting for the purchase of that book, as today’s technology

makes possible.

We believe that these observations of the content community are essentially correct, but it is our view that their concerns are addressed by the limitation of permitted displays in amended section 110(2)(A) to those made ‘‘as an integral part of

a class session.’’ Even though ‘‘class session’’ arguably has less strictly defined parameters in a digital network environment than it does in other contexts, the Copyright Office does not view the concept as being entirely devoid of meaning. For example, the display of an entire textbook could not take place in the course of a class

session and would not be exempted conduct under the scope of an updated section

110(2). The technology of 1976 made it impossible for the display of a textbook to

substitute for its purchase. Although today’s digital technology would make it possible to display an entire book, the limitation that was once inherent in the technology is carried forward through the concept of a class session.

The other expansion of the scope of the exemption accomplished by the bill is to

allow performances of categories of copyrighted works other than the nondramatic

literary and musical works that already may be performed under current law. This

provision implements a recommendation in our Report that recognized that educators preparing course material do not differentiate in the selection of subject matter based upon the categories of works in section 102 of the Copyright Act, and that

current technology permits educators to recreate through distance education the

same rich pedagogical experience enjoyed face-to-face with students in a classroom

setting. Section 110(1) of the Act permits the use of any work in a face-to-face classroom setting.

However, as our Report also recognized, the potential impact on secondary markets for the principal categories of works that are affected by this expansion—audiovisual works, sound recordings, and dramatic literary and musical works—could be

substantial. Transmission of entertainment products like motion pictures and sound

recordings could well substitute for students paying to enjoy them elsewhere. The

bill addresses this concern by limiting performance of the newly-added categories of

works to ‘‘reasonable and limited portions.’’

It should be noted that when the current 110(2) exemption was enacted in 1976,

there was no public performance right that covered sound recordings (a limited public performance right for sound recordings which covers only certain digital transmissions was enacted in 1995). Consequently, there was no need to address the appropriate treatment of sound recordings in the discussions leading to the enactment

of the current section 110(2) exemption. The Copyright Office, however, regards

sound recordings to be as vulnerable to the risks of downstream digital distribution

as audiovisual works, which militates against permitting anything but ‘‘reasonable

and limited’’ portions of those works to be used under the exemption.

Works that are produced primarily for instructional use may be neither performed

nor displayed under the exemption, because for such works, unlike entertainment

products or materials of a general educational nature, an exemption would cut significantly into primary markets, impairing incentives to create. Including such

works within the exemption would interfere with the efficient functioning of the

marketplace for licenses. As we stated in our Report, we believe that under current

conditions, works created primarily for instructional uses will be licensed efficiently

in the educational market.

As an additional safeguard, this provision requires that the exempted performance or display be made from a copy both lawfully made and lawfully acquired.

CRITERIA FOR ELIGIBILITY

Section 110(2) currently contains several criteria which must be met for a performance or display to qualify for the exemption. These criteria relate to the identity

of the transmitting institution and the nature of the activities of which the performance or display is a part; the nature of the performance or display; and the identity

and location of the recipients of the transmission. Section 2 of the bill amends the

existing criteria to update them and make them relevant to distance education as

it is carried out on digital networks. The bill also adds additional criteria as additional safeguards against digital piracy.

Except in fairly limited circumstances, transmissions under the current provision

must be made to students in a physical classroom. The bill eliminates the requirement of a physical classroom by permitting transmissions to be made to students

officially enrolled in the course and to government employees, regardless of their

physical location. The bill retains the current limitation in section 110(2)(B) that the
14

performance or display be ‘‘directly related and of material assistance to the teaching content of the transmission’’ and, in lieu of limiting transmissions to a physical

classroom, adds two additional safeguards.

First, section 110(2)(A), as amended by the bill, emphasizes the concept of mediated instruction by mandating that the exempted performance or display be analogous to the type of performance or display that would take place in a live classroom

setting. The performance or display must still be carried out by a government body

or nonprofit educational institution, and must still be a regular part of the institution’s systematic instructional activities. In addition, the bill requires that the transmission be made ‘‘by or at the direction of an instructor as an integral part of a

class session.’’ In sum, the work must be used as an integral part of a classroom

experience (albeit a virtual one), controlled by the instructor, rather than as supplemental or background information to be experienced independently.

Content owners have expressed to the Copyright Office their concern that ‘‘non- profit educational institution’’ may not be the appropriate dividing line between institutions that may and may not use the exemption, since institutions that are not

bona fide educational institutions may enjoy nonprofit status. They have proposed

that the word ‘‘accredited’’ be added as an additional qualification. The Office views

this as a valid concern. We are uncertain, however, whether lack of accreditation

is necessarily an appropriate basis for denying an institution the benefit of the exemption, or, conversely, whether accreditation is an appropriate basis for granting

an institution the benefit of the exemption. This is especially true given the lack

of uniform national standards for accreditation, and the resulting geographic inequity of such a condition. However, the Committee should consider whether another criterion, in addition to an institution’s nonprofit status, could be used to limit

the benefit of the exemption to bona fide educational institutions.

The second safeguard introduced in lieu of limiting transmissions to a physical

classroom is found in section 110(2)(C), as amended by the bill. This provision adds

the requirement that the transmission must be made solely for, and, to the extent

technologically feasible the reception of the transmission must be limited to, two defined classes of eligible recipients: students officially enrolled in the course for which

the transmission is made; and officers or employees of governmental bodies as part

of their official duties of employment. When we prepared our Report there was widespread agreement, in the testimony and comments submitted to the Office, that the

exemption should benefit only students officially enrolled in the particular course

for which the transmission is made. The bill requires, to the extent technologically

feasible, that technical measures be employed to ensure this.

Section 2 of the bill also adds new safeguards to counteract the new risks posed

by the transmission of works to students in digital form. A new paragraph (D) requires that transient copies permitted under the exemption be retained no longer

than reasonably necessary to complete the transmission. As discussed above in reference to the chapeau paragraph of section 110(2), concerns have been expressed to

the Office regarding the possible retention of copies that are created automatically

in the course of the transmission and are outside the control of the transmitting institution ‘‘for longer than reasonably necessary to complete the transmission.’’ Further consideration should be given to this criterion to ensure that copies made and

retained as an automatic by-product of the transmission process do not render a

transmission ineligible for the exemption.

Paragraph (E)(i) requires that beneficiaries of the exemption institute policies regarding copyright; provide information materials to faculty, students, and relevant

staff members that accurately describe and promote compliance with copyright law;

and provide notice to students that materials may be subject to copyright protection.

These requirements would promote an environment of compliance with the law, ensure that participants in the instructional process were aware of their responsibilities in using copyrighted material, and prevent unintentional and uninformed acts

of infringement.

Paragraph (E)(ii) requires that the transmitting institution apply measures ‘‘that

reasonably prevent unauthorized access to and dissemination of the work,’’ and that

the institution ‘‘not intentionally interfere with technological measures used by the

copyright owner to protect the work.’’ These requirements reflect the central role

that the use of technological measures plays in the balance that has been struck

in this bill.

A number of concerns have been expressed to the Copyright Office regarding this

provision. The educator community has pointed out that requiring institutions to

apply measures that reasonably prevent access to a work essentially repeats the requirement that the transmission be ‘‘made solely for, and to the extent technologically feasible, the reception of such transmission [be] limited to’’ the intended recipients. This may be a valid concern that should be given further consideration.
15

Content owners, for their part, have expressed concern about the use of the word ‘‘intentionally’’ in the context of interfering with technological measures used by the

copyright owner. Subjective intent is difficult to prove, and could render the requirement of noninterference meaningless. This appears to be a valid concern that merits

further consideration. Specifically, the Committee may wish to consider substituting

an objective standard for the current subjective one—e.g., ‘‘does not engage in conduct that could reasonably be foreseen to interfere with technological measures.’’ It has also been suggested that language derived from 17 U.S.C. 512(i) be added

to this paragraph (or as a new paragraph) to require both noninterference with and

accommodation of ‘‘standard technical measures’’ in order to be eligible for the exemption. While the requirement in the bill of noninterference with a copyright owner’s technological protection measures coupled with existing prohibitions on circumvention of access control measures in 17 U.S.C. 1201 should provide a substantial level of protection for right holders, it is possible that the case could be made

for inclusion of the stricter obligation in section 512(i).

SECTION 3. EPHEMERAL RECORDINGS

Section 3 of the bill amends 17 U.S.C. 112 by adding a new subsection which permits an educator to upload copies of a copyrighted work onto a server solely to facilitate transmissions permitted under section 110(2). Limitations have been imposed

upon the exemption similar to those set out in other subsections of section 112.

Paragraph 112(f)(1) specifies that any such copy be retained and used solely by the

entity that made it and that no further copies be reproduced from it except the transient copies permitted under section 110(2). Paragraph 112(f)(2) requires that the

copy be used solely for transmissions authorized under section 110(2). Paragraph

112(f)(3) prohibits a body or institution from intentionally interfering with technological protection measures used by the copyright owner to protect the work.

The exemption only applies to ‘‘a work that is in digital form.’’ Consequently, it

is not possible under the proposed subsection to scan a literary work, or otherwise

convert a work to digital form. Use of works in digital form on the Internet bears

well-documented risks for right 13 holders. Some right holders may choose not to

expose themselves to that risk by refraining from ‘‘going digital.’’ This exemption is

not intended to force those right holders to ‘‘go digital’’ against their will.

In our Report, we recommended that section 112 be amended to allow a single

ephemeral recording to carry out a transmission permitted under section 110(2).

However, the technology of digital streaming requires that more than one ephemeral

copy be maintained on a server. Consequently, we support the bill’s expansion of

the ephemeral recording exemption to include multiple copies. It is the view of the

Copyright Office that the safeguards built into the proposed subsection, including

the extremely limited purposes for which ephemeral recordings may be used, provide adequate assurance that the additional copies authorized by the subsection will

not have any measurable impact on content owners.

SECTION 4. IMPLEMENTATION BY COPYRIGHT OFFICE

Subsection (a) states that not later than two years after the date of enactment

of this Act, the Copyright Office shall conduct a study and submit a report to Congress on the status of licensing by private and public educational institutions of

copyrighted works for digital distance education programs, including live interactive

distance learning classes, faculty instruction recorded without students present for

later transmission, and asynchronous delivery of distance learning over computer

networks, and also on the use of copyrighted works in such programs. We caution

that much of this information is considered proprietary and will be difficult to obtain. Although such a report could be very valuable to the Committee to the extent

that empirical evidence can be obtained, this may not be possible in many instances.

Subsection (b) requires the Copyright Office, not later than two years after the

date of enactment, to convene a conference of interested parties, including representatives of copyright owners, nonprofit educational institutions and nonprofit libraries and archives to develop guidelines for the use of copyrighted works for digital distance education under the fair use doctrine and sections 110(1) and (2). The

conference would initiate a process that has as its goal the promulgation by the

Copyright Office of guidelines for the fair use of copyrighted works in digital distance education.

The Copyright Office believes that fair-use guidelines for particular areas of activity have proved useful in the past, and digital distance education is an area where

development of new guidelines certainly would be appropriate. We support such a

Congressionally-mandated process to establish fair-use guidelines for digital distance education. Since guidelines do not have the force of law, their success in prac-
16

tice depends largely on the degree to which interested parties endorse them. A

strong message from the Congress to the affected parties that guidelines are desirable, as evidenced by subsection (b), could play a pivotal role in the eventual success

of such an effort.

The Copyright Office is concerned, however, about the inclusion of sections 110(1)

and (2) as subjects for the guidelines, as they are specific exemptions with delineated parameters. The Office would propose that these sections be removed from the

scope of the conference and addressed through informational materials of the type

regularly issued by the Copyright Office.

CONCLUSION

The Copyright Office supports this legislation to carry out the recommendations

made in its 1999 Report. We look forward to continuing to work with the Committee

in this important endeavor.

Chairman HATCH. Thank you very much.

Senator LEAHY. Mr. Chairman, could I just ask unanimous consent that a statement by Senator Kennedy be included in the opening statements?

Chairman HATCH. Without objection, we will place that in the

appropriate place in the record.

[The prepared statement of Senator Kennedy follows:]

PREPARED STATEMENT OF HON. EDWARD M. KENNEDY, A U.S. SENATOR FROM THE

STATE OF MASSACHUSETTS

I would like to thank Chairman Hatch for convening this hearing to address the

issue of digital distance learning. Both he and Senator Leahy have demonstrated

impressive leadership in this area and I am confident that, as a result of these efforts, our copyright laws will be clarified to permit the expanded use of digital technology in the American education experience.

For over two decades, distance learning has been a critical component of our nation’s education policy. Technological advances ensure that distance learning will become an even greater part of the educational experience in the years ahead. It is

essential that we create clear guidelines for schools, libraries and other education

providers as the concept of the classroom and the profile of the traditional student

become broader.

Digital technology expands access to curriculum materials for students in non-traditional educational settings and creates opportunities for new interactive learning

experiences. For older and returning students as well as those whose work or home

obligations preclude them from attending classes in a traditional campus setting,

distance learning can open the doors to higher education. In the earlier grades, distance learning improves opportunities for children in remote areas or underfunded

school systems, by allowing them to take advantage of material that otherwise

would be unavailable to them.

Digital formatting changes the delivery system for copyrighted material and challenges us to develop appropriate safeguards to prevent abuse. This legislation represents an excellent beginning for the development of those safeguards.

The bill appropriately expands the educational exemption that requires instruction to take place in a classroom setting. The scope of material that may be used

in a transmission is broadened to include new categories of copyrighted material

such as audiovisual works and sound recordings. The use of transient copies is limited to ensure that they are retained only for a reasonable amount of time. Additional protections are established to limit the subsequent use of materials that are

distributed under the new exemption.

I commend Register of Copyrights Marybeth Peters for her diligence and guidance

in this matter. The Copyright Office report on digital distance learning is a valuable

blueprint to guide us in the effort to affirm the fundamental principles of fair use

in an educational context at a time when evolving technology re-defines classrooms.

I look forward to receiving the expert testimony today. I am especially pleased

that, with these new guidelines, the extraordinary capability of new technology will

be more fully integrated into the educational experiences of every student and that

those experiences will be enriched by the books, manuscripts, sound recordings and

films that comprise the American creative legacy.

I look forward to working with my colleagues on the Judiciary Committee toward

passage of this important legislation.
17

Chairman HATCH. Mr. Heeger?

STATEMENT OF GERALD A. HEEGER, PRESIDENT, UNIVERSITY

OF MARYLAND UNIVERSITY COLLEGE, COLLEGE PARK,

MARYLAND

Mr. HEEGER. Thank you, Mr. Chairman, Mr. Leahy. Thank you

for the opportunity to testify on S. 487. You have my written testimony. I simply want to make several points of emphasis.

My institution, UMUC, as it is known, is probably known to you

as one of the largest providers of distance education in the world.

It has for 54 years provided distance education to U.S. military

forces overseas in classrooms with faculty present around the

world, and even today at 120 bases worldwide. At the same time,

it has one of the largest online enrollments in the world, including

military students, students from all over the United States, and increasingly the world. We have at UMUC 28 full degree programs

online, and this year we will register more than 70,000 enrollments

online.

I mention our size to you because it merely means that we are

confronting many issues in this area first, but we will not be the

last. I am here to speak not only on behalf of my institution, but

also on behalf of the many associations listed in my written testimony. All of these associations and the institutions which participate in them strongly support S. 487 because it would move to

bring copyright law into accord with the educational realities of

today, where digital distance education portends dramatic change

in educational access and quality.

We have all recognized the critical importance of education to

America’s future. We confront the need to compete globally, the

need to expand capacity of our educational institutions, and the

need to recognize that all citizens in all places need access to education lifelong.

More than anything else, distance online education offers new solutions to such challenges. There are myriad examples we are all

familiar with, but current copyright law imposes significant barriers to digital distance education. The 1976 Copyright Act was not

written with the Internet or online education in mind. Its provisions governing distance education present two basic problems for

us today.

First, a limitation on the types of works that may be utilized in

remote transmission drives an untenable wedge between content in

the classroom and content in distance education. That wedge

threatens to undermine the very viability of quality in online education.

Second, the current law does not fully accommodate some of the

technical aspects of delivery and instructional content over computer networks. Again, the absence of such rules of the road, as I

would call them, jeopardizes the whole enterprise.

I could offer numerous examples. I will cite only two, one from

a major university renowned for its cinema program, frustrated in

its effort to create a dynamic new distance education film course,

despite being willing to commit more than $600,000 to the production of the course, yet unable to bring about a course that relied

on short film clips that drew on segments as short as 30 seconds.
18

Some people never responded. Others demanded a great deal of

money. Others just simply denied participation. In the end, the

failure to secure rights to film clips less than a minute long shut

down what was going to be an exciting educational program.

My university, the second example, the University of Maryland

University College, at the request of State authorities, has worked

hard to create an innovative teacher education program. Teacher

education requires an innovative use of instructional materials.

Again, such materials remain out of reach in terms of distance education.

Let me just take this to the broadest level of policy. We need to

realize that to fully realize the potential of distance education, we

need to establish parity between the virtual class and the physical

class. Not to do so undermines academic quality, makes sound

management practices impossible and, most importantly, potentially makes distance education students second-class citizens by

denying them access to the rich materials essential for a quality

education.

Thank you.

[The prepared statement of Mr. Heeger follows:]

PREPARED STATEMENT OF GERALD A. HEEGER, PRESIDENT, UNIVERSITY OF

MARYLAND UNIVERSITY COLLEGE

DISTANCE EDUCATION TESTIMONY

Mr. Chairman and Members of the Judiciary Committee, I am Gerald Heeger,

President of the University of Maryland University College. I am pleased to have

this opportunity to testify on S. 487, the Technology, Education, and Copyright Harmonization Act of 2001. I am testifying on behalf of the Association of American

Universities, the American Council on Education, the National Association of State

Universities and Land-Grant Colleges, and the Association of Research Libraries.

The colleges, universities, and libraries which are members of these associations

strongly support S. 487 because it would bring copyright law into accord with the

education realities of today, enabling a fuller realization of the enormous potential

of digital distance education to expand teaching and learning in time, place, and

richness of content.

The University of Maryland University College, or UMUC, is one of eleven degreegranting institutions within the University of Maryland System. Founded in 1947,

its programs focus on the adult learner and it specializes in distance education. In

the past few years, it has become the leading online university in the country, with

over 43,000 online enrollments in the last academic year, and an estimated 70,000

enrollments this year. UMUC offers 14 undergraduate degrees and 14 graduate degrees, including the MBA, fully online. Last year, the University was the first recipient of the E-Learning Award. It was recognized recently by Forbes magazine for its

excellence in Web-based instruction. Additionally, its librarian received a commendation from Maryland’s Governor for creating the Maryland Digital Library, a

resource for colleges and universities in the state that provides access to over 400

electronic books and nearly 3,000 electronic journals.

Education is the means by which we develop our nation’s human resources. As

we move into an international information age, where both cooperation and competition will be carried out world-wide, the ability of the United States to meet its domestic and international challenges and responsibilities will be directly dependent

on the quality and capacity of its educational programs. That quality and capacity

in turn will be determined by the content of those programs and their reach

throughout our citizenry. For our nation to maintain its competitive edge, it will

need to extend education beyond children and young adults to lifelong learning for

working adults, and that education must reach all students of all income levels, in

cities and rural settings, in schools and on campuses, in the workplace, at home,

and at times selected by students to meet their needs.

Digital distance education makes this possible, and we are witnessing a steady

growth in online education, both as distance education in the traditional sense,

where instructor and student are separated in place and perhaps time, and in new
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hybrids of traditional, residential classroom education combined with online components. Increasingly, college students can register for courses online, submit class assignments by email, and participate in discussions that connect students in a classroom with students beyond the classroom, sometimes beyond the nation’s boarders.

Similarly, K–12 students can learn about the customs and cultures of other countries through real-time audiovisual

conversations with pen pals from those countries; they can learn science in new

ways by having scientific demonstrations and actual experiments conducted at distant locations brought to them in real time via the Internet. The National Science

Foundation, the National Academy of Sciences, and other scientific societies and

educational organizations are working hard to improve our nation’s science and

mathematics education; other groups are developing new ways to bring humanities

and the arts to students and the broader public. Many of these new educational efforts draw on advances in information technology and digital networks.

Digital distance education also has special value to two groups with which UMUC

is very familiar. One is the servicemen and women in the United States military,

who benefit greatly from the ability to obtain instruction in remote locations. Additionally, the University’s online course offerings are very attractive to disabled

Americans. This past fall, we had nearly 400 disabled students, including around

200 disabled veterans enrolled in courses at the University.

Such efforts have or will soon come up against barriers set by current copyright

law. In 1976, Congress wisely recognized the pedagogical value of allowing teachers

to enrich the classroom learning of their students by permitting the performance or

display of lawfully made copyrighted material without having to get clearance from

the copyright owner. Thus, a teacher could show a movie or the performance of a

drama, or could display a painting as part of the course of instruction. Recognizing

the potential of distance education-which in 1976 was essentially remote instruction

by television Congress also authorized the display of any copyrighted material and

the performance of non-dramatic literary or musical works at remote classroom settings.

The 1976 law was not written with the Internet and online education in mind,

and its provisions governing distance education present two basic problems today.

First, the limitation on the types of works that may be performed by remote transmission to non-dramatic literary and musical works drives an increasingly untenable wedge between content in the classroom and that at a remote location. Second,

current law does not fully accommodate some of the technical aspects of delivering

instructional content over computer networks.

Let me give just one example of how current law impedes the development of digital distance education. At a major university, the highly ranked cinema program recently tried to develop a distance education film course. The institution was committed to invest $600,000 in the effort. Part of the course involved the use of film clips

ranging from 5 to 30 seconds. Negotiations for rights went on interminably. Permissions had to be gotten from, and payments had to be made to, copyright owners and

actors. Some people never responded, others demand a great deal of money, some

simply said no. In the end, after losing a substantial amount of money, the failure

to secure the rights to film clips less than a minute long shut down a promising

program.

This example illustrates two stark realities confronting digital distance education.

First, it is very expensive. The university above was prepared to invest $600,000

in a single program; how many institutions can contemplate such an investment?

Elementary and secondary schools, colleges and universities will have to find substantial new resources to invest in the computers, networks, and applications necessary to support digital educational activities, as well as in faculty development,

teacher training, and the development of courseware and other course materials. Although digital distance education may in the future produce genuine economies, in

the short run the start-up and delivery costs are very expensive, so that all institutions are limited by cost in what they can do, and some institutions are simply kept

out of significant digital education activities because of its steep costs.

The second reality confronted by digital distance education is that, even if we find

the resources to build the necessary infrastructure, digital education will be threatened with second-class status unless and until local and remote educational content

are brought into closer accord. The inescapable fact is that for digital distance education to achieve its full potential, instructors must be able to conduct remotely all

educational activities permitted in a physical classroom. Yet consider the university’s effort to establish a distance education film course. This ultimately abandoned

effort highlights four key points: (1) the copyright barriers are real, (2) no aspect

of the proposed program would have possibly threatened anyone’s market, (3) yet

an opportunity to expand a first-class educational program beyond its residential
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boundaries was lost, and (4) if legislation such as that which we are considering

today had been in place, a new distance education film course would be reaching

new students.

Licensing is not the solution to copyright barriers. Licensing the use of content

is slow, costly, and does not permit the instructor freedom in the selection of materials for transmission in the digital classroom. Further, there is a misperception

that an online course is developed in advance, so getting permissions is reasonable

and possible. However, in reality, that is not the case. Faculty members frequently

supplement the ‘‘core’’ course materials ‘‘on the fly’’ and need flexibility to do so. Requiring licenses will limit the freedom for distance education faculty to use materials essential to the learning process. Provided that there are proper safeguards,

the online environment should not be more restricted than the face-to-face teaching

environment.

It is these copyright barriers that the Copyright Office addressed in its thoughtful

1999 report on distance education. The recommendations of the Copyright Office for

statutory changes to current copyright law would go far toward accomplishing the

objective stated above of enabling remotely all educational activities permitted locally, in a physical classroom. We strongly support the Copyright Office report and

its recommendations for statutory changes to the current copyright law.

Our reading of S. 487 is that, in the main, it would effectively implement the statutory changes recommended by the Copyright Office, carefully balancing expansions

of the distance education exemption with prudent safeguards.

The following provisions of the bill are particularly important:

• exempting digital transmissions from Section 106 rights to the extent necessary

to permit such transmissions in the ordinary operation of the Internet, • eliminating the physical classroom requirement for remote reception of educational material, • enabling the asynchronous use of material by permitting material to be stored

on a server for subsequent use by students, • expanding the categories of work exempted from the performance right to include reasonable and limited portions of audiovisual and dramatic literary and musical works, as well as sound recordings of the musical works that already are within the scope of the exemption.

We understand the difficulty of achieving full parity between local and remote

educational activities due to the risks of unauthorized reproduction and redistribution of digital content. The Copyright Office report addresses these concerns in a

forthright and informed analysis. In its translation of this analysis into legislative

provisions, S. 487 would enact a number of safeguards, including: • limiting transmission of material to students officially enrolled in the class, • limiting the retention of temporary copies,

limiting the use of materials to circumstances that involve mediated instruction

in order to assure that materials are used remotely as they would be in a classroom,

• requiring the use of technological measures that reasonably prevent downstream redistribution, and

• limiting performances of audiovisual works, dramatic works and sound recordings to reasonable and limited portions.

S. 487 translates the Copyright Office recommendations for statutory modifications into a carefully bounded but extremely important set of legislative provisions

that will permit the fuller development of digital distance education.

One major reservation we have with the legislation is its failure to include reasonable and limited portions of instructional material works in the expanded categories

of works exempted from the performance right. We understand the concern that

such an exemption could threaten the primary market for instructional material.

However, excluding instructional material from the performance exemption will impose a serious constraint on the development of distance education. Instructional

material often will be essential to effectively harmonizing the content of local and

remote instruction. Moreover, the exemption provided by the proposed bill would

provide important guideposts in license negotiations and would help ensure that all

educational markets, not merely the one for which a particular licensing regime had

been developed, will have access to the work.

One particularly cogent example from my university is teacher education. We are

newly engaged in the training of teachers online to alleviate a significant teacher

shortage in the State of Maryland. Whether it’s training new teachers who are

changing careers or training current teachers to educate their students in an online

environment, our effort to provide proper instruction online would suffer from the

inability to show instructional videos. Especially at a time when the need for teachers nationally is so great, it would be advantageous to have this bill allow the use

of instructional materials in the training of teachers.
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We believe that the limitations contained in the bill will provide substantial protection for the copyright owner. Accordingly, we urge you to consider including instructional audiovisual materials within the scope of the exemption.

We are developing several other suggestions for changes in the legislation that

would, we believe, make a valuable bill even better, and we would appreciate the

opportunity to forward such suggestions to you in the near future once we have refined those suggestions.

We also would like to comment on Sec. 4 of the bill. This section calls on the

Copyright Office to issue a report on licensing of copyrighted works in digital distance education programs and the use of copyrighted works in such programs, and

to convene a conference to develop guidelines for use of copyrighted works in digital

distance education under the fair use doctrine and section 110(1) and (2) of the copyright code. A report on licensing and use of copyrighted works in distance education

that stems from the same thorough, open and balanced process that the Office used

to produce its excellent report on distance education would undoubtedly be useful

for Congress and external parties, and we support this proposal.

The legislation calls for the Office to convene a conference in order to develop

guidelines on the use of copyrighted works in distance education, and for the Office,

if it deems it appropriate, to submit those guidelines to the Senate and House Committees on the Judiciary. We are concerned with the presumption that appears to

be inherent in this process that the conference will develop guidelines. Efforts to develop guidelines have proved difficult and controversial. The fair use doctrine is inherently-and, in our judgment, wisely-imprecise, calling for a judgment on four factors to determine if a use is fair. Thus, we would prefer that, if S. 487 is to call

on the Copyright Office to convene a conference, the conference bring together interested parties to discuss the use of copyrighted material in distance education, and

only if the Office and the conference participants deem it feasible, would the conference develop guidelines. We note that the section-by-section analysis of the bill

describes something closer to this preferred process: that the Office would convene

a conference ‘‘on the subject of the use of copyrighted works in education and, to

the extent the Office deems appropriate, develop guidelines . . . for submission to

Congress . . .’’ and urge that the same approach be included in the text of the bill.

In closing, I would like to reiterate the importance for the future of distance education of allowing the same educational content remotely that occurs locally in a

physical classroom. Anything short of that will doom distance education to secondclass status and cripple its enormous potential to expand dramatically the educational capacity of our nation and its ability to compete in the new world economy.

As both local and remote educational content increasingly involves new multimedia

material, the disparity in treatment under current law will place a growing burden

on digital distance education. Thus, enactment of legislation such as S. 487 is imperative to the development of distance education and its capacity to expand the boundaries of teaching and learning in time, place, content, and category of student.

We commend you for this bill, and we look forward to working with you to add

refinements to it and enact it into law.

Thank you for this opportunity to testify on this important legislative and educational initiative.

Chairman HATCH. Thank you, Mr. Heeger.

Mr. Adler?

STATEMENT OF ALLAN R. ADLER, VICE PRESIDENT FOR

LEGAL AND GOVERNMENTAL AFFAIRS, ASSOCIATION OF

AMERICAN PUBLISHERS, WASHINGTON, D.C.

Mr. ADLER. Thank you, Mr. Chairman. We appreciate the opportunity to appear here today to present the views of America’s book

publishing industry.

Mr. Chairman, since both you and Senator Leahy, I know, had

distinguished careers as lawyers prior to coming to the Senate, I

think you will appreciate our approach in pleading in the alternative with respect to this bill. So the first argument we will make,

knowing that you have already introduced the bill, and hearing

your enthusiasm for pursuing it, is nevertheless to ask you to reconsider whether this is the appropriate time, given the condition

in the marketplace, for legislation to change copyright law.
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We have testified twice, in July 1999 before the House Judiciary

Subcommittee and again in July 2000 before the Web-based Education Commission, explaining our views that the record and landscape documented in the Register’s report did not justify a change

in copyright law as proposed by the Register.

We believe that the developments in the area of distance education since then reaffirm our conclusions with regard to that report. First, let me just briefly summarize the reasons why we believe this is true.

Given the fact that the marketplace for distance education, as

documented in the Register’s report, continues to grow at an exponential rate and is extremely vibrant and bustling with competition

and innovation, we don’t believe that the Copyright Act is really

holding back in any serious way the production of high-quality digital content and the ability to have that content available for use

in distance education.

One has to ask, given the level of investment and entrepreneurial activity in this area both by non-profit and for-profit entities, including those in the education field, how have they been able to be

successful in growing this field if the Copyright Act was indeed

such an obstacle.

The reason is very simple. These people are able to create their

own digital content. They are able to digitize preexisting public domain materials. They are able to make fair use of preexisting thirdparty works, and they are able to obtain licenses for using preexisting third-party works to create multimedia and other kinds of

works for use in online distance education.

No doubt, there is anecdotal evidence of licensing problems, and

we are not here to defend those instances where license requests

have been made and the responses have been either unreasonable

or what some people in the user community might even characterize as abusive. But those problems, too, are being addressed, and

I would point out to you that in our written submission we give examples of the things that many publishers are doing to go online

with their permissions process to make it more convenient for

users who want to be able to use materials to which they hold

copyright.

Secondly, we believe that the proposed legislation is unjustifiable, again, because of the level of activity in the marketplace. It

is quite clear that distance education is growing by leaps and

bounds. And again, if that were something that would be held back

by the restrictions of copyright, I think we would have seen more

manifestations of that than have been documented in the Register’s

report.

Third, the proposed legislation unworkable. It is unworkable basically for two reasons. One is because the Register recognizes that

in order to maintain a proper balance between the concerns of

copyright owners and the user community, it is important that any

exemption be based upon the application of technological safeguards to ensure that after legitimate access to work through distance education programs occurs, there is no unauthorized further

reproduction or distribution or other use of those materials.

The Register’s report documented in May 1999 that such sophisticated technologies may become widely available in the near fu-
23

ture, but they are not there yet in a convenient and affordable

manner that can protect all varieties of works and market uncertainties remain. That situation is still true today.

I would also point out to you that in the interim period since the

report, we have seen other reasons to be somewhat dubious about

the ability to ensure that proper treatment of copyright owners’ concerns will be afforded if such an exemption is enacted into law.

For example, in the situation of the Napster phenomenon which

two Federal courts enjoined as fostering ongoing instances of blatant copyright infringement on an unprecedented mass scale, it

should be noted that this phenomenon was chiefly pursued by students using campus-based Internet access and computer networks.

We also are concerned about the aversion and distrust directed

toward legal prohibitions enacted in the DMCA by the education

community, as evidenced in their testimony at hearings conducted

last year by the U.S. Copyright Office on the circumvention issue.

Finally, we are concerned that recent rulings by the U.S. Supreme Court and other Federal courts of appeals which have

barred lawsuits for damages against State entities for violations of

Federal statutory rights may have eliminated the primary incentive for public educational institutions to comply with legal standards that protect the rights of copyright owners.

Our other concern in this area is the fact that the exemption

maintains the 25-year-old application specifically to non-profit educational institutions, despite the fact that the Register documented

2 years ago, and the market has continued to proceed in a way that

completely blurs and obliterates the distinction between the involvement of non-profit and for-profit entities.

Again, as I said at the outset, we are pleading in the alternative.

Our other argument would be that if you believe that it is still, despite these reasons, justified to go forward with legislation, we

have set forward a number of concerns in our testimony that we

hope will allow you to revise this legislation in a way that will

properly balance the concerns of copyright owners and the user

community so that the clever acronym that you have come up with

for this legislation, TEACH, does not devolve into something that

really would stand more for the Technology, Education and Copyright Heist Act, in the way it would be performed in application.

We have divided those comments into areas that would affect the

scope of the legislation, particularly the scope of the exemption,

who is eligible for applying the exemption, and the safeguards that

are involved in them. We would be happy to answer any questions

both today and in writing with respect to those particular suggestions.

[The prepared statement of Mr. Adler follows:]

PREPARED STATEMENT OF ALLAN R. ADLER, VICE PRESIDENT FOR LEGAL AND

GOVERNMENTAL AFFAIRS, ASSOCIATION OF AMERICAN PUBLISHERS

Mr. Chairman and Members of the Committee:

Thank you for inviting me to appear here today on behalf of the Association of

American Publishers (‘‘AAP’’) to discuss S. 487, the proposed ‘‘Technology, Education

And Copyright Harmonization Act of 2001’’ (or the ‘‘TEACH Act’’).

As the principal national trade association of the U.S. book publishing industry,

AAP represents some 300 member companies and organizations that include most

of the major commercial book publishers in the United States, as well as many

small and non-profit publishers, university presses and scholarly societies.
24

AAP members publish hardcover and paperback books in every field of human interest. Among these members are the nation’s leading trade publishers, who produce

a wide array of fictional and non-fictional literary works that include the ‘‘best sell- ers’’ enjoyed by millions of readers of all ages and backgrounds. Also among them

are the nation’s leading educational publishers, who produce textbooks and other instructional and testing materials covering the entire range of elementary, secondary,

postsecondary and professional educational needs.

While continuing to serve market demands for paper-based books and journals,

many AAP members now operate Internet websites and produce computer programs, databases, multimedia products, and other electronic software for use online

and in other digital formats. Many are also making substantial investments in the

nascent ‘‘e-book’’ market, where the reader’s use and enjoyment of all kinds of literary works may be greatly enhanced through the added functionality that books

in digital formats can offer when read on computer screens or through hand-held

personal digital appliances.

Many AAP members are vigorously responding to the popular embrace of the

Internet as an exciting new commercial and educational medium. They understand

the medium’s unprecedented capabilities for flawless and instantaneous reproduction, distribution, performance and display of text, images and sounds on a global

basis. Like other media industries, book publishers are rethinking and revising their

business models to adjust to the opportunities and risks created by these capabilities in a marketplace of increasing competition and evolving consumer preferences.

Confidence in their ability to exploit and enforce copyright interests in the digital

online environment is a key factor in shaping these new business models.

ORIGINAL AAP OBJECTIONS TO THE REGISTER’S RECOMMENDATION: STILL VALID

TODAY

The proposed legislation before the Committee today is based on the legislative

recommendations contained in the Register of Copyright’s May 1999 ‘‘Report on

Copyright and Digital Distance Education.’’ That report critically evaluated the educational community’s assertions that ‘‘outdated’’ provisions of copyright law, as well

as extant copyright licensing practices and the deployment of technological protection measures by copyright owners, would hold back the development of Internetbased ‘‘distance education’’ unless Congress took action to mitigate their impact.

In July 1999 before the House Judiciary Subcommittee on Courts and Intellectual

Property, and again in July 2000 before the Congressionally-mandated Web-Based

Education Commission, AAP reviewed the state of Internet-based ‘‘distance education’’ as documented in the Register’s Report and concluded that the Register’s

recommendations to amend current copyright law were (1) unnecessary to ensure

the availability of diverse, high-quality online educational programs; (2) unjustifiable in the face of the bustling marketplace for the production of digital content;

(3) unworkable insofar as they were contingent upon the deployment of technological

safeguards not yet widely-available in the marketplace; and (4) unfair insofar as

they ignored the exploding competition, collaboration and consolidation among forprofit and not-for-profit providers of online education programs.

Moreover, since no one has been advocating that Congress should enact legislation

eliminating the need to pay for computers, software, Internet access, faculty salaries, costs of administrative personnel, and tuition in connection with online education programs, the AAP questioned why the costs of course content and, therefore,

the copyright owners who create and produce them—should stand alone among the

necessary elements of online educational programs as exempt from payment of fair

market prices for the value they provide in the competitive ‘‘distance education’’

marketplace.

Today, faced with Congressional consideration of proposed legislation embodying

the Register’s legislative recommendations, AAP maintains that the objections it

raised and the question it asked in response to previous consideration of the Register’s recommendations remain valid.

The proposed legislation is unnecessary—Although the ‘‘distance education’’ provision in Section 110(2) of the Copyright Act was written for instructional broadcast

television, and does not really apply to Internet-based online education, current

copyright law nevertheless provides adequate bases for the creation and acquisition

of online digital content. In fact, the admittedly limited scope of the existing statutory exemption for ‘‘distance education’’ has been largely irrelevant to the growth

of the marketplace because, in most instances (as documented in the Register’s Report), providers of online educational programs are able to:

• create their own digital content;

• digitize preexisting ‘‘public domain’’ materials;
25

• make ‘‘fair use’’ of preexisting third-party works; or,

• obtain licenses to use preexisting third-party works.

While the Register’s Report noted anecdotal evidence of licensing problems ‘‘primarily involving difficulty in locating owners, inability to obtain a timely response,

and unacceptable terms,’’ it rejected any need for a legislative solution; concluded

that many of these problems ‘‘should diminish with time and experience;’’ and recommended ‘‘giving the market for licensing of nonexempt uses leeway to evolve and

mature.’’ (p.164–167).

Although some licensing problems are still encountered in today’s marketplace,

substantial progress toward making the licensing process more convenient and comprehensible for both parties has occurred since the Register’s Report was issued. Recent actions reported by AAP members bear out the Register’s prediction that such

problems will continue to be addressed as the marketplace evolves and matures. For

example:

• Houghton Mifflin’s College Division has upgraded its Permissions Department’s

website so customers can submit permission requests by using online ‘‘fill-in-theblank’’ forms or downloading PDF templates to fill out and submit by fax. At the

same time, the College Division is conducting a pilot program with Copyright Direct,

a permissions tool of Yankee Rights Management that permits users to obtain realtime permissions online. The College Division is also working with Reciprocal, a ‘‘secure system’’ provider for granting and holding permissions, which also provides ‘‘secure containers’’ that permit rights and permissions information to be carried online

with the content to which its relates.

• Pearson Education’s Prentice Hall subsidiary has established a ‘‘Companion

Website Gallery’’ which provides descriptions and links for an array of textbook-supporting websites that correlate additional learning activities with specific college

textbooks. In addition, like several other AAP members, it has contracted with

NetLibrary, an online provider of e-books, to make some of its college texts available

for online access with full-text search capabilities. Computer Curriculum Corporation, a separate division of Pearson Education, also offers CCC Destinations Internet, a comprehensive online learning program that permits remote delivery of customized, essential skills education for adolescent and adult learners in community

colleges, correctional education programs, and public housing education programs.

• Elsevier Science has established ScienceDirect, an online current awareness

service with a ‘‘click-through’’ license that allows institutional subscribers to their

print journals to have free remote online access to the most recent twelve months

of journal issues on a rolling basis. If the subscriber allows all or selected members

of the public to access its collections, the license allows such persons to access the

journals online from workstations in the institutional facility.

• Thomson Learning’s Global Rights Group has established a website for online

evaluation and disposition of permission requests for all Thomson Learning Higher

Education and Lifelong Learning companies. The website cannot be used to order

and purchase materials, but provides for the use of online permission request forms

and a ‘‘Lookup’’ status check button for all materials produced by Thomson

Learning’s ten higher education companies.

• Harcourt College Publishers, one of Harcourt General’s higher education companies, has established an Online Learning Center that utilizes the WebCT platform

to deliver courses customized by instructors to accompany many of its main textbooks. Its Custom Publishing operation allows instructors to request modifications

to the company’s own products, including removal of excess chapters, addition of instructor materials, institutional personalization, and the combination of several

products into one. Archipelago Productions, another Harcourt higher education company, which develops multimedia courseware for distance and distributed learning,

has announced alliances with WebCT and Blackboard, Inc., both well-known providers of online education platforms, to deliver Archipelago’s Online Courses in a hybrid ‘‘netCD’’ environment that leverages CD-ROM and Internet technologies to feature the presentation benefits of CD-ROMs and the interactivity of Web browsers

embedded into the disks.

• Wiley InterScience is an online journals service through which John Wiley &

Sons, a leading scientific publisher, allows all users to browse and search Tables of

Contents of all of its journals online, and obtain online access to abstracts for all

of its titles. Depending on the type of subscriber, the service can also offer online

access to the full text of all subscribed journals.

The proposed legislation is unjustifiable—Proof that current copyright law has not

produced what the Register would have called a ‘‘dysfunctional market’’ for the provision of online educational content was affirmed by the Register’s own characterizations of that marketplace, including the following:
26

Distance education in the U.S. is ‘‘a vibrant and burgeoning field’’ which the advent of digital and other new technologies for delivery has made ‘‘the focus of great

creativity and investment.’’ (p.1)

‘‘[T]he expanded audiences for these programs represent a potentially lucrative

market, which the varied participants in the process, including both corporations

and educational institutions, are seeking to tap.’’ (Id.)

‘‘[D]igital technologies have fostered a rapid expansion in recent years, as well as

a change in profile [in which] many more distance education courses are being offered than ever before, and the number is growing exponentially.’’ (p.9)

‘‘Today’s distance education courses use digital technology extensively for varied

purposes and in varied ways. The addition of digital technologies to the distance

education palette has produced new models of learning, resulting in a richer and

more interactive class environment.’’ (p.13)

The continuing vigor of the Internet-based ‘‘distance education’’ marketplace was

reaffirmed more than a year after the issuance of the Register’s Report when the

Web-Based Education Commission, in December of last year, reported that many

private-sector providers are now shifting from producing content to aggregating instructional information and acting as ‘‘portals’’ for other content-based resources.

Paradoxically, it also noted that, unless state and local educational agencies ‘‘create

significant demand for innovative online learning materials, it may not be economically feasible for many online education content providers to stay in business.’’ (The

Commission, which received testimony from the Register of Copyrights and other

proponents of ‘‘updating’’ the copyright laws to facilitate Internet-based education,

noted the anecdotal record of asserted problems, but did not urge legislative action

to amend the copyright laws.)

The proposed legislation is unworkable—While the Register recognized that an

‘‘updated’’ exemption must be conditioned on the application of effective technological safeguards in order to ensure that the balance of interests between copyright

owners and users of works would be ‘‘comparable’’ to what Congress had carefully

crafted into the existing exemption, this key element of the Register’s recommendation was effectively undercut by the Register’s observation that:

‘‘Sophisticated technologies capable of protecting content against unauthorized

post-access use are just now in development or coming to market, and may become

widely available in the near future. But they are not there yet in a convenient and

affordable form that can protect all varieties of works, and market uncertainties remain.’’ (p.141)

This situation has not substantially changed since the Register’s Report was

issued in May 1999. At present, no one really knows the costs or other burdens involved in implementing the technological measures requirement in the proposed legislation. But, even if the necessary technological safeguards were widelyavailable in

‘‘a convenient and affordable form’’ in today’s market, copyright owners have, in the

period since the issuance of the Register’s Report, acquired some legitimate reasons

to entertain doubts about the willingness of many ‘‘non-profit educational institutions’’ to take on the full costs and responsibility of good-faith compliance in their

implementation. Some of these reasons are based on the extent to which the

Napster phenomenon, which two federal courts have enjoined as fostering ongoing

instances of blatant copyright infringement on an unprecedented mass scale, has

been chiefly pursued by students using campusbased Internet access and computer

networks. Others may be based on the evident aversion and distrust directed toward

legal prohibitions against circumventing such technological safeguards by representatives of the higher education community in hearings conducted last year by the

U.S. Copyright Office. Still others may be based on the fear that recent rulings by

the U.S. Supreme Court, which have barred lawsuits for damages against State entities for violations of federal statutory rights, have eliminated the primary incentive for public educational institutions to comply with legal standards that protect

the rights of copyright owners.

The proposed legislation is unfair—The Register’s proposed retention of the existing exemption’s application to ‘‘nonprofit educational institutions’’ cannot be squared

with the realities of the online education marketplace where, based on the following

unequivocal finding by the Register, it would create unfair and unjustifiable inequities among providers of distance education programs:

‘‘While mainstream education in 1976 was the province of nonprofit institutions,

today the lines have blurred. Profit-making institutions are offering distance education; nonprofits are seeking to make a profit from their distance education programs; commercial entities are forming partnerships with nonprofits; and nonprofits

and commercial ventures are increasingly offering competitive products.’’ (p.152–

153)
27

In order to appreciate the continuing validity of this finding, consider the explosion of entrepreneurial activity involving the higher education community’s own efforts to create and market online education courses. For example, the following developments occurred after the issuance of the Register’s Report, as reported in weekly editions of the Chronicle of Higher Education last year: • A for-profit company, Final-Exam.com, announced plans to sell Webbased study

guides for survey-level college courses, using textbook authors and other scholars to

edit and market them with the option of customization by professors from their own

syllabi. (January 14, 2000) • Following the examples of New York University, Columbia University and the

University of Maryland University College, Cornell University announced creation

of a for-profit subsidiary, ‘‘eCornell,’’ to market its online courses and materials online. (March 24, 2000)

• Together with five other leading educational and culture institutions, Columbia

University announced the creation of a for-profit subsidiary, ‘‘Fathom,’’ to operate

a website for marketing their respective ‘‘authenticated’’ original scholarly resources

online. (April 14, 2000)

• Following the lead of Stanford University’s NextEd portal, Class.com, a for-profit subsidiary of the University of Nebraska at Lincoln, will be selling its online

course content for high-school programs internationally, with eventual conversion of

the content ‘‘to account for cultural differences.’’ (May 5, 2000).

• Rupert Murdoch’s News Corporation has entered a joint venture with

Universitas 21, a network of 18 universities, to market custom-designed academic

programs online to working college students. (June 2, 2000)

• Cognitive Arts, a for-profit entity, is working with Harvard Business School

Publishing, a nonprofit subsidiary of the business school, to market online courses

to entering students and to other business schools and corporations. (June 9, 2000)

For all of these reasons, AAP concludes that, regardless of the good intentions underlying the Register’s legislative recommendations, they were clearly at odds with

the accompanying findings and observations based on the evidentiary record compiled by the Register. And, on the specific points discussed above, developments in

the marketplace since the Register’s Report was submitted to Congress in May 1999

continue to undercut the recommendations, inasmuch as the requisite post-access

technological protection measures are still not yet generally available for deployment in a convenient and affordable manner, and the ‘‘for-profit’’ v. ‘‘non-profit’’ distinctions among providers have—for all practical purposes—been all but obliterated

in the marketplace.

ISSUES REGARDING SPECIFIC PROVISIONS IN THE PROPOSED LEGISLATION

However, in the event that this Committee rejects the arguments presented by

AAP and decides to seek enactment of legislation embodying the Register’s proposed

amendments to the Copyright Act, AAP would urge Congress to revise S.487 so that,

in practical application, the helpful ‘‘TEACH Act’’ acronym does not come to represent the ‘‘Technology, Education And Copyright Heist Act.’’

To this end, we request that the following considerations should be clarified or

otherwise explicitly embodied in the legislation:

1. The complete exclusion of works ‘‘produced primarily for instructional use’’ (p.2,

lines 7–8) from the scope of Section 110(2), as it would be amended, is absolutely

essential to ensure, as the Register’s Report noted, that the exemption does not ‘‘significantly cut into primary markets [of educational publishers], impairing incentives

to create.’’ The exemption should not cover such works, and this exclusion should

not be limited, conditioned or qualified in any way.

2. The exemption, as it would be amended, should be applicable only to an accredited ‘‘nonprofit educational institution’’ pursuant to established standards for accreditation in the relevant educational field. In keeping with the Register’s emphasis on

tying the exemption to the concept of ‘‘mediated instruction’’ (i.e., described in the

Register’s Report as ‘‘the type of performance or display that would take place in

a live classroom setting... a use of the work as an integral part of the class experience, controlled by the instructor, rather than as supplemental or background information to be experienced independently ’’), the exemption should not apply to libraries, archives, scholarly societies, or ‘‘think tanks’’ because the activities of these entities generally do not constitute ‘‘mediated instruction.’’

3. The ‘‘display of a work’’ (p.2, line 16) should be qualified, as is the performance

of ‘‘any other work’’ (p.2, line 15), by the phrase ‘‘reasonable and limited portions’’

(or, better still, ‘‘reasonably limited portions ’’) so that it is clear the exemption does

not permit such works to be displayed online in their entiret . In a recent submission to the U.S. Court of Appeals for the Second Circuit in its consideration of New
28

York Times v. Tasini, the Register of Copyright explained that, even in the

preInternet world of 1976, Congress anticipated that the newly-established ‘‘display’’ right could displace traditional means of reproduction and delivery of copies in the

context of information networks, and understood that the ‘‘display’’ of a work online ‘‘could eventually provide libraries and individuals throughout the world with access

to a single copy of a work by transmission of electronic images.’’ Although this realization had little significance in 1976, when Congress was creating an ‘‘instructional

broadcast television’’ exemption from the display right, the expansion of that exemption to cover that right in the context of interactive digital networks could have extraordinary repercussions for the display of works which are—not excluded from the

exemption as works ‘‘produced primarily for instructional use.’’ For example, trade

books in electronic formats would be vulnerable to the broadest claims of exemption,

so that online courses in contemporary fiction or classic 20t’’ century literature could

allow readers to consume entire ‘‘best sellers’’ or a publisher’s most valuable backlist

properties in the guise of ‘‘distance education’’—cutting directly into the primary

markets for ‘‘e-books.’’ Congress must recognize the new implications of ‘‘displaying’’ a textual work or database online, and limit them accordingly, consistent with the

limited purpose in amending the exemption. In essence, this would permit a ‘‘fair use’’ display of the work online, consistent with the reasonable expectations of both

the copyright and user communities. The failure of Congress to recognize the importance of this issue could have dire consequences for the nascent ‘‘ebook’’ market and

for such diverse new related services as those provided by netLibrary

(www.netlibrary.com), Ebrary (www.ebrary.com), Questia Media (www.guestia.com/

guestia.html) and others. If, as in the case of a photograph, painting or even a short

poem, Congress believes it is appropriate and not a danger to the copyright owner’s rights to permit the online display of the entire work, these considerations should

be explicitly delineated in the exemption (e.g., perhaps through reference to codified

terms such as ‘‘graphic, pictorial or sculptural works’’). (See further discussion below

regarding the ‘‘class session’’ language on p.3, line 2).

4. The statutory language should make clear that the exemption, as it would be

amended, applies only to copies of a work that are already in digital form, and does

not authorize the digitization, for example, of a print book through scanning (which

would involve the exercise of the ‘‘adaptation’’ right). We understand this is the Register’s intention as embodied in the explicit, limited authority under Section 112 of

the Copyright Act, as it would be amended, to make copies ‘‘embodying the performance or display to be used for the purpose of making transmissions authorized under

Section 110(2).’’ However, the lack of authorization to digitize should be made explicit in the statutory language.

5. In addition to the requirements that the ‘‘transient copies’’ authorized under

Section 110(2), as it would be amended, must be ‘‘created as part of the automatic

technical process of a digital transmission’’ (p.2, lines 18–19) and ‘‘retained for no

longer than reasonably necessary to complete the transmission’’ (p.3, lines 15–17),

the exemption should explicitly require that such copies must be non-accessible and

secure against interception or reproduction. This will make the treatment of ‘‘transient copies’’ under this section more consistent with the treatment of such copies

under Section 512 of the Copyright Act.

6. It is our understanding that, consistent with the previous discussion of the ‘‘mediated instruction’’ concept in point 2 above, the language on p.3, line 2 referring

to ‘‘an integral part of a class session’’ is intended to ensure that the online display

of a work pursuant to the exemption, as it would be revised, is limited to reasonable

portions of such work as would be used in a typical, off-line live class setting, rather

than the entire work. This should be clarified by amending the cited phrase to refer

to something like ‘‘an integral part of a class session, and in no larger portion than

might reasonably be expected to be used in a single such session. . .’’ Once again,

the point is to generally bar the online display of a work in its entirety.

7. With respect to the requirements in paragraph (E) concerning the ‘‘policies regarding copyright’’ which must be instituted by the transmitting body or institution,

a requirement should be added for adoption of a policy and procedure regarding termination of those who abuse this exemption to engage in repeated copyright infringements, and to require that those who rely on this exemption must affirmatively respond to ‘‘standard technical measures’’ of the kind used to protect copyright

and referred to in Section 512(i) of the Copyright Act. Congress should also compare

the requirement to ‘‘provide informational materials to faculty, students, and relevant staff members that accurately describe, and promote compliance with, the

laws of the United States relating to copyright’’ to a similar requirement for universities seeking to limit their liability for copyright infringement under Section

512(e)(1)(C) of the Copyright Act, and assess compliance with the latter requirement.
29

8. With respect to the requirement to apply ‘‘technological measures’’ on p.4, line

5, the legislation should clarify what is intended by the phrase ‘‘reasonably prevent’’

and should provide some objective criteria for evaluating compliance. In addition to

‘‘unauthorized access to and dissemination of the work,’’ the provision should require that such measures must also ‘‘reasonably prevent’’ unauthorized

downloading, printing or otherwise copying of the work as well. In its current form,

the proposed legislation provides no mechanism or standard for enforcing the requirements relating to technological measures, or any other requirements of the exemption, as it would be amended. The requirements are meaningless without a

meaningful capability to enforce them.

9. The requirement at p.4, lines 8–10, to ensure that the transmitting body or institution ‘‘does not intentionally interfere with technological measures used by the

copyright owner to protect the work’’ sets an impossibly high evidentiary standard

for proving violations. The word ‘‘intentionally’’ should be deleted from the cited

phrase to establish an affirmative obligation to not interfere; if this is unacceptable

to Congress, then, at a minimum, the requirement should be amended to require

that the body or entity ‘‘do nothing that reasonably could be expected to interfere’’

with such measures. This would at least provide an objective standard by which to

assess compliance.

10. In addition to the requirements already in the proposed legislation, State entities that assert the exemption, as it would be amended, should be considered with

respect to such transmissions to have waived their Eleventh Amendment sovereign

immunity for purposes of any related copyright infringement lawsuit concerning the

transmitted performance or display of a copyrighted work. Without such a requirement, such entities may feel little obligation to comply with the ‘‘technological measures’’ or other limiting requirements of the exemption, given their current immunity

from damage suits for copyright infringement under recent Supreme Court rulings.

11. With respect to the U.S. Copyright Office’s implementation of requirements for

a report and conference under Section 4 of the proposed legislation, it would be appropriate to add such matters as the treatment of technological measures in digital

distance education programs and other matters of concern to copyright owners with

respect to such programs, so that implementation is based on a balanced examination of the concerns of owners and users of copyrighted works in digital formats.

CONCLUSION

As documented in the Register’s Report and through subsequent developments

during the past year, the marketplace for producing high-quality content for Internet-based higher education programs is a diverse, dynamic and expanding world of

evolving experimentation, collaboration and innovation. Rapid technological change

is producing revolutionary rethinking of business and academic models, related institutions, and the whole educational enterprise.

While providers may occasionally have problems with copyright and related licensing issues, these instances are the by-product of marketplace ‘‘growing pains,’’

rather than the result of inadequate copyright law, and have in no way denied

Internet providers of higher education the opportunity to produce exciting new educational experiences for a broad range of students through digital technologies.

If Congress is looking for ways to ensure the availability of high-quality digital

content for Internet-based ‘‘distance education,’’ AAP believes that it should express

its largesse through the provision of funding, tax credits and other financial means

of support to various public and private entities for the production and acquisition

online educational content. Otherwise, there is ample time and reason to let the

flexibility of the marketplace, with the inherent checks and balances of competition,

work out continuing copyright and content quality issues without the intrusion of

government mandates. As long as legal copyright protections are adequate to meet

the needs of such new applications, AAP believes that policy-makers can look to the

marketplace to solve most other problems.

If, however, Congress determines to go forward with legislation based on the Register of Copyright’s recommendations regarding the revision of Sections 110(2) and

112 of the Copyright Act, AAP urges Congress to make the clarifications discussed

above and to call upon the AAP for assistance in ensuring that the resulting legislation properly balances the interests of owners of copyrighted works with those of

the users of such works.

Chairman HATCH. Thank you so much.

Mr. Siddoway, we will turn to you.
30

STATEMENT OF RICHARD M. SIDDOWAY, PRINCIPAL, UTAH

ELECTRONIC HIGH SCHOOL, SALT LAKE CITY, UTAH

Mr. SIDDOWAY. Thank you, Senator Hatch, Senator Leahy.

Utah’s Electronic High School began as a brain child of Governor

Michael Leavitt about 8 years ago, and during the last 6 years we

have brought it into partial fruition. We serve four major groups

of students: those who have failed a class and want to make up

credit, those who wish to take classes they are unable to take at

their local high schools, those who wish to take extra credit and

graduate early, and those who are home-schooling.

We deliver in three basic ways: broadcast television to PBS channels that public education owns time on; on a two-way voice video

data system called EDNET—there are about 200 EDNET studios

at 165 locations across the State; all of the public universities, colleges, applied technology centers, and most high schools have

them—and then on the Internet. The classes that are delivered on

both broadcast television and the EDNET system are synchronous

in nature with definite beginning and ending dates. The Internet

courses are not for the most part. It has grown significantly in the

6 years.

In concert with that—and I have more of that in the written testimony, but in concert with that we have also begun delivering college and university courses across the State, and that has grown,

as Mr. Adler suggested, fairly exponentially in the last few years.

Last year, some 8,000-plus students across the State had their

courses delivered to them through distance learning.

Now, we are in perfect congruence with what Ms. Peters said

concerning the regulations that should be in place. We believe, just

as we have in face-to-face instruction, we should have any of this

material an integral part of the curriculum. The only thing we

would like to do is to be able to distribute it in a distant learning

situation.

All of our classes are controlled to access. There are password

controls on the Internet. Obviously, in an EDNET situation you

have to be in a place where there is an EDNET studio. Even the

broadcast television courses—in order to obtain credit, you have to

have registered through a university and through a high school,

most of them being concurrent enrollment.

So we encourage the adoption of the TEACH Act. It would free

us to enhance the courses that we are offering across the State of

Utah. In 11 months, Utah will welcome the world with the 2002

Olympics. With the Electronic High School, we have begun welcoming the world already. Our most distant student is in Ulan Bator,

Mongolia.

We appreciate the work that you are doing.

[The prepared statement of Mr. Siddoway follows:]

PREPARED STATEMENT OF RICHARD M. SIDDOWAY, PRINCIPAL OF UTAH’S ELECTRONIC

HIGH SCHOOL

Utah has a unique demography. Of the two and one quarter million residents,

nearly 85% reside in an area called the ′′Wasatch Front,′′ which is a narrow strip

of land between the west slope of the Wasatch Mountains and the shores of the

Great Salt Lake and Utah Lake. Salt Lake City, Ogden, Provo, and the cities and

towns between comprise this area of the state. Conversely, the other fifteen percent

of the state’s population are distributed over 90% of the state’s area. The original
31

mission of distance learning in Utah was to serve that widely dispersed rural population.

With that population in mind, Governor Michael Leavitt proposed that Utah develop an electronic high school that would deliver all of the secondary curriculum

throughout the state. The nine state operated colleges and universities were likewise charged to deliver courses to rural Utah. However, it quickly became obvious

that Wasatch Front students were also able to benefit from electronic delivery.

The Electronic High School serves four major groups of students: those who have

failed a class and need to make up credit, those who wish to take a class not offered

at their school, those who wish to take additional classes to accelerate graduation,

and those who home school. We deliver our courses using three different media:

broadcast television, a two-way voice/video/data system (EDNET), and over the— Internet,

The broadcast television courses are generally concurrent enrollment courses

where students earn both high school and college credit concurrently, They are

taught by college or university personnel. These classes are synchronous—that is,

they have a definite starting date and stopping date.

The EDNET courses are delivered either by microwave, T–1 line, or fiber optic

line to about 200 studios in 165 high schools, applied technology centers, colleges,

universities, and a few scattered additional sites. A typical studio has two or more

television sets, two or more cameras, a computes, and a tax machine. The teacher

is located in one studio and students are located in two or more other EDNET locations. These classes are also synchronous.

The internet classes are typically asynchronous. Students may begin on any given

day and work at their own pace. There are a few exceptions, such as our English

courses that begin each eight weeks in order to keep a cadre of students together

for interaction. By September of this year we will have all thirty secondary core

courses available with twenty additional courses under development.

All of these services travel through the Utah Education Network (UEN) facilities

housed at the Eccles Broadcast Center on the University of Utah campus. UEN also

handles High Education’s electronic traffic.

Higher education’s delivery of classes differs froze the Electronic High School in.

a significant way. They are delivering distance-learning courses for original credit

only. With only nine state-supported colleges and universities, the distance-learning

network reaches into remote areas of Utah with great success. Utah State University has an extensive network of distance-learning satellite reception sites that have

been positively augmented with EDNET studies. Bait Lake Community College,

Utah Valley State College (Provo/Orem), and Southern Utah University (Cedar City)

have begun aggressively producing Internet delivered classes

The numbers of students served during the past academic year

include:

The Electronic High School ............................................................ 37 broadcast television classes

168 EDNET classes

12 Internet classes

Total enrollment—32,000 credits (equivalent to a 4,600 student

high school)

Higher Education ............................................................................ 35 broadcast television classes

233 EDNET classes

181 Internet

Total enrollment ............................................................................. 8,134 students

Each of the courses taught, whether in public or higher education, is comprised

of a finite number of students with access to the class controlled by password or

student enrollment—Students who take classes delivered by broadcast television

must enroll with a college or university in order to have credit recorded. Similarly,

they must have received permission from a high school counselor in order to receive

high school credit.

Students who enroll in EDNET courses must have access to an EDNET studio.

The numbers of students enrolled are similar to those in a face-to-face teaching situation.

Students who enroll in internet courses go through a password-protected portal

to enter the class. The numbers are controlled and access to materials limited by

the teacher.

The benefits of distance learning are many and varied. Perhaps the most significant benefit is the availability of courses to students who live in remote areas of
32

the state. An example would be West Desert High School in Trout Creek, which has

a total 7th through 12th grade population of 29. Although this school does not have

a level-4 licensed math teacher, every senior was able to take calculus last year

through distance-learning.

The Electronic High School is developing foreign language courses in Spanish,

French, German, Japanese, Russian, and Arabic. Each of these courses draws on native speakers who can be accessed over the internet, The Navajo Nation is also developing courses in the Navajo language that well be accessible electronically.

Distance education levels the playing field for students across the state. It does

not matter whether they are in a densely populated urban area or a sparsely populated rural. setting, every class is available to them

The flexibility we .rseod i.s to be a.ble to treat each distance learning class as if

it is, in fact, face-tofare anstmction with the earns fair use guidelines we enforce

in traditional classrooms. We are fully in support of S. 487.

Chairman HATCH. Well, thank you, Mr. Siddoway. We appreciate

you.

Mr. LeBlanc?

STATEMENT OF PAUL LEBLANC, PRESIDENT, MARLBORO

COLLEGE, MARLBORO, VERMONT

Mr. LEBLANC. Mr. Chairman, Mr. Leahy, thank you for the opportunity to offer testimony on the TEACH Act.

I would like to just offer a little bit of brief background on Marlboro College. We have used distance education to reach beyond our

relative remoteness, our geographical remoteness, to create and extend programs in ways unimaginable to us just 10 to 15 years ago.

We offered the country’s first e-commerce degree program 3 years

ago, and have since expanded to work with engineers and educators. We offer a combination of wholly online programs and hybrid programs, programs that ask students to work online with

their instructors for 2 weeks at a time and then travel to Vermont.

We just returned from Europe, where we are about to pilot a new

program that will simultaneously serve learners in Europe, the

Middle East, Africa, and India at the same time.

Our distance learning programs and activities have also become

the core of a number of other important initiatives in southern Vermont, including a new technology incubator and work in open

source courseware. One of the great strides really in the last 10

years in distance learning has been the creation of extremely powerful online learning environments, and one of the things that

makes those learning environments as powerful as they are is the

ability, in combination with broader bandwidth, to offer rich media

to students at a distance.

Turning to the specifics of the TEACH Act, we applaud the elimination of current eligibility requirements having to do with physical classrooms. The essential and core benefit of distance education is to free learners from traditional constraints of time and

space.

Our students come to Marlboro every other weekend, and in the

intervening 2 weeks they are widely and geographically distributed. They go online at a variety of times. They do it from a variety

of places, including their offices and often at home, at night, when

the kids are tucked in, the dishes are picked up, and they finally

can turn to their learning experience.

To the extent that distance education can help us control the cost

of higher education, an ongoing issue, insisting on the provision of
33

physical classrooms for online delivery is simply out of step with

how it happens and it is simply out of step with any attempt to

try to control those costs.

The second proposal of the TEACH Act that we would like to address has to do with transmission. The proposal seems to us a common-sensical response to some basic tenets or facets of network topography. Our students at any given time are working from home,

as I mentioned before, and for them to download material, that material literally hits in some cases thousands of servers, passing

their way through the network until they arrive at the student’s

own computer and cache.

We see no basic threat to copyright in this basic condition of how

networks operate. Caches are routinely flushed. As many of you

know, servers are often maintained and flushed on a 2-hour basis.

In combination with the use of portions of rich media materials,

which is pointed out later, and also the fact that most of our providers have access passwords—we are protecting our markets in

some ways, and the combination of those aspects, we think, serve

to address the concerns of copyright owners in this matter.

The exemption regarding the use of various media is also extremely important to us. We certainly respect the anxiety that

copyright owners feel over control of their properties, but we see no

legitimate threat in the regular use of portions of those materials

for the purposes of instruction.

We have had any number of examples in our own work where

we have come up against what we think are too rigid restrictions

on use. For example, a few years ago, in teaching a Shakespeare

class we had students creating multimedia presentations on a number of plays. In one case, a student wanted to use 15 seconds from

Kenneth Branaugh’s ‘‘Henry V.’’ It took us almost 2 weeks to track

down the right person with whom to speak, and when we finally

had that conversation they reported back to us that it would cost

the student $2,000 for a one-time use of that video.

More recently, we have a student in our graduate class who has

done a wonderful presentation for a marketing online course, but

could not share that with his students in a study group because,

again, he had to wait until they arrived on campus 2 weeks later.

I would like to show it to you very quickly, and I will show you

the piece that was in question.

[Video shown.]

Mr. LEBLANC. The approximately 8 seconds of audio you heard

was the audio in question. We could not use it in the instructional

setting. We think that no reasonable even practiced Napster user

would be interested in such a short clip from a popular piece of

music.

At the K–12 level, I think the issue is even more pressing. We

have students working in a master of arts in teaching program,

and in one case a teacher of a graduate student who wanted to use

a small portion of the Magic School Bus program tried to track

down licensing, in this case had to turn to the MPLC, and in this

case the fees were between $2 and $8,000, depending on the length

of the clip.

By the way, again, the interaction took more than 2 weeks and

really mitigates against any timely and responsive instruction for
34

classroom teachers. We think this is a tremendous issue, actually,

in K–12, a more pressing issue.

Lastly, we would like to turn to and applaud the reiteration of

the Kerrey Commission’s call for agreed-upon guidelines for fair

use of digital materials.

Senator Leahy [presiding]. Mr. LeBlanc, I don’t want to interrupt, but we are going to have votes scheduled. I don’t want to cut

into Mr. Carpentier’s time.

Mr. LEBLANC. The last piece, only that we do see a need for clarification on this. We do believe there are many good resources available. We use them in training our own teachers. They exist at the

college level. They don’t exist in K–12.

Thank you.

[The prepared statement of Mr. LeBlanc follows:]

PREPARED STATEMENT OF DR. PAUL LEBLANC, PRESIDENT, MARLBORO COLLEGE, MARLBORO, VT

Thank you Mr. Chairman, Senator Leahy.

I’d like to begin with some background on the Graduate Center of Marlboro College, an innovative branch of our institution that provides internet-based curriculum

to working professionals.

Three years ago, we introduced the first e-commerce degree in the nation, followed

quickly by two additional graduate programs for engineers and educators. In addition, we’re preparing to launch a wholly online Internet Teaching Certificate program that will target K–12 teachers specifically. Given our programming, the proposed TEACH legislation is of great interest to us and we applaud your extensive

work with the Office of Copyrights to enact these minor changes that will so greatly

expand what our students are able to accomplish in their studies.

Other activities of The Graduate Center have included innovative partnerships

and software development to foster a richly-interactive, comprehensive virtual learning environment.

The software environment that our designers have created is capable of supporting rich media; however, it is currently underutilized due to the prohibitive expense

and paperwork involved in licensing and distributing copyrighted materials for use

in distance instruction.

I’d like to pause for a moment to address the technological aspects of transient

copies. As many of you know, a network server must send digital packets to literally

hundreds of servers before it reaches the intended recipients through the world wide

web. However, servers that receive intermediate copies routinely have their memory

cache flushed, the remnants of those data are often incomplete, and if the proposed

amendments are approved, at best, ‘‘hackers’’ would obtain unauthorized access to

small excerpts of rich media, which, out of the context of instruction, are essentially

so devoid of value as to be an insignificant threat to primary markets for the source

materials.

Although this transmission technology is also safeguarded by the provisions of secure servers, encryption, and user passwords, we are still experiencing the frustration of not being able to serve our distant students as fully as we are currently able

to serve their residential counterparts who can attend in a ‘‘traditional’’ classroom.

One example that comes to mind from my personal experience was the request

to use a small excerpt from the Branagh version of a Shakespeare play, which would

have taken months of paperwork and thousands of dollars to accomplish. Unfortunately for our students, I abandoned a sound pedagogical plan because of the obstacles.

An example taken from our graduate courses demonstrates clearly as well, the ongoing struggle between valid instructional use of copyrighted materials and the restrictions against using sound recordings in our online courses.

As this marketing student’s campaign illustrates, the inclusion of just 8 seconds

from the licensed popular song ‘‘Everybody Dance Now’’ has now rendered an otherwise excellent model of instructional excellence in developing an effective campaign

inaccessible to our distant students.

We see this disadvantage even more dramatically at the K–12 level, where one

of our education students was interested in obtaining a segment of the popular

‘‘Magic School Bus’’ science series, the production of which is co-sponsored by the

NSF. The teacher found that the process and expense of obtaining license from the
35

MPLC were both prohibitive and prevented the delivery of timely instruction in an

innovative delivery system.

Finally, in closing we’d like to applaud the Senators’ provisions of copyright education resources to all students and faculty members who engage in distance learning environments. At Marlboro College, we are grateful to the Library of Congress

for its excellent website, filled with educational resources to which we regularly

refer our teachers and students in their coursework. In addition, we refer our faculty specifically to the ‘‘Crash Course in Copyright’’ website hosted at the University

of Texas, in Austin.

Thank you for your attention, Mr. Chairman, Senator Leahy.

Senator LEAHY. Thank you very much. As you know, I have visited up there and I am very impressed with what you are doing.

Professor Carpentier? We would say in Vermont Carpentier. How

do you pronounce it?

Mr. CARPENTIER. Both.

Senator LEAHY. Both, OK. Go ahead.

STATEMENT OF GARY CARPENTIER, ADJUNCT PROFESSOR OF

LAW, WASHINGTON COLLEGE OF LAW, AMERICAN UNIVERSITY, WASHINGTON, D.C.

Mr. CARPENTIER. It is a great privilege to speak to you today

about the Technology, Education, and Copyright Harmonization

Act of 2001. I am Gary Carpentier, Adjunct Professor of Law at the

LL.M. Program in International Legal Studies at the Washington

College of Law. My views here today are my own and not the views

of the College of Law.

Together with my colleague, Professor James Holbein, the Washington College of Law is creating an Internet-based law course on

the North American Free Trade Agreement. The Washington College of Law has created a consortium of nine different schools on

the North American continent—Case Western Reserve University

School of Law and University of New Mexico School of Law in the

United States, three schools in Mexico, and three schools in Canada.

This legislation comes at an important juncture in the evolution

of distance education. Traditional teaching techniques have been

outpaced by the opportunities in an online world. The Act strikes

a balance between the creators and the holders of the copyright

and those seeking to use such works in education and research. It

broadens the existing definitions of reproduction and distribution

rights, and it modifies our reality and our concept of permitted

transmissions under existing exemptions and the fair use doctrine.

The debate continues between copyright-holders and users, and

how technological advances work for both groups and satisfy their

needs. Content owners can be secure in knowing that there are

limitations in place to assure that their works will not be otherwise

commercially exploited. Educators will employ this legislation as a

guideline to permissible activities within such limited and reasonable uses of expanded categories without the chilling effect of negotiating a license for every type of transmission.

The bill preserves many of the underlying policy objectives and

the intent of traditional systematic education or classroom experience. Even though transmissions are not limited to the physical

classroom, the bill includes safeguards of restricting the classes of
36

eligible recipients to those students and employees enrolled in

courses in which such transmissions are made.

In the design of our online NAFTA course, we have to consider

the evolution of the current copyright regime. This legislation will

make our job easier to allow us to stay on the cutting edge of technology, and thereby providing the best education for our students

in all nine law schools in the consortium.

It was also useful to examine the relationship of this proposed

legislation on our international trade agreements. It is my opinion

that S. 487 should not violate our obligations under international

intellectual property agreements.

The Berne Convention provides for the copying of the portions of

work that have already been made available to the public if it is

within the guidelines of the fair use doctrine and does not exceed

the justified purpose. In addition, it is a matter of domestic law to

determine the use of works protected by copyrights for teaching

purposes.

The WTO Agreement on Trade-Related Aspects of Intellectual

Property Rights, generally known as TRIPS, provides that exceptions to the copyrights must be limited to special cases that do not

conflict with the normal exploitation of the work and do not unreasonably prejudice legitimate interests of the rights-holders. In establishing the right to use limited portions of copyright works for

teaching purposes, this legislation falls within the parameters of

these international obligations.

In the interests of time, I would like to conclude that the Act has

embodied recommendations suggested by the U.S. Copyright Office

Report on Copyright Law and Digital Distance Education. It promotes digital distance learning by permitting certain limited instructional activities to take place without the risk of copyright infringement, and encourages the transmitters of such information to

inform its users about the proper use of copyright laws.

This legislation will greatly enhance the use of cutting-edge technologies such as public and private key encryption techniques to restrict the retransmission of documents, books, streaming music,

and streaming video clips, digital certificates that authenticate the

identity of users, as well as digital watermarks that help track location and use by unauthorized users.

I look forward to working with the Committee to help enact this

legislation into law. It is critical that we respond with solutions

that enable our citizenry. I am in particular support of Chairman

Hatch’s suggestions and reforms that allow students to take a

lighter class load than is now required to benefit from financial aid.

Imagine the opportunities and the impact that non-traditional students such as working mothers and lifelong learners will be able

to take advantage of such online offerings.

We must enable smaller institutions to out-source Web service to

enable them to join the online educational community. They must

be able to overcome the barriers to entry to this market. They must

be able to access infrastructure, capital, and human resources. Altogether, this makes for a formidable package of reforms to promote the use of the Internet in educational offerings to all American students, no matter what age or locale—access to the best education anytime, anywhere.
37

I want to thank Chairman Hatch and Senator Leahy for this opportunity to testify before you today.

[The prepared statement of Mr. Carpentier follows:]

PREPARED STATEMENT OF PROFESSOR GARY CARPENTIER, ADJUNCT PROFESSOR OF

LAW, LL.M., PROGRAM IN INTERNATIONAL LEGAL STUDIES, THE WASHINGTON COLLEGE OF LAW, THE AMERICAN UNIVERSITY, WASHINGTON, DC

Thank you Chairman Hatch, Senator Leahy, distinguished Senators and colleagues, it is a great privilege to speak with you today about the ‘‘The Technology,

Education and Copyright Harmonization Act of 2001’’. lam Gary Carpentier, Adjunct

Professor of Law in the LL.M. Program of International Legal Studies at The Washington College of Law at the American University here in Washington, DC. The

views that I am presenting here today are my own and not those of The Washington

College of Law.

Together with my colleague, Professor James Holbein, the Washington College of

Law is creating an Internet based law course on the North American Free Trade

Agreement. The Washington College of Law has created a consortium of nine law

schools on the North American continent that will present this course. Case Western Reserve University Law School and the University of New Mexico School of Law

in the United States, three university law schools in Canada and three in Mexico.

This legislation comes at an important junction in the evolution of digital distance

education. It embraces the need to adapt to new technological advancements in information delivery and educational synthesis. Traditional teaching techniques have

been outpaced by the opportunities in an online world.

The Technology, Education and Copyright Harmonization Act of 2001 strikes a

balance between the rights of the creators and holders of the copyright and those

seeking to use such works for education and research.

S. 487 broadens existing definitions of reproduction and distribution rights. It

modifies the reality of our concept of permitted transmissions under existing exemptions and the fair use doctrine.

The debate continues between copyright holders and users about how can technological advances work for both groups and satisfy their needs. Content owners can

be secure in knowing that there are limitations in place to assure that their works

will not be otherwise commercially exploited. Educators will employ this legislation

as a guideline to permissible activities within such ‘‘limited and reasonable’’ uses

of expanded categories without the chilling effect of negotiating a license for every

type of transmission.

The bill preserves many of the underlying policy objectives and intent of the traditional systematic educational or classroom experience. Even though transmissions

are not limited to a physical classroom, the bill includes the safeguard of restricting

the classes of eligible recipients to those students and employees enrolled in courses

in which such transmissions are made.

I feel that the Committee should seek more meaningful and contemporary criteria

for eligibility requirements of institutions seeking any exemption under the contemplated legislation. Bona fide educational institutions are no longer limited to

‘‘non-profits’’. While accreditation status advances the analysis, it still leaves many

questions unanswered. Until standards become more uniform, this is our most rational starting point. We can no longer theorize how a system ‘‘should’’ work. We

must put theory into action.

In the design of our online NAFTA course, we had to consider the evolution of

the current copyright regime. This legislation will make our job easier and allow us

to stay on the cutting edge of technology and thereby providing the best possible

education for students in all nine law schools in the consortium. They are: The

Washington College of Law; Case Western Reserve University Law School; The University of New Mexico School of Law; University of Ottawa; Universite de Montreal;

University of Western Ontario; Universidad Nacional Autonoma de Mexico (UNAM)

in Mexico City; Universidad de Guanajuato in Guanajuato; and Universidad de Baja

California (UABC): Tijuana.

It is also useful to examine the relationship that this proposed legislation has on

our international trade agreements. It is my opinion that S. 487 should not violate

our obligations under international intellectual property agreements. The Berne

Convention provides for the copying of portions of a work that has already made

available to the public, if it is within the guidelines of the fair use doctrine and does

not exceed that justified purpose. In addition, it is a matter of domestic law to determine the use of works protected by copyright for teaching purposes. The World

Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual
38

Property Rights, generally know as the TRIPS Agreement, provides that exceptions

to copyrights must be limited to special cases which do not conflict with a normal

exploitation of the work and do not unreasonably prejudice the legitimate interests

of the rights-holder. In establishing the right to use limited portions of copyrighted

works for teaching purposes, this legislation falls within the parameters of these

international obligations.

This legislation is consistent with the Berne Convention and the TRIPS Agreement. It is confined to the non-commercial use of some aspects of copyrighted works,

for teaching and research purposes only. This is a very different situation than the

disputes that have arisen under the TRIPS Agreement. For example, Canada permitted one of its cable television channels to receive and re-broadcast country music

without paying the appropriate license fees to U.S. rights holders. A resolution to

that dispute was reached under the NAFTA Chapter 20 consultation process. This

situation is different from the limited, non-commercial, educational uses of protected

works already covered by Sections 107 and 110 of the Copyright Act.

Under U.S. law the doctrine of ‘‘fair use’’ in Section 107 covers the activities envisioned in the legislation. Section 110, which is being amended, already permits the

use of these types materials for teaching purposes. Typically, educators are reasonably careful to obtain copyright permission when using portions of protected works

for classroom presentation, handouts, textbooks, etc. That practice is not discouraged by this legislation. Rather, this Act will help to ensure the free exchange of

ideas within the contemplated in the U.S. Constitution in article I, section 8. where

it states, ‘‘Congress shall have the power to promote the progress of science and useful arts....’’ In order to stay competitive in a global economy, we must foster

‘‘anytime, anywhere learning’’ to fit the needs of young people and lifetime learners.

I look forward to working with the Committee to help enact this legislation into

a law. It is critical that we respond with solutions that enable our citizenry. I am

in particular support of Chairman Hatch’s suggested reforms that allow students

who take a lighter class load than is now required benefit from financial aid. Imagine the opportunities and impact that would have on non-traditional students, such

as working mothers and lifelong learners to be able to take advantage of online offerings. We must enable smaller institutions to outsource web services to enable

them to join the online educational community. They must be able to overcome the

barriers to entry to the market. They must be able to access infrastructure, capital

and human resources. All together, this makes a formidable package of reforms to

promote the use of the Internet in educational offerings for all American students,

no matter what age or locale. Access the best education, anytime, anywhere.

I want to thank Chairman Hatch and the Committee for this opportunity to testify before you today.

Senator LEAHY. Thank you.

We will hold for just a moment.

Senator Hatch is back.

Chairman HATCH. I apologize for having to leave for a minute.

Let me just ask a few questions.

Mr. Siddoway, you mentioned how the Electronic High School

serves students with special needs in Utah, including those who

cannot get to class because they either have a disability that keeps

them from school or they live far enough away from the school that

offers that particular class.

Could you tell us how important making these classes available

online is to those students and tell us how you think audio-visual

or sound recording components to a language class or a science

class offered on the Internet would enhance the learning opportunities of those students in Utah and elsewhere?

Mr. SIDDOWAY. Thank you for that question. As you may be

aware—I know Senator Hatch is—Utah is a fairly rural State. We

have 2.25 million people. Of those 2.25 million people, 85 percent

of them live on a 75-mile strip, on what we call the Wasatch Front,

the west slope of the Wasatch Mountains. The rest of the State is

fairly rural, and 90 percent of the geography of the state houses

that 15 percent.
39

We are delivering courses to such diverse places as Trout Creek,

West Desert High School, with a total 7–12 population of 29; to

Navajo Mountain that you cannot reach from Utah. You go into Arizona to get back to Navajo Mountain. All of those classes are enhanced.

We are video streaming and we are audio streaming now. For example, we have a Navajo language class beginning in Blanding,

Utah. Of course, Navajo was the one code that the Japanese did

not break during the Second World War. It is a difficult language,

and if we are not able to audio stream it—and, of course, we are

doing it with Native speakers, so that is available. A number of

these courses could benefit greatly if we could use commercially

prepared material and have the rights to use portions of it over the

Internet.

Chairman HATCH. I see.

Mr. Carpentier, as a lecturer and course designer, do you think

our legislative efforts that we are offering here will significantly

help promote the use of high-technology tools like the Internet in

education?

Mr. CARPENTIER. It gives the ability of a teacher to create compelling courses, hyperlinks that can access resources, music clips,

video clips. The copyright laws as they are framed within your legislation helps the less savvy copyright user to create new and interesting course work. It is really important that they can use this as

a guideline and can take advantage of this opportunity.

In addition to giving this copyright a safe harbor, I think it is

important to highlight the reforms that you mentioned in your

opening statement, and that is to give access to institutions and

students within the system. Smaller institutions need access to infrastructure, capital, human resources.

Non-traditional learners such as working mothers, people in

rural settings, also need access to the system. This legislation gives

those folks that ability to learn anytime, anywhere, and I think it

is really important that we all work together to come up with a solution immediately to stay competitive.

Chairman HATCH. Well, thank you.

In addition to chairing this Committee, I chair the Trade Subcommittee of the Finance Committee, as well, and I have long been

concerned about effective copyright protection abroad.

Ms. Peters, I am a strong supporter of the TRIPS agreement.

Would an expanded section 110(2) exemption be consistent with

our obligations under the Berne Convention and the WTO TRIPS

agreement?

Ms. PETERS. Professor Carpentier basically said that he thought

that it would not violate our international agreements, and I clearly think it does not. The way that the TRIPS agreement is worded,

you can have exceptions or limitations if there are certain special

cases and if they don’t conflict with the normal exploitation of the

work and don’t unreasonably prejudice the legitimate interests of

the rights-holder.

Clearly, systematic instructional activities is a very limited, special case. I think the safeguards that are put in here with regard

to who can get the work and the reasonable and limited portions

for audio-visual works on sound recordings, as well as the require-
40

ment for technological protection measures, clearly make this an

exception that would pass muster.

Chairman HATCH. Mr. Heeger—and the other representatives of

educational institutions can also address this if they wish—do you

now employ in your Internet offerings access and copy controls, and

do you believe most educational institutions could comply with the

requirements of this bill to implement such controls?

Mr. HEEGER. Mr. Chairman, quality distance education carries

the obligation on the part of the provider to provide extraordinary

and deep services to the students, and to provide controls as well

on the copyrighted material. At my university, we have put a great

deal of effort in terms of copyright management programs. We have

an extensive licensing program and we have an extensive program

of access control.

Nonetheless, I think managing those issues is onerous, and institutions have to learn a great deal in order to do it. We are committed to complying with all the regulations. I have found in my work

across the country all of the institutions that I am working with

are equally committed to complying with all of the regulations, and

I have no doubt as copy control techniques become more and more

available, those too will be eagerly embraced. Institutions need

clear rules of the road so that they can function effectively in developing distance education.

Chairman HATCH. Thank you, Mr. Heeger.

My time is up.

Senator Leahy?

Senator LEAHY. Thank you, Mr. Chairman. I notice in Mr. Adler’s testimony he speaks of our legislation as being unworkable,

and if it continues as it is that apparently Senator Hatch and I are

involved in a theft. He would call it the Heist Act. At another time,

I used to prosecute thieves. I have never been accused of being one.

I have a great deal of respect for both Mr. Adler and the publishers, but I think that this may be protesting a bit much. I totally

disagree with him, but he may draw that conclusion.

Ms. Peters, do you think this legislation is unworkable?

Ms. PETERS. No. Obviously, we wouldn’t have proposed it if we

thought it was unworkable. I think it is carefully crafted. I think

that the concerns that Mr. Adler spoke of—his concern about having full text available, his concern that it interfered with licensing

markets—are concerns, but I do think that the way that this is

crafted, those markets are preserved and the technological protection measures will take care of a lot of the concerns that he has.

Senator LEAHY. Thank you.

Yesterday, 18 leading high-tech CEOs sent a letter to the President and also to the Congressional leadership, and they said that

improving the Nation’s education system must be a national priority. Teachers and students have to have a high-quality curriculum;

they have to have sustained professional development, particularly

in math, science and technology skills.

I happen to totally agree with that, and I think that if we are

going to compete with the rest of the world, we have got to do

much, much better than we are currently doing. I know this is not

news to Mr. LeBlanc, as President of Marlboro College. As his tes-
41

timony shows, they have begun offering a graduate program for

teachers on how to use the Internet for instruction.

A lot of the focus of the distance learning debate has been on college and adult-level education, and computers and the promise of

distance learning, the opportunity of students at any age. I am concerned with small schools, and I am thinking of one.

Paul, I don’t know if you know it, but in Granville, Vermont,

there is one of the very few one-room schoolhouses still existing. It

is one of the schools I go online with all the time because the kids

ask such great questions. Some of them go on to become Merit

Scholars. Many of them have gotten scholarships to some of the

most prestigious universities in our country.

But I worry that they are not near a college; they are not near

a university. They are down in a small forestry product community,

and I wonder if they could end up either misusing digital information or not taking full advantage, out of fear that they may

overstep their bounds. They are not going to have lawyers on staff

to tell them what they can or cannot do.

One of the things that Senator Hatch and I thought about in the

TEACH Act is we want a conference that will try to provide easy

to understand guidelines for schools in the use of copyrighted

works, so somebody can just go out and say, yes, no, can I do this,

can I not do this. Would this be helpful in small schools, elementary schools, I mean the kinds of things that you and I are familiar

with in our own State of Vermont?

Mr. LEBLANC. It would be extremely helpful. Teachers often in

those rural, more isolated schools don’t have access, as you have

pointed out, to these sorts of guidelines. We could do a better job

of creating guidelines that fit more precisely the K–12 context, and

then I would argue those guidelines should be available in the

training which gets teachers to use them and understand how to

use them and where they are. And they can be made simple. We

think there are ample models out there now, by the way, as I said

at the end of my testimony. We think it is important piece.

Right now, what we are seeing is that access and cost of technology is outstripping the ability to deliver rich content to kids;

that is, schools are being wired, the cost of boxes or computers are

coming down. Yet, it is very difficult for our teachers, the teachers

we are training, to easily get access to content and to do it in an

affordable manner.

Senator LEAHY. Let me ask a question of Ms. Peters, and anybody else can feel free to jump in on it. The TEACH Act expands

the distance education exemption in current law. It permits the reproduction and distribution of copyrighted works to the extent technically necessary to transmit work otherwise covered by the exemption. But the copies are not to be retained any longer than necessary to complete the transmission. If they are, the exemption

doesn’t apply any longer.

Some institutions have raised the question of caching or automatic storage in the Internet service browser. Do we need additional language in here to make clear that automatic caching would

be covered by the expanded exemption?

Ms. PETERS. In our testimony, we mentioned that we probably

were too restrictive and that institutions don’t have control over
42

what happens down the line, and that we would be willing to work

out language that is appropriate.

Senator LEAHY. I am concerned about some potential liability for

the schools, when it wasn’t something they tried to do.

Does anybody else care to speak to that?

Mr. ADLER. Senator, if I may comment, let me say that neither

I nor the publishers I represent would ever have any reason to suspect either you or the Chairman of untoward motivations in introducing this legislation.

Senator LEAHY. I don’t want to leave the suggestion that you do.

As I said, I have a great deal of respect both for you and your organization.

Mr. ADLER. We are simply concerned that in your beneficence

you may inadvertently provide the tools for some people to do that.

On the issue of automatic caching, we understand the problem,

and the comments we have made in the testimony with respect to

transient copies basically would apply there as well so long as the

cached copies cannot themselves be accessed to be used independently for reproducing and redistributing these materials. We understand the role that caching plays in the process and we will work

with you and the Register to accomplish that.

Senator LEAHY. You know, what might be a good idea, Mr.

Chairman, is at some point—and it might be good not as a regular

hearing, but it might be good for the other members of the Committee just to get some of the technical people in and do a demonstration, and have Ms. Peters and Mr. Adler and others here to

say, OK, that we like, that we don’t like. I think it could be something even the Internet Caucus could put together. It is so easy to

speak on the dry aspects of it, but to see what really does work and

what would be allowed under the law and what would not be allowed under the law might be something worth trying.

Chairman HATCH. Sure.

Well, this has been an interesting panel to me. We are trying to

do what is right here, and we have paid particular attention to you,

Mr. Adler, and your concerns. But each one of you has been very

helpful to the Committee here today. We are going to try and do

what is right.

Blame Ms. Peters.

[Laughter.]

Mr. ADLER. Mr. Chairman, we would like just to ask you, in particular, to pay particular attention to how the issue of displaying

a work is treated because display in the context of interactive digital networks like the Internet now means something very different

than it did in the context of analog broadcast television. It is essentially the basis of the nascent e-book to display a work, but to do

so in digital formats that allow it to be fully usable, searchable, capable of being notated.

Chairman HATCH. And downloaded, and so forth. We understand.

Senator LEAHY. Yes. In fact, we are dealing with a whole change

in your business, in publishing, of course. I am very conscious of

the fact that we are not going to have any works to display unless

people can be paid for the product of their work. Now, that may
43

be a lot different in the future in the way they are going to distribute it. The type of payment and all may change.

The good part is that authors and scholars who create these

works should be paid for what they are doing, and the people who

publish them, and so on. But, also, you don’t want the situation we

have. We have schools in this country, and some in some fairly affluent areas, where if you go to the government text Jimmy Carter

is still President. You can imagine what it is like when you go to

either world history or world geography kinds of things and you

have got globes and maps with countries that no longer exist and

a whole lot of countries that have come into being.

My eldest son was at the house the other day and we were cleaning out a closet and there was a globe he had in high school, which

was the most modern, up-to-date at the time. This was 15 years

ago, and I remember when we gave it to him it was the most upto-date globe you could get. And it was remarkable. I mean, you

go to the former Yugoslavia, you go to the former Soviet Union and

you see all these changes.

But with constant electronic updating, children can keep up with

that, and so we have got to get that balance. Children should not

have totally out-of-date texts. They should not have to study that

way, but we need to get the balance right.

Chairman HATCH. Well, we look forward to working with everybody who happens to be interested in updating and improving the

educational opportunities of our students around the country. By

using technology like the Internet and by assisting our educators

in offering compelling content, we think that we can upgradethe

quality of education for our kids all over America.

So we want to particularly thank you again, Ms. Peters, for the

work that you have done in helping us. You have heard some of

the suggestions here today. We would like to have your best advice

on this bill. We don’t want to do anything that isn’t right, but we

do think that this is something that has to be done. So we want

to thank all of you for being here.

With that, we are grateful for this hearing and we are grateful

to have your testimony. We will adjourn until further notice.

[Whereupon, at 11:04 a.m., the Committee was adjourned.]

[Questions and answers and a submission for the record follow:]

QUESTIONS AND ANSWERS

Responses of Allan Robert Adler to questions submitted by Senator Leahy

Question 1: The TEACH Act does not change the limitation in current law applying the distance education exemption in section 110(2) only to ‘‘non-profit’’ educational institutions. For-profit educational institutions have never qualified for the

exemption. The Copyright Office and content owners have raised a legitimate question about whether ‘‘non-profit’’ is an appropriate qualifier since some ‘‘non-profit’’ institutions may not be bona fide educational institutions. Should the requirement

that the educational institution be ‘‘accredited’’ before it is able to qualify for the exemption be added?

Answer: 1: The proposed revised exemption will confer a substantial economic benefit on eligible institutional users of copyrighted works at the expense of the lawful

property interests of authors, publishers and other copyright owners. To justify such

a government mandate and prevent abuses of the privilege it bestows, institutions

seeking to use such works pursuant to the exemption should at least be required

to demonstrate that they reasonably can be expected to do so in compliance with

both (1) the terms of the exemption and (2) the intent of Congress that the exemption should serve to facilitate the provision of high-quality online educational experi-
44

ences. One way in which this can objectively be accomplished is through ‘‘accreditation’’ requirements for eligibility to claim the exemption. [NOTE: AAP understands

this question to ask whether ‘‘accredited’’ should be ‘‘added’’ to the current ‘‘non- profit’’ qualifier, rather than substituted for it. If, however, this understanding is

incorrect, and the intent of the question is to inquire whether ‘‘accredited’’ educational institutions should qualify for the exemption, regardless of their non-profit

or for-profit status, the responses to Questions 1 & 2 should be read together.]

For institutions of higher education, ‘‘accreditation’’ is a well-established prerequisite of eligibility to participate in the federal Title IV student financial assistance programs. The Secretary of Education, pursuant to Congressional directives,

has already promulgated standards and criteria that accrediting agencies must meet

in order to be ‘‘recognized’’ by the Secretary as qualified to accredit both for-profit

and non-profit institutions of higher education for the purpose of making such institutions eligible to participate in Title IV funding programs. See 20 U.S.C. 1099b; 34

CFR 602.1–602.50. These include detailed specifications regarding various aspects

of an institution’s programs, performance and resources that must be assessed in

order to make an accreditation decision.

At present, distance education programs offered by such institutions are restricted

from full Title IV eligibility, pending Congressional review of the Secretary’s report

evaluating ‘‘demonstration programs’’ that were authorized by Congress to permit

participating institutions to offer such programs without meeting certain requirements that generally restrict their Title IV eligibility. See 20 U.S.C. 1093. Among

the recommendations of the Web-Based Education Commission is a full review and,

if necessary, a revision of the 12-hour rule, 50 percent rule and other specific requirements that currently restrict full eligibility of distance education programs for

Title IV funding.

A review by the Department of Education and Congress of the appropriate distance education accreditation standards and requirements with respect to Title IV

student financial assistance eligibility for offering institutions of higher education

could, in turn, help to determine appropriate accreditation standards and requirements to qualify distance education programs of non-profit institutions of higher

education with respect to eligibility for coverage by the revised distance education

copyright exemption proposed in S. 487. Assuming that this exercise would appropriately address the institutional issues that are relevant to eligibility for the exemption but are not currently assessed under existing accreditation criteria (such

as the institution’s compliance with the exemption’s requirements to apply ‘‘technological measures’’ that reasonably prevent unauthorized access to and dissemination

of copyrighted works used in the exempt transmissions), such accreditation standards and requirements could also be adapted for purposes of qualifying the eligibility of non-profit elementary and secondary education institutions for coverage by

the exemption. Unlike institutions of higher education, institutions that provide elementary and secondary education are not currently subject to general accreditation

standards and requirements with respect to their eligibility for participation in federal education funding programs, but instead must qualify for eligibility under the

particular standards and requirements of each of the many different funding programs according to the purpose of each program.

Question 2: Many sponsors of distance education programs are not purely ‘‘non- profit.’’ Some non-profit schools have begun to engage in distance education for profit, some commercial entities are forming partnerships with non-profit institutions to

offer distance education, and some commercial textbook publishers, like Harcourt

General, want to provide full-service distance education programs for accredited college degrees directly. Competition between the non-profit and for-profit distance

learning programs is good for the country. Do you think that retaining the non-profit

requirement in current law helps non-profit educational institutions compete?

Answer: 2: It seems logical to assume that retaining the ‘‘non-profit’’ requirement

in the revised exemption would help non-profit educational institutions to compete

with for-profit educational institutions in the provision of distance learning programs because, in many instances, it would effectively allow the former to avoid certain costs that may have to be borne by the latter for their identical uses of the

same copyrighted works in offering online distance education programs. Absent a

credible ‘‘fair use’’ claim, these costs consist of expenditures in time, effort and

money necessary to obtain the permission of the copyright owner for that use. Assuming that other costs to produce and deliver similar programs are the same, the

avoidance of these costs result in lower costs for the non-profit’s production of the

online education program, and would presumably allow the non-profit institution to

offer the program for a lower fee or tuition, which would (other things being equal)

make its program more attractive in the marketplace than the same program offered by the for-profit institution. Moreover, avoidance of these costs could allow the
45

non-profit institution to use more or better-quality copyrighted works that might be

unaffordable for the for-profit institution, again making the non-profit’s program

more attractive in the marketplace.

Of course, asking whether retention of the ‘‘non-profit’’ requirement helps such institutions to compete is much different than asking either whether retention of the

requirement is needed in order for non-profit educational institutions to compete, or

whether it helps them to compete unfairly. non-profit educational institutions, it

must be remembered, comprise a class that includes numerous major public and private higher education entities that are supported by various combinations of substantial taxpayer funding, alumni donations, tuition payments, and corporate or

foundation grants, as well as income from patent and other property rights. For

many, if not most, of these institutions, retention of the ‘‘non-profit’’ requirement in

the revised exemption is not needed to permit them to compete with for-profit institutions of higher education or other for-profit providers of online education programs. It may, in fact, simply provide them with an unfair competitive advantage

over such competitors.

Similarly, with respect to non-profit elementary and secondary education institutions, it is not clear why they would ‘‘need’’ the exemption to compete, since this

class consists predominantly of public, tax-supported schools which are not currently

facing any substantial competition from for-profit entities. If, however, the advent

of charter schools, tuition voucher policies, and the like were to produce such competition from for-profit entities, retention of the ‘‘non-profit’’ requirement for the revised copyright exemption might nevertheless be viewed as giving the non-profit institutions an unfair competitive advantage with respect to the use of copyrighted

works in the provision of online education programs.

Hence, the quandary in limiting eligibility for the revised exemption to ‘‘non-profit

educational institutions’’—while it is difficult to justify a government mandate that

would allow for-profit educational institutions to freely ride on the investments of

copyright owners (including other for-profit providers), it is clear that establishing

the revised exemption for the benefit of ‘‘non-profit’’ educational institutions is, for

many such entities, an unnecessary and unfair advantage in a competitive marketplace that has made the distinction between ‘‘non-profit’’ and ‘‘for-profit’’ providers

largely irrelevant.

Question 3: The bill contains safeguards to minimize the risk to copyright holders

that the use of works under the expanded exemption could result in copyright piracy. Among those safeguards is a provision requiring the school to use ‘‘technological measures that reasonably’’ prevent unauthorized access and dissemination.

Could you describe the technological measures that copyright owners are using todgy

to minimize the risk of unauthorized downstream use of copyrighted works in distance learning programs?

Answer: 3: Less than two years have passed since the Register of Copyrights

issued the ‘‘Report on Copyright and Digital Distance Education,’’ including the legislative recommendations on which S. 487’s proposed revision of Section 110(2) of

the Copyright Act is based. Although the DMCA debates and the compression of

events in ‘‘Internet time’’ might have led many people to expect extraordinary developments from copyright owners in the design and deployment of ‘‘technological

measures’’ during this period, the description of ‘‘Technologies To Protect Content’’

in the Register’s Report (p.57–67) remains largely accurate and current—at least

with respect to the publishing industry—in its survey of extant uses of technologies

to control unauthorized downstream use of copyrighted works in online education

programs.

Secure digital containers and proprietary viewers, encryption, streaming formats,

and digital watermarking continue to be the leading options available to copyright

owners, with new variations on these themes emerging as part of the development

of commercially-viable ‘‘e-book’’ presentation and delivery mechanisms. Much of

what is occurring in these areas, however, is considered proprietary and confidential. As a result, there is little detail on the public record to document or explain

current developments.

Question 4: Some copyright owners have argued that distance learning is flourishing and that expanding the scope of the exemption provided in section 110(2) may

interfere with the primary market of educational publishers, if distance educators

can get this material for free under the exemption. The bill expressly removes from

the coverage of the exemption ‘‘work produced primarily for instructional use’’ since

we want educational publishers to have the incentive to invest in and publish innovative educational materials that copyright protection can provide. Do you see any

risk to publishers of educational materials from expansion of the distance education

exemption in the limited fashion posed in the TEACH Act?
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Answer: 4: For AAP, one of the most important provisions in S. 487 as introduced

was the bill’s exclusion of works ‘‘produced primarily for instructional use’’ from the

scope of the proposed revised Section 110(2) exemption. Commercial educational

publishers in particular were relieved to see that the cosponsors of the legislation

understood and agreed with the concern expressed by the Register of Copyrights

that application of the exemption to such works ‘‘could significantly cut into primary

markets, impairing incentives to create.’’ AAP believes that this exclusion is not only necessary to the continued viability

of primary educational publishing markets in the U.S., but also necessary to ensure

that the revised exemption does not run afoul of U.S. obligations under international copyright agreements that protect the interests of educational publishers

in markets abroad. For example, Article 13 of the TRIPS Agreement, which incorporates and extends the substantive obligations of the Berne Convention, states that

‘‘Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not

unreasonably prejudice the legitimate interests of the right holder.’’ This obligation

is also endorsed in the WIPO Copyright Treaty, which updates and supplements

Beme and TRIPS with respect to their application in the digital environment. Without the exclusion, AAP believes the proposed revised exemption would violate these

international agreements.

For these reasons, AAP also believes that the exclusion from the exemption of

works ‘‘produced primarily for instructional use’’ should not be limited, conditioned

or qualified in any way, including by carve-outs which would make use of certain

instructional works or limited portions of such works explicitly subject to the exemption. In this vein, we note our concern regarding the hearing testimony of Gerald

A. Heeger on behalf of the Association of American Universities, the American

Council on Education, the National Association of State Universities and LandGrant Colleges, and the Association of Research Libraries. Mr. Heeger specifically

urged that ‘‘instructional audiovisual materials’’ should fall within the scope of the

exemption, but he argued more generally that ‘‘[i]nstructional materials often will

be essential to effectively harmonizing the content of local and remote instruction.’’ In that context, Mr. Heeger’s request regarding audiovisual materials is likely to become the proverbial ‘‘camel’s nose under the tent,’’ and there will be no logical place

to draw the line on further carve-outs if this one is accepted. Following this path

could broaden the exemption to the point where it becomes the basis for creating

‘‘electronic coursepacks’’ or so-called ‘‘e-reserve’’ collections, neither of which could

be justified by the Register’s statements in support of a limited revised exemption.

Question 5: To encourage the use of the Internet in distance learning, the TEACH

Act would expand the distance education exemption in current law to permit the

reproduction and distribution of copyrighted works to the extent technically necessary to transmit the work otherwise covered by the exemption. These copies are

not to be retained any longer than necessary to complete the transmission and, if

they are, the exemption will no longer apply. Educational institutions have raised

a concern over caching, which is an automatic storage of a copy in an Internet Service Provider’s server or a user’s browser to make the Internet run more quickly. The

school doing the transmitting of a copyrighted work under the exemption may have

no knowledge of or control over the caching of copies of the work, even though such

caching might result in potential liability for the school. T3Should additional language be added to the bill to make clear that such automatic caching would be covered by the expanded exemption and, if so, what language would you suggest?

Answer: 5: It would appear to AAP that the described concern regarding potential

liability of transmitting educational institutions for cache copies in an ISP’s server or a user’s browser does not arise at all to the extent that, in the circumstances

of a particular online education program, the institution is acting as an ISP and

qualifies for the liability limitations contained in Section 512 of the Copyright Act,

as amended by the DMCA. Given the myriad variations in the ways in which such

programs may be produced and delivered to or accessed by students, we recognize

that sometimes this situation will exist and sometimes it will not. However, this

leads us to inquire why, in cases where the institution is not acting as an ISP as

defined in Section 512, or is acting as an ISP which does not qualify for the liability

limitations under Section 512, the institution should be entitled to special treatment

under the law regarding its potential liability.

Assuming without certainty that the examples of cached copies offered to illustrate the indicated concern have been validly characterized in technological terms,

it would appear to AAP that there is no valid reason to prescribe special treatment

for such institutions.

In the case where the transmitting institution is not acting as an ISP, it would

appear to have no potential liability arising from such copies because, as stipulated
47

in the testimony of the Register of Copyrights and in the related question framed

above, apart from initiating the transmission, the transmitting institution would

have had no role in the making and retention of such copies, no actual knowledge

or reason to believe that such copies were being made, and no ability to prevent

them from being made. Under such circumstances, it is difficult to understand

under what theory of copyright liability the transmitting institution would be potentially liable.

But in the case where the transmitting is acting as an ISP but either acts or fails

to act in a manner that disqualifies it from eligibility for the liability limitations

provided in Section 512, it is clear that certain theories of liability may apply, yet

it is unclear to AAP why the transmitting institution should categorically be immunized from any theory of legal responsibility for such copies simply because it is engaged in the provision of online educational programs. It may, perhaps, be reasonable to provide some special conditional limitation on the institution’s potential liability for direct infringement in such cases, provided that the conditions to be satisfied are parallel to those prescribed in the appropriately analogous provisions of Section 512 (depending on the circumstances in which the copies were made). However,

given the very real potential for further unauthorized uses of the transmission and

its included copyrighted work to occur as the result of the creation of these copies,

it is difficult to conceive why the usual criteria for secondary liability under theories

of contributory infringement or vicarious liability should not be applicable to the

transmitting institution if such unauthorized uses in fact occur.

Question 6: Both the Copyright Office report and the report of the Web-Based

Education Commission headed by Senator Bob Kerrey noted that educational institutions have difficulty with licensing for digital distance education. Even after

schools determine who the copyright owner is, they often face delays in locating the

owner, obtaining permission and then may incur substantial costs. The TEACH Act

proposes a study by the Copyright Office on the licensing problems encountered by

schools. Are there any steps being taken by schools or copybright owners to make the

licensing process easier to understand and to pursue?

Answer: 6: The written testimony submitted by AAP for the Committee’s hearing

on 5.487 contained examples of recent actions that show how publishers are attempting to make the licensing process easier to understand and to pursue. These

examples, excerpted for your convenience below, bear out the Register’s prediction

that such problems will continue to be addressed as the marketplace evolves and

matures. For example:

• Houghton Mifflin’s College Division has upgraded its Permissions Department’s

website so customers can submit permission requests by using online ‘‘fill-in-theblank’’ forms or downloading PDF templates to fill out and submit by fax. At the

same time, the College Division is conducting a pilot program with Copyright Direct,

a permissions tool of Yankee Rights Management that permits users to obtain realtime permissions online. The College Division is also working with Reciprocal, a ‘‘secure system’’ provider for granting and holding permissions, which also provides ‘‘secure containers’’ that permit rights and permissions information to be carried online

with the content to which its relates.

• Pearson Education’s Prentice Hall subsidiary has established a ‘‘Companion

Website Gallery’’ which provides descriptions and links for an array of textbook-supporting websites that correlate additional learning activities with specific college

textbooks. In addition, like several other AAP members, it has contracted with

NetLibrary, an online provider of e-books, to make some of its college texts available

for online access with full-text search capabilities. Computer Curriculum Corporation, a separate division of Pearson Education, also offers CCC Destinations Internet, a comprehensive online learning program that permits remote delivery of customized, essential skills education for adolescent and adult learners in community

colleges, correctional education programs, and public housing education programs.

• Elsevier Science has established ScienceDirect, an online current awareness

service with a ‘‘click-through’’ license that allows institutional subscribers to their

print journals to have free remote online access to the most recent twelve months

of journal issues on a rolling basis. If the subscriber allows all or selected members

of the public to access its collections, the license allows such persons to access the

journals online from workstations in the institutional facility.

• Thomson Learning’s Global Rights Group has established a website for online

evaluation and disposition of permission requests for all Thomson Learning Higher

Education and Lifelong Learning companies. The website cannot be used to order

and purchase materials, but provides for the use of online permission request forms

and a ‘‘Lookup’’ status check button for all materials produced by Thomson

Learning’s ten higher education companies.
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• Harcourt College Publishers, one of Harcourt General’s higher education companies, has established an Online Learning Center that utilizes the WebCT platform

to deliver courses customized by instructors to accompany many of its main textbooks. Its Custom Publishing operation allows instructors to request modifications

to the company’s own products, including removal of excess chapters, addition of instructor materials, institutional personalization, and the combination of several

products into one. Archipelago Productions, another Harcourt higher education company, which develops multimedia courseware for distance and distributed learning,

has announced alliances with WebCT and Blackboard, Inc., both well-known providers of online education platforms, to deliver Archipelago’s Online Courses in a hybrid ‘‘netCD’’ environment that leverages CD–ROM and Internet technologies to feature the presentation benefits of CD–ROMs and the interactivity of Web browsers

embedded into the disks.

• Wiley InterScience is an online journals service through which John Wiley &

Sons, a leading scientific publisher, allows all users to browse and search Tables of

Contents of all of its journals online, and obtain online access to abstracts for all

of its titles. Depending on the type of subscriber, the service can also offer online

access to the full text of all subscribed journals.

In a recent follow-up with Houghton Mifflin, we learned that last year the College

Division processed 122 requests to post HM materials to intranets and

passwordprotected Internet pages, and to digitize audio or video ancillary materials.

Most of these were academic requests (i.e., from instructors, campus language labs,

and libraries), which were all granted. Comparing this with 76 such requests received in 1999 and 56 such requests received in 1998, it seems clear that the publisher’s efforts to improve the handling of such requests has thus far kept pace with

the increase in the number of such requests. Overall, the Division’s Permissions

Web Page has become the pipeline for all sorts of permissions requests, involving

both print and non-print uses. Customers continue to use e-mail forms to make

their requests (up 75% from the previous year), as well as downloadable pdf forms

to make their requests by fax.

It is also AAP’s understanding that the website of the National Association of College Stores (‘‘NACS ’’) has recently added ‘‘digital distribution’’ to their downloadable

sample permissions request form, facilitating more rapid submissions of complete

and accurate permissions requests.

Of course, many educational publishers continue to make an increasingly diverse

array of digital content available on line for customized use by instructors. For example, Pearson’s Higher Education Division has partnered with a leading ‘‘e-learning’’ infrastructure company to create and release ‘‘CourseCompass’’—a nationallyhosted Web-based e-learning platform which enables educators to easily customize

extensive content offerings from Pearson and integrate them with their own materials. Pearson Education has undertaken a similar venture with another technology

partner to deliver an online teaching and professional development platform to

teachers for elementary and secondary schools.

Question 7: The bill requires the educational institution to limit reception of an

exempted transmission to enrolled students or government employees ‘‘to the extent

technologically feasible.’’ In addition, the bill requires the educational institution to

apply technological measures ‘‘that reasonably prevent unauthorized access’’ to the

work.

(a) Would the fact that these requirements are not identical to each other pose a

problem for educational institutions to comply or are the requirements complementary?

Answer: 7(a): The requirements of the two provisions are somewhat overlapping

due to the fact that ‘‘reception’’ of the transmission in this context would presumably provide ‘‘access’’ to the copyrighted work performed or displayed therein, even

if decryption was required to facilitate such reception. (A different view might apply

if the performance or display were somehow separately encrypted within the otherwise unencrypted transmission and thus required a separate step apart from ‘‘reception’’ of the transmission to actually provide ‘‘access’’ to the performance or display

of the work.). However, the requirements may be distinguished by virtue of the fact

that the latter requirement is an obligation explicitly imposed on ‘‘the transmitting

body or institution’’ while the former requirement characterizes the transmission

itself, rather than any explicit duty of ‘‘the transmitting body or institution.’’ Moreover, since the latter provision addresses unauthorized postaccess uses of the work,

as well as unauthorized access to the work, the two provisions could be viewed as

intended to address distinct concerns. AAP believes it is appropriate to separately

treat the need to limit reception of the transmission and access to the copyrighted

works embodied therein, on the one hand, and the need to prevent unauthorized
49

post-access uses of such works, on the other, but urges that the standards be harmonized as explicit obligations of the ‘‘transmitting body or institution.’’

Moreover, in harmonizing the provisions, AAP believes it would be appropriate

and advisable to apply the same ‘‘technologically feasible’’ standard to both categories of concern. Requiring that unauthorized access and dissemination must be

achieved ‘‘to the extent technologically feasible’’ is, in our view, a higher and more

objective standard than requiring that such conduct must be ‘‘reasonably

prevent[ed]’’ because, unless ‘‘reasonably’’ in the latter context is explicitly understood to mean ‘‘to the extent technologically feasible,’’ the standard would permit the

requirement to be met through use of technological measures that are known to be

less effective than available alternatives, since all that would be required is that

they ‘‘reasonably’’ prevent such occurrences, rather than prevent them altogether.

While we understand that no technological measure can be absolutely guaranteed

to withstand circumvention efforts and be effective in all instances, there is no reason why the ‘‘transmitting body or institution’’ should not be required to use the

most effective technological measures available, rather than permitted to use alternatives that are merely ‘‘reasonably’’ effective.

(b) Do you believe these requirements would impose any obligation on educational

institutions to use technology to prevent students from freely downloading the materials transmitted?

Answer: 7(b): Absolutely, and we believe they should be obligated to do so in order

to maintain the balance of user and copyright owner interests that Congress built

into the existing exemption. Nothing in the current language of Section 110(2) authorizes students to make copies of the instructional broadcasts authorized under

this exemption; to the extent that any copies of such transmissions are authorized

to be made under the current language of Section 112(b), it is the governmental

body or non-profit educational institution entitled to transmit the performance or

display under Section 110(2) that is authorized to make the copies, not the recipients of the transmission. Similarly, nothing in the proposed revised exemption

should permit the students or government employees who can receive or access the

transmission embodying the exempt performance or display to freely download the

materials in question and open them up to further unauthorized reproduction, distribution or other use. To clarify this matter, AAP believes that the term ‘‘dissemination’’ should be replaced by the phrase ‘‘reproduction, distribution or other use.’’

(c) What degree of protection would be ‘‘reasonable’’?

Answer: 7(c): As noted above, if the qualifying term ‘‘reasonably’’ is to be retained

as part of the provision describing the obligation of the transmitting body or institution to apply technological measures, it should be explicitly defined to mean ‘‘to the

extent technologically feasible.’’ Moreover, however the phrase ‘‘technologically feasible’’ is ultimately used in either or both of the above-referenced provisions, it

should clearly be understood to refer to ‘‘feasibility’’ in terms of the state-of-the-art

technological capabilities available in the marketplace, not in terms of the capabilities of the technology already used by the transmitting body or institution. In other

words, the limits of technological feasibility should be based on what is available

in the market, not merely on what will work with the equipment or facilities used

by the transmitting body or institution. There is no justification for making the

copyright owner assume the risk of inadequate technological measures simply because the transmitting body or institution has failed to keep up with the state-ofthe art in the technology used to make the transmission.

Question 8: It has been almost two years since the Copyright Office issued its report on distance learning and made its legislative recommendations. Are there any

new developments, new concerns or significant advances in technology that would

affect any part of the analysis in that report?

Answer: 8:

With respect to developments in technology, see our response to Q3 above.

With respect to other new developments and concerns since the issuance of the

Register’s Report, AAP reiterates and urges the Committee to carefully consider the

issues raised in our written submission for the Committee’s hearing: At present, no

one really knows the costs or other burdens involved in implementing the ‘‘technological measures’’ requirement in the proposed revised exemption. But, even if the

necessary technological safeguards were widely-available in ‘‘a convenient and affordable form’’ in today’s market, copyright owners have, in the period since the

issuance of the Register’s Report, acquired some legitimate reasons to entertain

doubts about the willingness of public institutions of higher education—the most

significant class of ‘‘non-profit educational institutions’’ offering online distance education programs—to take on the full costs and responsibility of good-faith compliance in their implementation.
50

Some of these reasons are based on the fact that the Napster phenomenon, which

two federal courts have enjoined as fostering ongoing instances of blatant copyright

infringement on an unprecedented mass scale, has been chiefly pursued by students

using campus-based Internet access and computer networks. Although universities

and colleges were not themselves perpetrators of the infringing music-swapping activity, their failure to act in some cases to block student access to Napster’s server contributed substantially to the magnitude of the problem. Many of these institutions continue to express ambivalence regarding their obligations or abilities to deal

with ‘‘the technical, legal, and moral issues raised by Napster and other file-sharing,

bandwidth clogging, copyrightchallenging programs.’’ See, e.g., Carlson, Scott, ‘‘Get

Ready for an Encore of the Napster Controversy, ‘‘ The Chronicle of Higher Education, September 8, 2000, p.A51.

Others reasons may be based on the evident antagonism that representatives of

the higher education community demonstrated toward legal prohibitions against circumventing certain kinds of technological measures in hearings held by the Copyright Office last year for the so-called ‘‘Section 1201 anticircumvention rulemaking’’ conducted by the Librarian of Congress. Although their request to legalize circumvention of access controls with respect to maps, newspapers, databases, textbooks, scholarly journals, academic monographs and treatises, law reports and educational audio/visual works was rejected by the Librarian, at the recommendation

of the Copyright Office, it is notable for the disturbingly narrow view it represents

regarding the legitimate right of copyright owners to use technological measures to

control access to copyrighted works. See Library of Congress, Final Rule: Exemption

to Prohibition on Circumvention of Copyright Protection Systems for Access Control

Technologies, 65 Fed. Reg. 64555 (daily ed. October 27, 2000.)

Still other reasons may be found on the fear that recent rulings by the U.S. Supreme Court and the Fifth Circuit U.S. Court of Appeals, which have barred lawsuits for damages against State entities for violations of federal statutory rights,

have eliminated the primary incentive for public educational institutions to comply

with legal standards that protect the rights of copyright owners. See, e.g., Department of Commerce Patent and Trademark Office, Notice of Conference on State Sovereign Immunity and Intellectual Property Rights, 65 Fed. Reg. 11987 (daily ed.

March 7, 2000).

These developments, separately and in combination, should be evaluated by the

Committee to realistically assess the likelihood of full good-faith compliance by nonprofit educational institutions with ‘‘technological measures’’ requirements imposed

by the legislation at issue.

Question 9: The Copyright Office report noted that access control measures to

copyrighted works, such as passwords, were already in widespread use, but technologies that control post-access uses for all types of works were not widely available. Are technical measures now more readily available to control post-access distribution of works and, if so, please describe those that are available?

Answer: 9: 

Response of Allan Robert Adler to a question from Senator Blanche L.

See response to Q3 above.

Lincoln submitted on her behalf by Senator Leahy

f Question: I believe visually impaired students should have access to the same educational opportunities that are available to sighted students. Unfortunately, many

blind students are denied equal access to instructional materials today because the

process of converting textbooks for use by the blind can be costly and time consuming. According to constituents I’ve met with regarding this issue, some non-sighted

students must wait up to 6 months to receive required classroom materials that are

made available to sighted students on the first day of class.

Mr. Adler, can you describe what steers publishers have taken or plan to take to

make textbooks and other instructional materials available to non-sighted students

in a timely manner? Also, does the Association of American Publishers recommend

any federal legislative changes that would facilitate the availability of required

classroom materials for the blind?

Answer: In recent years, under the direction of our President and CEO Pat

Schroeder, AAP has worked closely with the leading blind advocacy groups to address problems encountered by blind and other persons with disabilities in gaining

access to books and other printed materials in specialized formats for their use. Perhaps the best-known example of our successful collaboration with these groups is

a provision in the Copyright Act that allows previously-published nondramatic lit-
51

erary works to be reproduced and distributed in specialized formats for blind and

other persons with disabilities without the need to obtain permission from the copyright holder. Popularly known as the Chafee Amendment, this 1996 addition to

copyright law has eliminated a substantial practical hurdle to ensuring that instructional materials and many other print works can be made available to blind and

other persons with disabilities in the specialized formats they require.

During the past year, we have been working with the blind advocacy groups to

draft federal legislation which would replace a patchwork quilt of State legislation

addressing various issues regarding how textbooks and other instructional materials

are provided by publishers to local educational agencies in electronic file formats

suitable for efficient conversion into specialized formats for blind and other persons

with disabilities. The purpose of the federal legislation would be to prescribe uniform national standards and procedures for the provision of such electronic files for

conversion into specialized formats in order to achieve the goal of ensuring that

blind and other children with disabilities in elementary and secondary schools will

have their assigned textbooks and other instructional materials available to them

in specialized formats at the same time as the regular printed versions of these materials are provided to their classmates.

The effort has been complicated by the number and nature of issues to be addressed, but all parties have continued to work closely with good faith efforts. The

issues include (1) defining the kind of instructional materials that will be subject

to the legislation; (2) calculating a quick but workable timeframe for the publisher’s

provision of the electronic files to the responsible state officials after receiving notice

of their request for such files in connection with specific materials required for students in particular classes; (3) establishing plans for a national repository to which

such files can be sent to remain on deposit for use by educational officials in different states as required; (4) devising a technical standard-setting proceeding to

combine the publishing industry’s evolving practices with the practical needs of the

persons who convert works into Braille and other specialized formats in order to establish a national standard format for these electronic files; and, (5) addressing the

needs of conversion personnel for funding and training to be able to take advantage

of the national standard format (likely to be XML-based) when the transition period

for its adoption has run.

As you know, crafting federal legislation to preempt existing State laws is always

a very delicate task, and the effort to reach consensus before moving the issue to

the Hill has been a conscious and deliberate plan of all parties involved. Each of

the issues highlighted above presents its own problems for resolving current differences among the States, half of which have specific requirements on these matters and half of which do not.

AAP would be delighted to further brief you and your staff on the status of these

current efforts at your convenience.

Responses of Gary Carpentier to questions submitted by Senator Leahy

f Question 1: The TEACH Act does not change the limitation in current law applying the distance education exemption in section 110(2) only to ‘‘non-Profit’’ educational institutions. For-profit educational institutions have never qualified for the

exemption. The Copyright Office and content owners have raised a legitimate question about whether ‘‘non-profit’’ is an appropriate qualifier since some ‘‘non-profit’’

institutions may not be bona fide educational institutions. Should the requirement

that the educational institution be ‘‘accredited’’ before it is able to qualify for the

exemption be added?

Answer: The concept of accreditation, seems to me, to be a more valid and appropriate qualifier to allow a learning institution, whether ‘‘non-profit’’ or ‘‘bona fide

for-profit,’’ to be granted an exemption. Accreditation is an easier, more useful criterion that can be implemented to make this legislation work. It is my opinion that

the term ‘‘accredited, bona fide educational institution’’ should replace ‘‘non-profit

educational institution’’ in the current law and any future legislation.

Question 2: Many sponsors of distance education programs are not purely ‘‘nonprofit.’’ Some non-profit schools have begun to engage in distance education for profit, some commercial entities are forming partnerships with non-profit institutions to

offer distance education, and some commercial textbook publishers, like Harcourt

General, want to provide full-service distance education programs for accredited college degrees directly. Competition between non-profit and for-profit distance learn-
52

ing programs is good for the country. Do you think that retaining the non-profit requirement in current law helps non-profit educational institutions compete?

Answer: I think that the ‘‘non-profit’’ requirement in current law does not help

non-profit educational institutions compete. At this time, these educational institutions have an advantage to be part of the system merely because they represent or

might provide a large group potential end-users of distance education. By retaining

the ‘‘non-profit requirement’’ in current law, innovation is stymied. For educational

institutions to truly become participants in the distance education market, all barriers to entry must be removed and the playing field leveled. The market will determine winners and losers.

Question 3: The bill contains safeguards to minimize the risk to copyright holders

that the use those safeguards is a provision requiring the school, to use ‘‘technological measures that reasonably [sic]’’ to prevent unauthorized access and dissemination. Could you describe the technological measures that copyright owners are

using today to minimize the risk of unauthorized downstream use of copyrighted

works in distance learning programs?

Answer: There are dozens of ‘‘Digital Rights Management’’ (‘‘DRM ’’) solutions

available to fight copyright piracy. A survey of DRM solutions show that:

The core element of the DRM architecture operates on PCs and servers. DRM

processing acts as a secure ‘virtual system’ that can manage each parties’ digital

rights remotely. Each local, secure database stores the user’s rights, identities,

transactions, budgets, and keys.

Protected information in the system is encrypted and stored in a secured file.

Once in a secured file, the information can flow across unsecured networks, and

only a user satisfying the required rules can access and process the information. Information in a secured file remains protected even after a user has accessed it, providing persistent protection of the information and continuing control over its use,

regardless of where the information travels.

Content usage is managed by rules, including price, payment offer, play, view,

print, copy, save, super-distribution, and others. Many ‘‘solutions’’ provide a variety

of tools for allowing providers to create and change rules, and associate them with

digital information. Rules are protected in the same way content is protected. As

with content, rules are stored in secured files for distribution. Rules can travel with

the information, or separately, allowing copyright holders the flexibility to change

any rule, including rights or price, after content has been delivered. An architectural

system such as this ensures that applicable rules are followed every time an information usage ‘event’ is requested.

Question 4: Some copyright owners have argued that distance learning is flourishing and that expanding the scope of the exemption provided in section 110(2) may

interfere with the primary market of educational publishers, if distance educators

can get this material for free under the exemption. The bill expressly removes from

the coverage of the exemption ‘‘work produced primarily for instructional use’’ since

we want educational publishers to have the incentive to invest in and publish innovative educational materials that copyright protection can provide. Do you see any

risk to publishers of educational materials from expansion of the distance education

exemption in the limited fashion proposed in the TEACH Act?

Answer: No, the reward to educational publishers far outweighs the risk mentioned. Despite copyright owner arguments that ‘‘distance learning is flourishing,’’

quite the opposite is true. Distance education business models reflect enormous

frontend capital requirements to create and maintain operations in the early stages

of initial trial and adoption. Without the content available to educators and

endusers, distance education providers will be further ham-strung. A more reasonable approach to consider might be to limit the amount of content from ‘‘work produced primarily for instructional use’’ that may be covered under the exemption.

That may satisfy all concerned parties.

Question 5: To encourage the use of the Internet in distance learning, the TEACH

Act would expand the distance education exemption in current law to permit the

reproduction and distribution of copyrighted works to the extent technically necessary to transmit the otherwise covered by the exemption. These copies are not to

be retained any longer than necessary to complete the transmission and, if they are,

the exemption will no longer apply. Educational institutions have raised a concern

over caching, which is an automatic storage of a copy in an Internet Service Provider’s server or a user’s browser to make the Internet run more quickly. The school

doing the transmitting of a copyrighted work under the exemption may have no

knowledge of or control over the caching of copies of the work, even though such

caching might result in potential liability for the school. Should additional language
53

be added to the bill to make clear that such automatic caching would be covered

by the expanded exemption and, if so, what language would you suggest?

Answer: If appropriate Digital Rights Management protections are put in place on

the content transmitted, the notion of protection of cached content residing on remote servers will be moot.

Question 6: Both the Copyright Office report and the report of the Web-Based

Education Commission headed by Senator Bob Kerrey noted that educational institutions have difficulty with licensing for digital distance education. Even after

schools determine who the copyright owner is, they often face delays in locating the

owner, obtaining permission and then may incur substantial costs. The TEACH Act

proposes a study by the Copyright Office on the licensing problems encountered by

schools. Are there any steps being taken by schools or copyright owners to make

the licensing process easier to understand and pursue?

Answer: Not that I am aware of. Currently, the educational institution requires

the Professor or instructor to personally obtain any and all copyright permission for

content incorporated in his or her course. Some institutions pursue the purchase of

an ‘‘educational use license’’ from publishers or copyright holders and others pursue

the option of purchasing a ‘‘blanket license’’ from copyright management organizations.

Question 7: The bill requires the educational institution to limit reception of an

exempted transmission to enrolled students or government employees ‘‘to the extent

technologically feasible.’’ In addition, the bill requires the educational institution to

apply technological measures ‘‘that reasonably prevent unauthorized access’’ to the

work.

Question (a): Would the fact that these requirements are not identical to each

other pose a problem for educational institutions to comply or are the requirements

complementary?

Answer: These requirements are complementary. As mentioned above, there are

dozens of Digital Rights Management solutions available to copyright holders that

will solve this problem for them as well as the educational institutions.

Question (b): Do you believe these requirements would impose any obligation on

educational institutions to use technology to prevent students from freely

downloading the materials transmitted?

Answer: Possibly. The proposed legislation requires that end-users of the content

transmitted be authorized users and enrolled in a course at the institution. So naturally, there is an interface between the originator of the content, the Professor or

instructor who desires to use the content in a course, the educational or governmental institution which provides the names of the enrolled end-users and the actual Internet Service Provider which transmits the content to the end-user. It is the

obligation of the institution to manage the set of end-users authorized to receive the

content. This includes authorizing students/employees as well as denying access.

There are many existing technologies that can ‘‘reasonably prevent unauthorized access’’ to content transmitted over the Internet.

Question (c): What degree of protection would be ‘‘reasonable’’?

Answer: Complete protection is ‘‘

freasonably’’ and entirely obtainable.

Responses of Gerald Heeger to questions submitted by Senator Leahy

Questions 1 and 2: Raise related issues, question 1 asking whether accreditation

should be added to non-profit status as a qualifying condition for the exemption,

question 2 asking whether retaining the non-profit requirement aids nonprofit institutions in competition with for-profit institutions. We would like to address the

questions raised in these two issues as follows:

The principal objective of the distance education exemption should be to enhance

the breadth and quality of distance education content. To the extent that accreditation can effectively identify institutions or programs that deliver quality educational

content, it is reasonable to argue that any accredited institution, whether non-profit

or for-profit, should be eligible for the distance education exemption. The U.S. accreditation system includes regional and national accreditation agencies recognized

by the Council on Higher Education Accreditation and the U.S. Department of Edu-
54

1The CHEA–USDA recognition system is critical. A number of non-recognized accreditation

agencies exist to ‘‘accredit’’ diploma mills; neither these agencies nor the institutions they accredit should be included in a distance education exemption. 2Section 110(1) currently requires only that material used for classroom performance or display be lawfully made. The addition in S. 487 of ‘‘lawfully acquired’’ therefore constitutes an

added requirement but is one that we would find acceptable.

cation.1 Accreditation by these recognized accrediting agencies would provide reasonable assurance that the distance education exemption is used by legitimate educational institutions and programs for the purposes intended in law. Accreditation

of an institution cannot guarantee that an institution will use distance education

materials appropriately but would provide additional assurance of appropriate use

that would be a useful addition to the other safeguards already included in S. 487.

Since the U.S. accreditation system accredits both non-profit and for-profit institutions, there does not seem to be a compelling reason to limit the distance education

exemption to non-profit institutions.

Questions 3: The question asks what technological protections copyright owners

are employing to protect against unauthorized downstream redistribution of copyrighted works. Although a great deal of work is underway to develop such technology, we are not aware of widely available, effective technologies to control downstream redistribution. Colleges and universities are using a number of technological

protections such as PIN numbers and passwords to control online access to copyrighted material and will certainly use technological protections that are reasonably

available and affordable to control downstream uses of copyrighted works once such

protections are developed.

However, technological protections that control downstream uses of copyrighted

works are only one category of protection of copyrighted works in S. 487. Access controls, which, as noted above, colleges and universities already employ, as well as

portion limitations, mediated instruction, and limiting the retention of temporary

copies provide substantial protection against the misuse of copyrighted material.

Therefore, we suggest that the language of S. 487 concerning the use of technological protection measures that reasonably protect against unauthorized downstream redistribution be qualified to obligate institutions to employ such protections

that are ‘‘technologically feasible and economically reasonable.’’ Currently, such protections are not available, and we do not believe that unavailability should freeze

the deployment of online distance education. When such technologies do become

available, they must be available on terms that allow institutions to implement

them effectively: one could imagine the development of a technology that provided

protection against downstream uses but was so prohibitively expensive that it was

effectively out of reach of all institutions.

Question 4: This question asks whether S. 487, with its several safeguards, poses

a threat to publishers of educational materials. Since S. 487 would require the use

of lawfully made and acquired material,2 we believe that there is no credible threat

to the market for publishers of educational materials. Indeed, we believe that the

educational materials market will expand if S. 487 is enacted into law, because such

a law will enable more institutions to expand their online offerings, thereby expanding the educational market. Moreover, because of the inclusion in S. 487 of requirements for using only lawfully made and acquired materials, in addition to the inclusions of the other safeguards such as portion limitations noted above, we believe

that the exemption should include, rather than exclude, instructional works. Given

the requirements and safeguards included in the bill, the risks to educational publishers are minimal, but the educational consequences of exclusions of instructional

materials would be substantial. A risk-benefit analysis would therefore strongly

favor inclusion of instructional works in the exemption provided in S. 487.

Question 5: This question asks whether additional language needs to be added to

deal with automatic caching. The educational community is concerned with several

aspects of the limitations on the reproduction right, and believe that several

changes in S. 487 are warranted to conform with the technical realities of the Internet and to ensure that institutions do not lose the benefit of the exemption as a

result of activity beyond their reasonable control.

First, we believe that the reference to ‘‘transient’’ copies should be changed to

refer to ‘‘temporary copies’’ in order to conform to the way in which those terms

were used in the DMCA. In section 512 of the Copyright Act, enacted as part of the

DMCA, Congress differentiated between ‘‘transient’’ and ‘‘temporary’’ copies. The

term ‘‘transient’’ was used to describe router copies or other ‘‘conduit’’ copies. See

§ 512(a). The term ‘‘temporary’’ was used to describe server caching, among other

copies of somewhat longer duration. See § 512(b). Cached copies, as well as copies
55

made by the receiving students’ browser software, are typically beyond the control

of the originating institution. An institution should not lose the exemption if such

copies are made.

Further, the bill would limit such copies ‘‘to the extent technologically necessary

to transmit the performance or display.’’ It has been argued that caching, though

important for Internet efficiency, is not strictly ‘‘necessary’’ for the completion of a

transmission. The bill should not impose this limitation, which could be read to preclude cached copies.

Finally, subparagraph (D) would require that ‘‘any transient copies are retained

for no longer than reasonably necessary to complete the transmission.’’ This language raises three issues. First, it uses the term ‘‘transient’’ rather than ‘‘temporary.’’ Second, it again interposes a requirement of ‘‘necessity,’’ which may or may

not be strictly satisfied by caching. Third, it subjects an institution to potential liability for retention of material often beyond its reasonable control.

We suggest that the following be substituted for subparagraph (D): ‘‘the transmitting entity does not cause a temporary copy made as part of the automatic technical

process of the digital transmission to be retained beyond a period that is reasonable

in light of the purpose of the transmission for which a copy is created.’’

Question 6: This question asks what steps are being taken to make the licensing

process easier to understand and pursue. Both the higher education community and

copyright owners have taken a number of steps to try to improve the licensing process. Numerous meetings and conferences have been held to discuss the problems of

licensing, within the higher education community and between the higher education

and content communities. The Copyright Clearance Center attempts to provide a

‘‘one-stop shopping’’ service for facilitated licensing transactions. Universities have

formed consortia to pursue multi-institutional site licenses. Although all these efforts have yielded benefits of varying degrees, licensing remains a problem and will

for the foreseeable future, a point which simply underscores the importance of the

harmonization of the distance education exemption to the digital world as proposed

in S. 487.

Question 7: asks about several aspects of S. 487 language concerning the use of

technological protection measures. The educational community is concerned about

the potential inconsistency of the requirements of subparagraph (C) and the access

requirement of subparagraph (E)(ii). For example, it is not clear how the provisions

would be construed if access limitations that were technologically feasible were

deemed not to provide a reasonable limitation of access. Moreover, even if the provisions were fully consistent, we would be concerned about their apparent redundancy. Courts often start with the premise that Congress would not have included

unnecessary language in legislation, so that apparently redundant provisions may

be misconstrued in an effort to supply some meaning. Thus, we do not believe that

subparagraph (C) and the access provision of subparagraph (E)(ii) should both remain in the bill. We believe the requirement is best expressed in subparagraph (C),

requiring a limitation of access to the extent ‘‘technologically feasible.’’ It makes no

sense to require unfeasible technological protection measures.

Further, we believe that a provision limiting the obligation to restrict access to

that which is economically reasonable also is warranted, and could easily be included by adding the words ‘‘and economically reasonable’’ after the words ‘‘technologically feasible.’’ There should not be an obligation to apply access limitations that

are not reasonably available to non-profit educational institutions.

We are not clear on part (b) of question 7 relating to ‘‘freely downloading’’ course

materials. Enrolled students must be able to download the materials used in the

course. Downloading is the normal process by which the materials can be viewed

and used. Others will not have access to the material, as discussed in the preceding

paragraph. Nor do we believe the access control obligations are intended to prevent

downloading. The act that should be prevented, to the extent reasonable and technologically feasible, is the further dissemination of downloaded material to others.

That obligation is contained in subparagraph (E)(ii). Our position with respect to

such measures is discussed in response to question 3, above.

We believe access control through the use of password protection, a widely used

method of access control for distance education, is reasonable.
f56

Responses of Richard M. Siddoway to questions submitted by Senator

Leahy

Question 1: The TEACH Act does not change the limitation in current law applying the distance education exemption in section 110(2) only to ‘‘non-profit’’ educational institutions. For-profit educational institutions have never qualified for the

exemption. The Copyright Office and content owners have raised a legitimate question about whether ‘‘non-profit’’ is an appropriate qualifier since some ‘‘non-profit’’

institutions may not be bona fide educational institutions. Should the requirement

that the educational institution be ‘‘accredited’’ before it is able to qualify for the

exemption be added?

Answer: It seems appropriate to me that the institution should be accredited. I

would go further to suggest the accreditation be done by the appropriate Association

of Schools and Colleges. In our geographic location that is the Northwest Association, but this varies by geographic location. There are any number of ‘‘accreditations’’ that could be claimed by various institutions, which may not bring any more

validity to the process than status quo.

Question 2: Many sponsors of distance education programs are not purely ‘‘nonprofit.’’ Some nonprofit schools have begun to engage in distance education for profit, some commercial entities am forming partnerships with nonprofit institutions to

offer distance education, and some commercial textbook publishers, like Harcourt

General, want to provide full-service distance education programs for accredited college degrees directly. Competition between the non-profit and for-profit distance

learning programs is good for the country. Do you think that retaining the nonprofit

requirement in current law helps non-profit educational institutions compete?

Answer: Realize that I am speaking for the public K–12 school community. It appears to me that one reason the fair use provisions have existed for public schools

is because of their free public education status. Private non-profit schools have enjoyed that same freedom because of their non-profit status. Both public and private

non-profit schools are working with fixed, limited financial resources. Unlike public

schools whose budgets are controlled by state legislatures and local board decisions,

private schools have the ability to alter their budgets through increased tuition and

fees. Consequently, I believe the non-profit requirement is an appropriate restriction.

Question 3: The bill contains safeguards to minimize the risk to copyright holders

that the use of works under the expanded exemption could result in copyright piracy, Among those safeguards is a provision requiring the school, to use ‘‘technological measures that reasonably’’ prevent unauthorized access and dissemination.

Could you describe the technological measures that copyright owners are using

today to minimize the risk of unauthorized downstream use of copyrighted works

in distance learning programs?

Answer: Again speaking for our particular Electronic High School, we have three

different delivery methods that each has its own safeguards. Our broadcast television courses (largely concurrent enrollment, where students earn both college and

high school credit) purchase the copyright releases on any materials that are broadcast. Printed materials are sent only to registered students as are e-mailed materials.

Our EDNET courses axe deliverer) over a closed system. The teacher is in one

location and students are in distant locations but located in an EDNET studio,

which gives them access to voice/video/and data communication. Each distance

learning site has a site facilitator who controls the class and distributes printed materials that have been transmitted through mail or by e-mail. Only registered students are allowed in the classes.

Our internet class members enter the classes through password protection. Only

registered members of the class are able to participate and receive information.

Question 4: Some copyright owners have argued that distance learning is flourishing and that expanding the scope of the exemption provided in section 110(2) may

interfere with the primary market of educational publishers, if distance educators

can get this material for free under the exemption. The bill expressly removes from

the coverage of the exemption ‘‘work produced primarily for instructional use’’ since

we want educational publishers to have the incentive to invest in and publish innovative educational materials that copyright protection can provide. Do you see any

risk to publishers of educational materials from expansion of the distance education

exemption in the limited fashion proposed in the TEACH Act?
57

Answer. No. I don’t see a problem. At the present time all of our internet teachers

are avoiding using textbooks and other educationally published materials because

of the copyright restrictions. Instead, they are looking for web sites that provide

similar material and ‘‘hot-linking’’ to them In other words, they are staying away

from published materials because of the currently understood restrictions. If they

do use a textbook in their class, they are having the students acquire those textbooks either by borrowing from their local school or purchase.

Question 5: To encourage the use of the Internet in distance learning, the TEACH

Act would expand the distance education exemption in current law to permit the

reproduction and distribution of copyrighted works to the extent technically necessary to transmit the work otherwise covered by the exemption,. These copies are

not to be retained any longer than necessary to complete the transmission and, if

they are, the exemption will no longer apply. Educational institutions have raised

a concern over caching, which is an automatic storage of a copy in an Internet Service Provider’s server or a user’s browser to make the Internet run more quickly. The

school doing the transmitting of a copyrighted work under the exemption may have

no knowledge of or control over the caching of copies of the work, even though such

caching might result in potential liability for the school, Should additional language

be added to the bill to make clear that such automatic caching would be covered

by the expanded exemption and, if so, what language would you suggest?

Answer. At the risk or injecting any even thornier conundrum, let me suggest that

there is a larger problem. The assumption that the transmission of the material will

occur in a restricted bane frame makes the assumption that the class is synchronous. That is, the students are all taking the class at the same moment. In the

case of the Electronic High School, we have open entry, open exit of students. Consequently, we have students distributed through any and all of the waits in a course

at any given moment. In order for a teacher to have the materials available for students he/she must be able to maintain the material for an extended period of time

sufficient to allow all students who are registered, at the time the materials are

made available, to complete the unit for which the materials are intended. However,

if the appropriate password protections, or other technological limitations are placed

on students who are taking a class, this does not seem to be an onerous task.

Question 6: Both the Copyright Office report and the report of the Web-Based

Education Commission headed by Senator Bob Kerrey noted that educational institutions have difficulty with licensing for digital distance education. Even after

schools determine who the copyright owner is, they often face delays in locating the

owner, obtaining permission and then may incur substantial costs. The TEACH Act

proposes a study by the Copyright Office on the licensing problems encountered by

schools. Are there any steps being taken by schools or copyright owners to make

the licensing process easier to understand and to pursue.

Answer. There are data bases that list copyright owners of various kinds of media.

The larger problem often is that there are multiple copyright owners of motion

media materials, (script, music, choreography, for example). It would be very handy

to have a single clearinghouse of materials.

Question 7: The bill requires the educational institution to limit reception of an

exempted transmission to enrolled students or government employees ‘‘to the extent

technologically feasible.’’ in addition, the bill requires the educational institution to

apply technological measures ‘‘that reasonably prevent unauthorized access’’ to the

work.

Question (a): Would the fact that these requirements are not identical to each

other pose a problem for educational institutions to comply or are the requirements

complementary?

Answer. They seem to be complementary requirements.

Question (b): Do you believe these requirements would impose any obligation on

educational institutions to use technology to prevent students from freely

downloading the materials.Is transmitted?

Answer. The restriction seems to be on the transmission end, not the reception

end of the process. If the institution has taken appropriate measures to ensure that

only enrolled students are able to receive the materials, it appears they have met

the test of the law.

Question (c): What degree of protection would be ‘‘reasonable’’ ?

Answer. If students are able to gain access to the class and its associated materials through password access, that would seem to be reasonable. Encoding is becoming more and more affordable, but seems unnecessary if password protection is

in place.
58

Thank you for the opportunity to testify before the sub-committee. We appreciate

so much the work that Senator Hatch and Senator Leahy are doing to help us provide high quality educational opportunities through distance learning.

f Richard M. Siddoway

Responses of Marybeth Peters to questions submitted by Senator Leahy

Question 1: The TEACH Act does not change the limitation in current law applying the distance education exemption in section 110(2) only to ‘‘non-profit’’ educational institutions. For-profit educational institutions have never qualified for the

exemption. The Copyright Office and content owners have raised a legitimate question about whether ‘‘non-profit’’ is an appropriate qualifier since some ‘‘non-profit’’ institutions may not be bona fide educational institutions. Should the requirement

that the educational institution be ‘‘accredited’’ before it is able to qualify for the

exemption be added?

Answer: We recognize that a ‘‘non-profit’’ qualifier is not sufficient. However, we

also have some concern about the use of accreditation as a criterion, notwithstanding the support it enjoyed at the time we prepared our Report. One of our concerns

is that mandating accreditation would rule out some institutions that are presently

eligible for the exemption in section 110(2), even for the instructional broadcasting

activities that are covered by the existing exemption. Another is the multiplicity of

accrediting bodies and lack of uniform national standards for accreditation.

One way around this latter concern could be to establish uniform national standards for eligibility in lieu of accreditation. These standards could be developed by

the Department of Education and incorporated into the bill or into regulations

under Title 17.

Question 2: Many sponsors of distance education programs are not purely ‘‘nonprofit.’’ Some non-profit schools have begun to engage in distance education for profit, some commercial entities are forming partnerships with non-profit institutions to

offer distance education, and some commercial textbook publishers, like Harcourt

General, want to provide full service distance education programs for accredited college degrees directly. Competition between the non-profit and for-profit distance

learning programs is good for the country. Do you think that retaining the non-profit requirement in current law helps non-profit educational institutions compete?

Answer: The Copyright Office analysis on the qualifier issue was based on basic

copyright principles. We did not undertake an analysis based on competitive effects.

In our 1999 Report, the Copyright Office recommended maintaining existing standards of eligibility for the exemption. At the same time, we acknowledged that the

lines between for profit and non-profit institutions were becoming blurred and that

there was widespread support for requiring accreditation as a condition for eligibility.

Now, nearly two years later, the lines have blurred even further. Nonetheless, we

still view the non-profit criterion as an appropriate dividing line, perhaps in conjunction with one or more additional criteria. (See response to Question 1.)

Question 3: The bill contains safeguards to minimize the risk to copyright holders

that the use of works under the expanded exemption could result in copyright piracy. Among those safeguards is a provision requiring the school to use ‘‘technological measures that reasonably’’ prevent unauthorized access and dissemination.

Could you describe the technological measures that copyright owners are using

today to minimize the risk of unauthorized downstream use of copyrighted works

in distance learning programs?

Answer: When we prepared our report in 1999, we noted that technologies to prevent unauthorized downstream copying were under development, but not yet in

widespread use. We are aware of no significant change in the intervening two

years.Q02

Question 4: Some copyright owners have argued that distance learning is flourishing and that expanding the scope of the exemption provided in section 110(2) may

interfere with the primary market of educational publishers, if distance educators

can get this material for free under the exemption. The bill expressly removes from

the coverage of the exemption ‘‘work produced primarily for instructional use’’ since

we want educational publishers to have the incentive to invest in and publish innovative educational materials that copyright protection can provide. Do you see any

risk to publishers of educational materials from expansion of the distance education

exemption in the limited fashion proposed in the TEACH Act?
59

Answer: The Copyright Office believes that the recommendations in our 1999 Report, as implemented in the bill, represent a balanced approach that minimizes the

risks to educational publishers. The bill, with one important exception, preserves

the same balance struck in the present copyright law, updating it to account for digital technology.

The principal difference from the balance struck in 1976 is the addition of categories of works other than nondramatic literary and musical works. In preparing

our recommendations we were persuaded that expanding the exemption to include

other categories of works was appropriate and necessary to permit distance educators to make the best pedagogical use of the technology of digital distance education. Rather than being merely a direct substitute for instructional broadcasting,

digital technology enables a more compelling teaching experience which often requires the use of multimedia and other materials. However, the expansion to additional categories of works is balanced by confining the exemption to performance of

‘‘reasonable and limited portions’’ of such works, and requiring that they be used

in the course of an instructor-mediated class session.

We are aware that some content owners have expressed concern about the application of the existing exemption from the public display right to literary works in

the context of digital distance education. Specifically, they are concerned that permitting the display of entire literary works in the context of digital distance education has a much greater impact on copyright holders that permitting the display

of entire works for purposes of instructional broadcasting. Congress, in exempting

entire works from the display right in 1976, did not intend to permit uses that were

more extensive that those that were possible under the technology of the time (e.g.,

holding up a book for the camera to see). We believe that the concern of the copyright owners is addressed through the limitation of permitted displays in amended

section 110(2) (A) to those made ‘‘as an integral part of a class session.’’ Further,

it is the view of the Copyright Office that by specifying that the copy of the work

from which the performance or display is transmitted must already be in digital

form, Congress ensures that the exemption does not itself authorize digitizing

works. Such authorization would need to be obtained from the copyright owner, or

found in another provision of the law such as fair use. Technological protection

measures provide publishers of educational literary works with yet another safeguard against use by persons other than those enrolled in the class and against unauthorized retention or downstream use.

Question 5: To encourage the use of the Internet in distance learning, the TEACH

Act would expand the distance education exemption in current law to permit the

reproduction and distribution of copyrighted works to the extent technically necessary to transmit the work otherwise covered by the exemption. These copies are

not to be retained any longer than necessary to complete the transmission and, if

they are, the exemption will no longer apply. Educational institutions have raised

a concern over caching, which is an automatic storage of a copy in an Internet Service Provider’s server or a user’s browser to make the Internet run more quickly. The

school doing the transmitting of a copyrighted work under the exemption may have

no knowledge of or control over the caching of copies of the work, even though such

caching might result in potential liability for the school. Should additional language

be added to the bill to make clear that such automatic caching would be covered

by the expanded exemption and, if so, what language would you suggest?

Answer: Yes, language should be added or substituted to address concerns about

institutional liability for caching. Pages 4–6 of my testimony discuss the caching

issue in detail. The Copyright Office is presently working with the affected parties

to craft appropriate language to propose to the Committee.

Question 6: Both the Copyright Office report and the report of the Web-Based

Education Commission headed by Senator Bob Kerrey noted that educational institutions have difficulty with licensing for digital distance education. Even after

schools determine who the copyright owner is, they often face delays in locating the

owner, obtaining permission and then may incur substantial licensing costs. The

TEACH Act proposes a study by the Copyright Office on the licensing problems encountered by schools. Are there any steps being taken by schools or copyright owners to make the licensing process easier to understand and to pursue?

Answer: The Copyright Office lacks sufficient information to answer this question

at this time.

Question 7: The bill requires the educational institution to limit reception of an

exempted transmission to enrolled students or government employees ‘‘to the extent

technologically feasible.’’ In addition, the bill requires the educational institution to

apply technological measures ‘‘that reasonably prevent unauthorized access’’ to the

work.
60

Question (a): Would the fact that these requirements are not identical to each

other pose a problem for educational institutions to comply or are the requirements

complementary?

Answer: After further review of the language of the bill, we have concluded that

the requirements are complementary, and refer to two different technological controls. The condition in subparagraph (C), appearing at lines 5–7 on page 3 of the

bill, relates to controls over access to the transmission—e.g., who can access the material from the university server. The condition in subparagraph (E)(ii), appearing

at lines 5–7 on page 4 of the bill, relates to access control measures that are to be

applied to the work itself—e.g., persistent file-level access control technologies—so

that the work cannot be accessed if it is somehow further distributed

Question (b): Do you believe these requirements would impose any obligation on

educational institutions to use technology to prevent students from freely

downloading the materials transmitted?

Answer: The bill requires educational institutions to prevent students from freely

downloading the materials transmitted by requiring (a) that the transmission be

limited to enrolled students ‘‘to the extent technologically feasible’’; (b) that the institution use technological measures to reasonably prevent unauthorized access to

or dissemination of the work; and (c) that technological protection measures used

by the copyright owner not be interfered with. Each of these conditions require the

use of technology.

Question (c): What degree of protection would be ‘‘reasonable? ’’

Answer: Reasonableness would vary depending on such circumstances as the effectiveness of the protection, the types of protection available in the marketplace, and

the degree of risk that particular content will be subject to unauthorized use.

Questions for Marybeth Peters and Allan Adler:

Question 1: It has been almost two years since the Copyright Office issued its report on distance learning and made its legislative recommendations. Are there any

new developments, new concerns or significant advances in technology that would

affect any part of the analysis in that report?

Answer: The Copyright Office has received no information in the interim that

would lead us to change the conclusions that we drew in the Report.

Question 2: The Copyright Office report noted that access control measures to

copyrighted works, such as passwords, were already in widespread use, but technologies that control post access uses for all types of works were not widely available. Are technical measures now more readily available to control post-access distribution of works and, if so, please describe those that are available?

Answer: While the Copyright Office has not completed any study of this issue, we

have received anecdotal evidence that such technologies are not yet available.

Responses of Gerald A. Heeger to questions submitted by Senator

fThurmond

Question 1: Mr. Heeger, Subsection 1 of Section 2 of the proposed legislation

would broaden the Section 110(2) exemption to allow educational institutions and

government entities to utilize the performance of audiovisual works under limited

circumstances. Should we refrain from legislative activity due to the rapid development of technology and licensing systems? Would it be advisable to take a ‘‘wait and

see’’ attitude, allowing the market to handle our concerns first? It appears that

copyright owners are concerned about broadening the exemptions because of the

possibilities of unauthorized downstream use of copy righted material. If we delay

the enactment of legislation in this area, will technology develop to the point of allaying the fears of copyright owners?

Answer 1: The primary need in this area of copyright and exemptions is for parity.

Whatever is possible and allowed in the classroom should also be possible and allowed in the online environment. To delay this will frustrate the emergence of distance learning in accredited institutions. The current situation puts an unnecessary

burden on institutions that is difficult for them to handle. S. 487 contains a number

of safeguards in addition to technological protections, such as portion limitations,

that address concerns of the copyright owners. The sooner that we can move in the

direction of the proposed legislation, the sooner that it can be demonstrated that

these safeguards are effective, and the sooner we can move to greater cooperation

in licensing.
61

Question 2: Mr. Heeger, the proposed legislation would require educational institutions to utilize measures designed to protect copyright owners in exchange for the

broadening of Section 110 (2)’s exemptions. What will be the costs incurred by educational institutions and government entities in complying with these protective

measures, i.e., instituting policies, providing information to facility and students,

and purchasing appropriate software.

Answer 2: It is clear from experience that universities have implemented strong

policies for following appropriate copyright laws with their faculties and students.

I am unable to estimate the cost of compliance, but those costs could pose a problem

if, for example, S. 487 were to obligate universities to employ technological protections that were prohibitively expensive. It is important that S. 487 stipulate that

universities employ technological measures that are ‘‘technologically feasible and

economically reasonable.’’ Parity with what happens in a face-to-face classroom is

what is necessary. The enforcement objectives should be the same in either case,

and online requirements need to be reasonable.

Question 3: Mr. Heeger, some educational institutions are considering the establishment of for-profit subsidiaries in order to provide distance education. This bill

would apply to non-profit educational institutions. Will for-profit subsidiaries of educational institutions be the wave of the future, thereby frustrating our current reform attempts.?

Answer 3: There needs to be a distinction between for-profit teaching institutions

and more limited for-profit Subsidiaries. For the most part, for-profit subsidiaries

of non-profit institutions have been organized for specific functions separate from

the instructional functions of the university, for marketing of developing course materials, for example. All non-profit universities, regardless of how innovative, intend

to continue operating as non-profit teaching and research institutions. The creation

of new for-profit subsidiaries shouldn’t frustrate progress in the area of copyright

agreements.

Responses of Marybeth Peters to questions submitted by Senator

fThurmond

Question 1: Ms. Peters, the Copyright Act is reflective of the teaching environment

in the 1970s when there was a great proliferation of distance education utilizing

analog technology. Wouldn’t a broadening of Section 110 (2)’s exemption rights to

include limited rights of reproduction and distribution maintain current policy objectives, only reformatting the statute to conform with technologies inherent in digital

systems? Specifically, do you foresee any unexpected harm to copyright owners as

a result of this seemingly innocuous change (assuming technology is implemented

to protect unauthorized downstream use of copyrighted material)?

The broadening of the section 110(2) exemption to cover the rights of reproduction

and distribution to a limited extent is intended to preserve, in the face of technological changes, the policy objectives embodies in the current provision. The additional rights are covered only to the extent necessary to permit institutions to carry

out permitted transmissions over a digital network. In addition, institutions are required to use technological measures to assure that only the students for whom a

transmission is intended can use the copyrighted material in the transmission. The

Copyright Office does not foresee any unreasonable harm to copyright owners as a

result of this change, although copyright owners have raised concerns with regard

to the display right (which is discussed below in my response to Question 3).

Question 2: Ms. Peters, Subsection 1 of Section 2 of the proposed legislation would

broaden the Section 110(2) exemption to allow educational institutions and government entities to utilize the performance of audiovisual works under limited circumstances. Should we refrain from legislative activity due to the rapid development of technology and licensing systems? Would it be advisable to take a ‘‘wait and see’’ attitude, allowing the market to handle our concerns first? It appears that

copyright owners are concerned about Broadening the exemptions because of the

possibilities of unauthorized downstream use of copyrighted material If we delay the

enactment of legislation in this area, will technology develop to the point of allaying

the fears of copyright owners?

I recommended expanding the exemption to include audiovisual works because of

educators’ concerns. They indicated that there was a strong pedagogical value in

using this important and popular category of work for teaching purposes and noted

the difficulty of obtaining digital licenses from owners of audiovisual works. Additionally, digital distance education is using more and more multimedia works, which
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incorporate audiovisual works and may be considered audiovisual works themselves.

Instructional audiovisual works are excluded from the exemption (as are all instructional works) and the use of audiovisual works is confined to limited and reasonable

portions (e.g., a film clip, not a substantial part of a film). I believe that the proposed expansion safeguards copyright owners, especially since the proposed exemption is contingent on the use of technological measures that control downstream

uses of copyrighted works.

Question 3: Ms. Peters, you stated in your testimony that Subsection 2 of Section

2 of the proposed legislation would prohibit the display of copyrighted materials in

their entirety because entire works could not possibly be ‘‘an integral part of a class

session,’’ as required by the bill. Wouldn’t this language allow instructors of courses

to provide substantial portions of copyrighted materials such as books, justifying the

substantial portions as being integral to a students preliminary understanding during the class session? Why not amend the bill to treat displays the same as performances and treated in Subsection 1 of Section 2 of the bill, which requires reasonable

and limited portions of the performance of a work?

The Copyright Office believes that a fair interpretation of the limitation that requires displays exempted under section 110(2(A) to be made ‘‘ as an integral part

of a class session’’ would not permit the consumption of substantial portions works

such as textbooks, notwithstanding the fact that the exemption for the display of

works is not subject to quantitative limitations. A ‘‘class session,’’ even in the online

world, must be limited in scope and duration. Even if an instructor has the legal

right to display an entire text, the ‘‘class session’’ limitation would not permit the

student to consume it in its entirety. There are problems inherent in limiting the

display right. For example, it would be impractical and unreasonable no to permit

and instructor to display an entire painting, photograph, or short textual work such

as a poem. Moreover, since the current exemption permits the display of entire

works, such a limitation would bar activities using analog technology that are currently permitted.

Question 4: Mr. Peters, the fair use doctrine incorporated into Section 107 of the

Copyright Act is supposed to be technology-neutral. In you opinion, does digital

technology add new ambiguities to the fair use doctrine?

Note really. As you have stated, the fair use exception, section 107 of the Copyright Act is technology-neutral. Courts have been applying the fair use doctrine to

numerous cases occasioned by changing technologies in the past decades without the

exemption itself growing any more ambiguous. Courts are today applying section

107 to works in digital from with no greater conceptual difficulty than in fair use

cases generally.

There is much confusion and misunderstanding about the fair use doctrine, especially in a digital environment. I did suggest some clarification through report language that explicitly addresses certain fair use principles and confirms that the doctrine applies to activities in the digital environment, as well as inclusion of some

examples of digital uses that might qualify as fair use. The law, however, should

not be amended.

Question 5: Ms. Peters, would it be advisable to legislate some minimum levels

of fair use in lieu of amending the language of Sections 110 (1) and (2)? It appears

that educational institutions are wary of using fair use as a safe harbor because of

the lack of certainty associated with it. Do you think we could accomplish the same

policy objectives by attempting to legislate some minimum uses of copyrighted

works that would qualify as ‘‘fair use’’?

Although there is a the lack of certainty inherent in the use of the doctrine of

fair use as an affirmative defense to copyright infringement, it would nonetheless

not be desirable to legislate minimum levels of fair use in lieu of amending the language of section 110(2). Fair use is intended to be a balancing test of factors that

operates independently from the other specific exemptions and limitations in sections 108 through 122. Specific exemptions already exist in section 110(1) and 110(2)

to provide educators with strictly delineated parameters for their use of copyrighted

works. Indeed, section 110(1), which addresses face-to-face teaching activities, appears to be functioning appropriately, and I am not aware of any calls for legislative

change.

Question 6: Ms.. Peters, the proposed legislation would require educational institutions to utilize measures designed to protect copyright owners in exchange for a

broadening of Section 110(2)’s exemptions. What will be the costs incurred by educational institutions and government entities in complying with these protective

measures, i.e., instituting policies, providing information to faculty and students,

and purchasing appropriate software.
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Educational institutions already take some responsibility for the security of materials they disseminate; use of passwords and other access controls is widespread.

Moreover, many also require compliance with copyright policies and inform students

and faculty about the law. The only issue seems to be technologies to prevent unauthorized downstream copying of copyright works. At present, these technologies are

not widely available in the marketplace; thus the actual cost is not known at this

point in time. Nonetheless, we believe that the use of such technological safeguards

is an important part of the policy balance should the section 110(2) exemption be

extended to the digital realm.

Question 7: Ms. Peters, Subsection 4 of the Section 2 of the bill would make the

protection of the exemptions contingent upon the use of ‘‘technological measures

that reasonable prevent unauthorized access to and dissemination of the

work....’’ What does ‘‘reasonable’’ mean in this context? Will educational institutions be pulled into litigation over whether their technological measures are reasonable?

I do not believe that educational institutions will be forced into excessive litigation

over whether their technological measures are reasonable, because in all likelihood,

most educational institutions will make good faith efforts to institute effective technological measures to prevent unauthorized access and dissemination. However,

courts have always established standards for what is ‘‘reasonable’’ under the law.

Reasonableness would vary depending on such circumstances as the effectiveness of

the protection, the types of protection available in the marketplace, and the degree

of risk that particular content will be subject to unauthorized use. What is clear,

however, is that the technical measure does not necessarily need to be 100% effective-indeed, no technology can be 100% effective.

Question 8: Ms. Peters, some educational institutions are considering the establishment of for-profit subsidiaries in order to provide distance education. This bill

would apply to nonprofit education institutions. Will for-profit subsidiaries of educational institutions be the wave of this future, thereby frustrating our current reform attempts?

The Copyright Office analysis on the qualifier issue was based on basic copyright

principles. In the 1999 Copyright Office Report on Digital Distance Education, I recommended maintaining existing standards of eligibility for the exemption. At the

same time, the Report acknowledged that the lines between for-profit institutions

were becoming blurred and that there was widespread support for requiring accreditation as a condition for eligibility. Now, nearly two years later, the lines have

blurred even further. Nonetheless, I still view the non-profit criterion as an appropriate dividing line, perhaps in conjunction with one or more additional criteria. The

Copyright Office doesn’t believe that limiting the exemption to nonprofit institutions

will frustrate the reform efforts. A basic principle of copyright is the for-profit entities engaged in for-profit activities should license or purchase copyrighted materials.

Question 9: Ms. Peters, when digital technology is used to transmit abroad, what

are some of the options we have to address choice of law problems? Can these types

of problems be solved in the context of current statutes and treaty provisions?

When educational institutions in the United States use digital technology to

transmit courses abroad, a number of legal questions relating to choice of law are

raised. Unfortunately, under current legal doctrines, answers to these questions are

still unclear. In the traditional analog world, the generally accepted view is that

questions of authorship and ownership are governed by the law of the work;s country of origin, while questions of rights and remedies are governed by the law of the

country where the infringing act takes place. In the digital realm, however, the situs

of the relevant act is not always clear. Resolution of these difficult issues has been

a focus of attention among law professors and others in recent years. However, at

this point we cannot say whether or not these issues can be solved within the current framework of treaty provisions and domestic law.

SUBMISSION FOR THE RECORD

Statement of Hon. Maria Cantwell, a U.S. Senator from the State of

Washington

Chairman Hatch and Senator Leahy, thank you for calling this hearing. Distance

learning programs are critical to meeting the goal of bringing quality education to

all Americans.

From my perspective, distance education offers two great opportunities: first, providing a better education for those in our rural communities, and second, providing

job training and retraining to America’s workforce to meet the needs of the New
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Economy. Distance learning is a critical component in our strategy to build a better

educated, more fully employed—and employable—America.

But as we consider changes to copyright law, I want to sound a word of caution.

Intellectual property has been a cornerstone of our prosperity. When we consider

changes to intellectual property law, we should be sure that the technology is working in our favor. I understand that some here today are concerned that the exemption that we are considering is inappropriate for two principle reasons. First, they

argue it is premature since the marketplace hasn’t had adequate time to develop.

Second, that technological protections for intellectual property are not widely in use

in distance education programs, and therefore, the bill is based on a false premise.

As to the first point, I disagree, but as to the importance of technological protections, I share the concern to some extent.

LET ME EXPAND ON EACH OF THESE POINTS:

One of the greatest promises of distance education is the ability to make a high

quality education affordable and accessible to those in hard to reach rural areas

throughout the U.S. I have made it a priority to enhance federal funding for rural

distance education—and distance medical care programs. This is an area where

technology has proven to be extremely valuable. As we enhance federal funding,

Congress must also examine federal law to see where the law might impair the deployment of new and innovative programs.

To maintain our edge in the global economy we must ensure that every American

has the opportunity to learn the necessary skills. Distance learning programs are

important to retraining our existing workforce and bringing into the economy those

communities with historically high unemployment rates. Very simply put, the

growth of distance education will improve our ability to fully employ our domestic

workforce.

That said, we must act with the awareness that intellectual property is the underpinning of the traditional hightech industries, those directly involved in developing

hardware and software, and other industries equally critical to the growth of our

domestic economy: publishing, entertainment and the media. And I have heard concerns that this bill may not adequately protect the intellectual property produced

by these industries.

Specifically, I have heard two concerns I want to focus on: First, that the distance

education marketplace is nascent and rapidly changing, and that the education and

copyright communities haven’t had a chance to work through copyright issues. To

this I respond that distance education is likely to be forever evolving, with infinite

variations and innovations in technological and teaching models. We need to consider these circumstances as we look at revising the law, but we need not wait for

the industries to ‘‘settle down’’ to identified business models or routine practices.

The second concern that I have heard is that as we consider amending copyright

law to make it easier for teachers to use copyrighted materials in their online classrooms, we make sure copyright owners have adequate assurance that their works

will be protected from unauthorized use or distribution. I share this concern since

adequate technological protections for intellectual property are not yet widely available to online educators. So I am interested in hearing more about how educators

are currently addressing the need to protect copyrighted materials, and how in the

future they will provide adequate assurances to copyright owners that their materials will not be distributed beyond their bona fide students.

I would be interested in working with the Chairman, Senator Leahy, educators

and the copyright community to encourage wider use of appropriately protective

technologies and I look forward to doing what I can to help move this bill forward

expeditiously.

I look forward to hearing from our witnesses today and thank you all for coming.

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