After watching this interview, I have to say that I'm surprised that the differentiation that Hosler is drawing out is based on free vs. paid speech. He essentially makes the case for free use of any material with the exception of advertising which ultimately looks rather like a liberal version of free speech. I'm pretty sure that this distinction is actually artificial- where does the line between advertisement and non-advertisement begin and end? One could look at the Spice Girls as an advertisement for Pepsi (or themselves), or the licensing of material for advertising (think of the Army's use of Godsmack's songs for recruiting). Both of these instances are more complex than simply using material for advertising, yet both express a reality of how music is actually used. The question could ultimately be pushed in to a corner by asking if any art which exists as a commodity could ever not be advertising?
See: Minnesota Stories: Daily Videoblog: Negativland's Mark Hosler on Copyright
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