NEW YORK -- U.S. Congressman Rick Boucher, moving to strengthen "fair use" provisions under federal law, said he is introducing a bill that would essentially restrict the record industry from selling copy-protected CDs.

He also said he would introduce a bill within the week that would update the U.S. Office's Arbitration Royalty Panel (CARP), which he has criticized as being mired in outdated laws that tilt against Webcasters regarding royalties on streaming music.

During a keynote address to the seventh annual Plug.IN digital music conference sponsored by Internet research firm Jupiter Media Metrix, the Virginia Democrat urged the record industry to reconsider introducing the copy-protected CDs.

"I'm just a little perplexed to understand the rationale for this. There will be a very heavy cost that the industry will pay when copy-protected CDs are introduced," Boucher said.

While conceding later that copy-protected CDs aren't against existing law, he said their introduction wouldn't even impact the music piracy the music industry is trying to stop. Instead, the move will "anger millions of their best-customers who have become accustomed of making copies [of CDs] for their own use," which is allowed under "fair use" provisions of law.

He said he would introduce legislation that would essentially codify "fair use" provisions of law (that have been implied but not necessarily guaranteed). He also wants to ease up some of the more copy-restrictive provisions of the 1998 Digital Milennium Act, whose pay-per-use provisions on copies he has criticized as a threat not only to "fair use," but to innovation, idea exchange, even First Amendment guarantees on free speech.

Originally introduced in August of 2001 as the Music Online Competition Act, the bill aims to make seven changes to law that Boucher, who also sits on the House Commerce and Judiciary committees, said help advance the legal distribution of music online.

The provisions in the bill, which are expected to be up for debate by September at the latest, include the following:

Change the "Ephemeral" Recording Exemption of law. Current law says one copy is permitted but must be deleted within six months. The changes would allow Webcasters or broadcasters, for example, to make a copy for each format in which music is delivered, as well as for different bit rates for the speed of downloads. In all, about 60-80 copies would be necessary to accommodate Internet technologies, he said.

Expand existing selection for sampling of songs, much the way offline music stores allow people to listen to tracks before buying.

"Our bill allows retailers to use a central server to serve multiple retail establishments and applies the exemption to online retail establishments (such as Amazon.com or CDNow) that offer music samples of 30 or 60 seconds to promote sales of the associated sound recordings," Boucher said.

Allow back up copies of music on a hard drive, much the way software copies are backed up in case a computer hard-drive has to be rebuilt. Under existing law, users can't back up music they download with, say, RealJukebox software, although they can back up the software itself.

Address older "mechanical" rights of law by creating "safe harbor" provisions. This would let a user or potential licensee of music pay a kind of "royalty deposit" with the federal office while the sometimes lengthy search for a owner or publisher is underway.

Require "non-discrimination" in the licensing of music inventories by major labels in the music industry.

Boucher said the idea is if a record label licenses a wholly-owned subsidiary it created to deliver online music, it needs to give a comparable license to a competitor. "I think it's essential that we engender a positive competition in the delivery of music on the Internet and avoid a major duopoloy" among major record labels that together control about 80 percent of existing music libraries.

Require an examination of programming restrictions.

Boucher said current law restricts the number of tracks that Webcasters or digital satellite radio broadcasters can play within a given three-hour period. The theory is to restrict the recording and pirating of digital works. But the law does not apply to terrestrial broadcasters. "It's what you might call an asynchronous law," he said of current DMCA provisions. "My solution is let's not apply it to anybody."

Require direct payment to artists: Current law says royalty payments are to be shared among the recording companies and performing artists. "Our bill requires that these payments instead be made directly to the artists or to a collective organization representing the artists."

Boucher later said he expected recording industry to lobby heavily against the provision proposing non-discrimination of licensing among music labels. Other provisions in the bill such as buffered copies, back-up rights and performance royalties with respect to downloads and streams, have already been endorsed by the U.S. office and are expected to meet with less resistance.

"The music industry needs to take off the brakes," on copy-prohibiting tecnnologies, Boucher said. "The vast majority of the Internet consuming public is honest" and would be willing to pay for online music, especially if "the music industry would agree to put its entire inventory online."

Boucher also said he is introducing legislation within a week that would update what he called outdated ratemaking rules regarding CARP, the royalty dispute body. "We need to scrap the CARP and adopt a new standard," Boucher said, adding that one proposal is to confer to federal district judges some of CARP's ratemaking jurisdiction.

This publication's parent company, INT Media Group, recently purchased the remaining assets of Jupiter, including its research and events business. However, this event was not included in the purchase.