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Digital audio tape machines will soon be sold in US, despite some worries. Several companies will market system rivaling CDs for fidelity; record industry still seeks safeguards

Digital audio tape (DAT), the new recording technology that gives cassette tape the same high-quality, noise-free sound available on compact disc, has been the subject of intense record-industry lobbying in the United States. That lobbying has delayed its introduction here, even though DAT recorders have been on the market in Japan and Europe since early last year. At the consumer electronics show that ended last week here in Las Vegas, the consensus seemed to be that DAT machines will be marketed in this country by such companies as Sony, Kenwood, Casio, and Akai by April, whether or not Congress has resolved the record-industry concerns. ``The Electronics Industry Association has told manufacturers to proceed as quickly as possible with introducing the new machines,'' says Tom Mitchell, spokesman for Clarion, a leading manufacturer of audio equipment for automobiles. ``They feel, if the ball gets rolling, it will be very hard to stop. We support that position.''

Why has the record industry been putting on the brakes?

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Some American recordmakers argue that compact discs and professionally produced DAT recordings will be so easy to duplicate with the new technology that copyright violations of recorded material will skyrocket.

The industry has put forward two proposals about how to prevent either pirating of their product or, alternatively, the revenue loss that would result from pirating:

One proposal would require insertion of computer chips into the recording machines marketed in the US, which, together with specially encoded material in a specific ``slot'' in the recording frequency spectrum on professionally produced CDs or tapes, would prevent duplication.

Another alternative would involve a royalty on the sale of DAT recorders and blank tapes, whose revenues would offset projected record-industry losses from pirating.

Prototypes of recorders and tape were introduced here at the consumer electronics show last year by Sony and Onkyo, and four new, portable models were introduced this year by Casio. Prices range from about $1,200 to $2,000. Ford Motor Company has announced plans to offer DAT players in some 1988 luxury car lines, and Casio says it will test-market about 400 units beginning in April, but wide-scale marketing may still depend on what happens between now and April in Congress.

``Most manufacturers have been waiting to see what pending copyright legislation would obligate them to, in terms of microchip devices that are supposed to prevent duplication,'' says Casio president John McDonald.

In a seminar here at the show, a panel of congressional members and copyright experts brought visitors up to date on various legislative proposals, and gave opinions on what will happen in the future.

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``I do not believe that Congress will pass legislation barring the DAT machines from either being brought in or sold, or require that sound be degraded or include a certain coding device,'' said Rep. Robert Kastenmeier (D) of Wisconsin. As chairman of the House Judiciary Subcommittee on Courts, Civil Liberties, and the Administration of Justice, Mr. Kastenmeier has been responsible for most patent, trademark, and copyright laws passed in Congress in the last two decades. ``I don't think the US should be in the position of either trying to defeat new technology or keep it out,'' he continued. ``If you do it once,... is the US going to be continually asked to keep the technology out?''

During the 1985-86 congressional session, the recording industry tried to get a royalty tax imposed on all audio recorders and blank tape. While a tape tax did pass one subcommittee, the proposal eventually failed. When Congress convened a year ago, the recording industry tried to ride anti-Japanese sentiment in Washington by requiring that every DAT recorder sold include an anti-taping chip. In the spring of 1987, the House Energy and Commerce Committee passed an amendment of the trade bill that would have required every DAT recorder sold for one year to include an anti-taping chip. This provision was dropped from the trade bill before it was passed by the House.

When questions arose as to whether the anti-taping chip worked, Kastenmeier ordered the National Bureau of Standards to examine the process, which was developed by CBS Records and involves removing a small slice of the sound spectrum to make room for some specially encoded material that activates the anti-taping chip. Results are due in early March.

Despite the fact that results of the study aren't yet in, a House Energy and Commerce subcommittee approved a one-year ban on DAT machines without anti-taping chips, beginning when and if the legislation is passed. The bill is now before the full committee.

``Those of us who feel that this technology has a place in the US marketplace ... have our work cut out for us,'' said Rep. Joe Barton (R) of Texas. Representative Barton was a key DAT proponent during debates last fall in the Subcommittee on Commerce, Consumer Protection, and Competitiveness. But he sees the DAT issue as a back-burner item in the new Congress.

``You could poll the 435 members of the House, and I doubt very seriously if more than 50 could tell you what DAT is,'' Barton noted. Since DAT is such a low-profile issue, Barton admonished proponents to join what could be a close fight in which the one who squeaks loudest wins.

DAT machines are entirely legal under existing copyright law, according to Ralph Oman, head of the Library of Congress's copyright office. So it is essentially the prospect of possible legislative action that has kept DATs out of the US marketplace so far. ``The machines have many legitimate non-infringing uses, and..., if presented with the issues, the courts would not hold the DAT machine to be [an infringement of copyright],'' Mr. Oman said.

All the panelists agreed the DAT issue will become a top priority soon, galvanized by the April introduction of machines to the US. But the exact software technology to be marketed here is stalled, because of a sort of chicken-egg question: Will congressional action await DAT introduction into the marketplace, or will wide-scale marketing await congressional action?

``We've got to stop beating around the bush and go ahead and get the ball rolling,'' said Casio's Mr. McDonald. ``DAT is the coming technology, it's unstoppable. The recording industry has tried to stop every major innovation that has ever come along, starting with the introduction of 331/3 r.p.m. ... Then they always go on to make millions off the new technology.''

Indeed, the panelists said they had never been convinced by recording industry arguments that DAT infringed the rights or diverted profits of creative artists' works. ``We do have evidence from the Netherlands that [sales of] blank tapes are six times [those of] pre-recorded tape,'' said Oman, ``which suggests there is some displacement of sales.'' But Barton pointed out that sales in the US of pre-recorded tapes have been at record levels, even though analog tapes of records and tapes can be made at will.

``To my knowledge, no one has been able to prove that where the DATs are being sold in Japan and Western Europe, there has been commercial pirating,'' said Barton. ``And in the subcommittee hearings I've attended and private meetings with proponents of anti-DAT legislation, they talk about depriving the recording artists of their royalties. That hasn't happened in Japan or Europe, and I don't think we can expect it to happen to any large extent here.''

In closing the session, moderator Gary Shapiro pointed out that, compared with a year ago, the music industry has become less unified in its opposition to DAT. Groups such as Musicians for DAT and Independent Record Companies for DAT have been formed. And one major engineering magazine found that 90 percent of all record engineers opposed legislation banning DAT.

The Jan. 5 transfer of CBS Records, which devised the anti-taping-chip technology, to Sony Corporation, which makes and sells DAT machines, hasn't affected the CBS position, according to Robert Altshuler, vice-president for public information at CBS Records. ``The record industry around the world has a universal opinion that copyrights of musical material have to be protected,'' Mr. Altshuler says. ``Otherwise, consumers can just take our product for free, which would destroy the creative impulse, to some extent, or eliminate music altogether.'' He adds that the Sony takeover was made with assurances from Sony management that it had no intention of dictating where CBS should stand on the copyright issue. ``They understand our feelings and are being sensitive at this time,'' said Altshuler.

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