is already subject to a senior security interest. Without this clause, subsequently produced intellectual property would be covered by a financing statement only if that statement contained a specific after-acquired property clause. Requiring a specific reference would give the author or inventor who foresees acquiring additional copyrights or patents the chance to negotiate the language employed in the financing statement.

Admittedly, section 3(b)(3)(6) could address this problem. That section makes the lender responsible for any damages that the debtor suffers due to an improper financing statement. However, as the Proposal is written, a lender is perfectly free to file a federal financing statement containing broad language like "general intangibles," even if the security agreement does not actually reach after-acquired property. Therefore, if the damages action provided by section 3(b)(3)(6) is deemed an adequate deterrent, it should be amended to cover the problem of after-acquired property.

I thank the Subcommittee for the opportunity to present my views on these matters, and hope that my comments will help you in any further action you may take on these proposals.

Mr. COBLE [Presiding]. Thanks to each of you.

We have been joined by the distinguished gentlemen from Tennessee, Virginia, and Massachusetts, Messrs. Jenkins, Boucher, and Delahunt. Good to have them with us.

Ms. Schroeder, how do you respond to concerns of educators that it is too difficult and too impractical to license works for use in digital distance education?

Ms. SCHROEDER. Well, I think iCopyright answered that. They are tying to make it easier, and licensing certainly is going on. There are many of our publishers very excited about distance education, wanting to get into that market.

But the other point I was trying to make, too, not only in licensing but orphan works, a lot of these things are issues where we need to update rights holders being able to participate, and do it quickly. And I guess what I am saying is where you really find that we are going in distance education, is moving very rapidly with good products right now and they are getting-they are getting there by either producing it themselves or by public domain or by using fair use or by using licensing. So licensing is very broad based, and people are using them a lot.

Mr. COBLE. Mr. Attaway, if Congress followed the recommendations of the Copyright Office and expanded the categories of works covered by 110(2) to include audio-visual works, how would the market of audio-visual works be affected?

Mr. ATTAWAY. It is unclear. If the requirements of effective technological protection against unauthorized access and use actually are met, I think there would be very little impact. Our concern is that until this technology actually exists, it is very dangerous to change the law permitting this type of activity without defining precisely the kind of technological safeguards that need to be applied. And if they are not applied, the impact can be horrendous. You can imagine recent motion pictures appearing on the Internet. That is going to be a problem for us in any case, but it will be materially exacerbated if educators have the legal right to transmit this type of programing to their students digitally and then it leaks out onto the Internet and elsewhere. That is our concern.

Mr. COBLE. Ms. Gasaway, the Copyright Office Report suggests amending section 110(2) to cover certain digital distance education activities. It has also been suggested that in lieu of amending the law, that Congress should encourage the parties to continue pursu

ing fair use guidelines to address these issues. Do you believe that guidelines are helpful in this area and do you believe that they could substitute for legislative changes?

Ms. GASAWAY. Mr. Chair, I do not believe that guidelines can substitute. I come at this as a warrior for guidelines, having been the principal draftsperson on the failed CONFU attempt on distance learning guidelines and spent about 22 years working on that. And even during that time period, what we found was the technology changing so rapidly that anytime we begin to get a handle on what was happening, the technology changed considerably. Beyond that, I think the CONFU process has actually poisoned the environment for guidelines right now and that we are better served to look at a statutory exemption that has protections for the copyright holders. Maybe in the future sometime we could look again toward some best practices that we could develop, that sort of thing. But I think guidelines right now are pretty much out of the question as far as really solving the problem because when you have a statute that says you can't use these works, how do you work fair use, other than a small portion? It just doesn't work very well.

Mr. COBLE. Thank you. I have questions for Mr. Ochsenreiter and Professor Cross but I will suspend. I will withdraw until we go the full round. The gentleman from California.

Mr. BERMAN. Thank you very much, Mr. Chairman. I think Mr. Ochsenreiter on this panel solved the problem of the second bill; we just record the liens on copyrights on iCopyright and maybe privatize the Copyright Office. I don't know. In any event, it was a very interesting proposal you spoke about.

I would like Pat and Fritz to respond to the two professors' points because-particularly Professor Gasaway's point. She says she doesn't dispute the fact that technological protections aren't there and she says, but look, a lot of distance education is not digital, and therefore not changing these sections because of the absence of the technological protections will impede non-digital distance education. And, in fact, my guess is then you would-would you support a proposal that eliminated the notion that transmissions include digital transmissions or specifically excluded digital transmissions in order to further non-digital distance learning at this particular point and then we can evaluate on a yearly basis whether or not the protections are reasonable and effective?

Ms. GASAWAY. Ten years ago I certainly would have supported that. Ten years ago.

Mr. BERMAN. But it wasn't particularly meaningful?

Ms. GASAWAY. Well, it was certainly meaningful for those of us in education who were doing distance-

Mr. BERMAN. No, no, I wasn't meaning to exclude digital.

Ms. GASAWAY. But today excluding digital is very shortsighted and that is what CONFU tried to do was to exclude digital and one of the reasons those guidelines were never accepted was because they did not deal with asynchronous delivery, and so I think it really doesn't solve the problem.

Mr. BERMAN. But then you can't-I have to say, but then you can't argue that we are impeding non-digital distance education even though there is not adequate copyright protections. In other

words, the thrust of your argument was, yeah, I recognize we don't have adequate technological protections in the digital world but by not changing anything, you are impeding non-digital distance education; but now you are insisting we include the digital world.

Ms. GASAWAY. You asked me if I thought it would work. And, yes, it would work for the non-digital. But here we are faced also with the digital. And suppose that in 6 months, then, we have those technological measures developed; do we then have to come back through a whole hearing process? Why don't we have technology-neutral kinds of things——

Mr. BERMAN. Who decides when the technology is there?

Ms. GASAWAY. I suppose the industry does that, finally says Mr. BERMAN. Which industry? The distance learning industry? The copyright protection industry?

Ms. GASAWAY. The industry that develops software that looks at kinds of protections. I mean, I think there will be industry standards. If the RIAA is willing to let their music be distributed digitally, then at some point they are going to have to be satisfied that there are those controls there. I don't think it is up to us to sort of name what they are. I am not a technology person. I can't do that. But there are people who are technology folks and can specify what those technologies are.

And I want to say I don't know whether the technology is there today or not. I don't think it is and I am hearing from the content providers that it is not. But it may be, or it may be there tomorrow or another week or 6 months. We just don't know.

Mr. BERMAN. Professor Cross, do you think it is there?

Mr. CROSS. Like Professor Gasaway, I have no reason to think it is there. I do know that parts of it are there. I think password controls are fairly effective. I think it would not be that difficult to limit access to the work to students actually enrolled in a class. That goes a long way toward controlling dissemination right there. Mr. BERMAN. I think the university-the university non-credit course-the direction of the film industry in 1999-for 50 cents a student, digitally transmitted could produce a very large classroom when you include entire audio-visual works within this.

Mr. CROSS. I fully agree, but if that is-I don't really see universities doing that. We can do the same thing now in class. We could set up a huge auditorium, charge 50 cents a person and show films in the classroom environment. It is not happening.

Mr. BERMAN. It is not a big enough auditorium. There will be a university in an unlimited auditorium. But in any event, just Mr. Attaway, Ms. Schroeder, I would be interested in your take on their formulation.

Ms. SCHROEDER. I just want to quickly say I have never seen a law that could create technology. The Copyright Office and I think both of the witnesses are saying they don't think the technology is there right now or at least they are not aware of it. And if you say then passing the law will incentivize companies to go out and devise the technology, I don't really think that has ever happened before. That would be very historic. There are a lot of people working on the technology but it is not there and a new law probably won't make it happen.

The other thing I think you have to realize is part of the pricing of this is going to be whatever it costs people to protect post-access that is illegal. And that means you will have to buy that technology, so I think we all have a vested interest in making sure that the technology is available and is affordable because it will be part of the pricing.

Mr. ATTAWAY. The only thing I can add is that if there is a problem with non-digital distance learning, I haven't been aware of one; but if there is one, then I think that is something that we can address and I am perfectly willing to address it. But until the technology exists in the digital environment to create the protection that everyone recognizes has to be there in order to make it work, I think it is premature to legislate.

Mr. BERMAN. Mr. Chairman, my time is up. If I could just, though, in one closing sentence say I believe that the folks that these two witnesses represent, the day there is reasonable technology protection available, the fastest people in the world to exploit that, to encourage distance education and quick licensing, will be these folks because it will be in their economic interest to do it. Mr. COBLE. I thank the gentleman. The gentleman from Tennessee, Mr. Jenkins.

Mr. JENKINS. Mr. Chairman, I don't have any questions at this time. I would be perfectly willing to yield my time to the gentleman from California if he would like additional time.

Mr. BERMAN. I will wait until we come around.

Mr. JENKINS. Or to the expert from the Commonwealth of Virginia.

Mr. COBLE. I thank the gentleman. And the gentleman from Virginia is recognized.

Mr. BOUCHER. Mr. Chairman, thank you very much. I would be remiss if I didn't say a word of welcome this afternoon to two veterans of the House Judiciary Committee, and we are very pleased to have former Congresswoman Pat Schroeder with us, former ranking member of this subcommittee, and also the gentleman from Kentucky, Mr. Mazzoli, who during his time on this committee chaired with great distinction the Immigration Subcommittee. We are delighted to have both of these former members with us. I am sorry to have to remind Mr. Mazzoli that in the days since he left, there has been a change here in the Congress. He is now seated on the wrong side of the dias.

Mr. MAZZOLI. It is probably not mine to respond, but I thank the gentleman. I thought about it after I walked up here. I appreciate this.

Mr. BOUCHER. We are delighted to have you up here nonetheless. Distance learning is a great thing for rural America. As a matter of fact, in my congressional district, which is entirely rural, consisting of 23 counties and cities, we now have a fiberoptic-based digital distance learning application that connects 55 high schools, community colleges, and 4-year colleges. It is a technology that accommodates voice, video, and data; and the legal foundation upon which it accommodates at least two out of those three applications is somewhat in question.

In my district, as in much of the rest of rural America, this is a way that students who are born and raised in counties that have

a small population and few financial resources can have access to the same advanced courses that the young people who are born in the wealthier localities currently have access to. And so through distance learning we are able to render distance unimportant, and the accident of the place of a person's birth doesn't determine the quality of that person's education. It really is a remarkable advance for rural Americans.

Back in 1976, Congress, recognizing that distance learning offered great opportunities for rural areas in particular but not just limited to rural areas, that other parts of the Nation also will benefit, enacted an exemption for the kind of technology through which distance learning was promoted in that day, and that was for broadcast technology. This was before the birth of digitization, and this broadcast analogue technology was reasonably well-encompassed by the exemption passed in 1976.

But now the world has changed and digital technology is increasingly used, and in my district it is exclusively used and we are using it to great effect. In the effort to make sure that what has been done by analogue technology and by the broadcast exemption can be done in the future, using digital technology, this Congress required the Copyright Office to examine what changes in law were necessary to achieve that result, and the Copyright Office, I think, has done an outstanding job in carrying forward that mandate and making recommendations to the Congress.

And so today I simply strongly want to urge that legislation be drafted at the earliest possible time to incorporate the very sound and well-considered recommendations of the Copyright Office, brought to the floor of the House as soon as possible, and passed during this 106th Congress. And I will very strongly be supporting that effort.

I do have a couple of questions and I would primarily like to address these to Ms. Gasaway and also to Professor Cross, and they concern various aspects of the Copyright Office's recommendations. First of all, there is some concern, I think, among the users of distance learning technology about the general availability and timeliness of licensing, and I would like for you to comment on the extent to which you perceive that to be a problem at the present time, the extent to which you perceive that-my glasses aren't really good now to pronounce this gentleman's last name but the gentleman from, I believe it is iCopyright.com.

Mr. OCHSENREITER. iCopyright.

Mr. BOUCHER. And the proposals that his company are now putting forth and their capabilities might be a solution to the inadequacy of licensing availability presently, and also whether you think perhaps we ought to, as we consider legislation, require that a follow-up study on the availability of licensing be performed perhaps 2 or 3 years from now, with a recommendation to the Ĉongress for any changes that we need to make to accommodate any remaining shortage in the availability or timeliness of licensing as it may exist at the end of that study period, and whether that would be a good idea.

I have used my time asking one question. I am sorry. Let me give you a chance to respond.