Congressman Jason Chaffetz, R-Utah, Congressman Jared Polis, D-Colo., and Senator Ron Wyden, D-Ore. have introduced legislation that would help create a more level playing (and paying) field for those broadcasting radio tunes whether on the Internet or over the airwaves. The Internet Radio Fairness Act would end provisions in the Copyright Act that favor incumbents over new entrants offering online music. Various digital radio providers would pay similar royalty fees instead of the current system that charges webcasters much higher rates than other digital radio providers.
The following can be attributed to CCIA President & CEO Ed Black:
“As consumers demand new ways to listen to music using the latest technology, we need to update the laws to ensure that new competitors do not face discrimination as they enter the marketplace. Charging different rates for different digital radio providers is fundamentally unfair and goes against the interests of an economy that has time and again chosen to boost competition and innovation.”
“While there are no doubt some who would like a pay per view or per listen business model for radio, that’s out of tune with what the public has come to expect with our history of free music on the radio. Why should free, ad supported radio music be curtailed because technology has changed and the delivery method is different?
The following can be attributed to CCIA Vice President Matt Schruers:
“The current system we have to set royalty rates is the result of piecemeal legislation that favors some digital radio providers over others. Language in the Copyright Act actually directs those setting royalty rates to “minimize any disruptive impact” on current industries – or in other words – support incumbents and discourage competition from new players.
“This legislation would update the law to no longer discourage competition since technology has enabled different distribution methods for radio offerings. As Congress has recognized in the past, the best course is a technology neutral standard that would boost innovation as well as the ability for music fans to connect with their favorite artists.”
09/21/2012 – The following statement is attributable to Michael Petricone, senior vice president of government and regulatory affairs, Consumer Electronics Association (CEA)®, following today’s introduction of the Internet Radio Fairness Act from Representatives Jason Chaffetz (R-Utah), Darrell Issa (R-Cal.) and Jared Polis (D-Colo.) and Senator Ron Wyden (D-Ore.):
“CEA applauds Reps. Chaffetz, Issa and Polis and Sen. Wyden for introducing the Internet Radio Fairness Act, a common sense bill that would extend to webcasters the same standard for determining copyright royalty rates used by all other forms of non-broadcast radio.
“Under today’s outdated rules, Internet radio providers are forced to pay a significantly larger percentage of royalties than their competitors. In some cases, Internet radio providers pay half of their annual revenues in performance royalties, while other music providers pay less than 10 percent. This irrational and unfair royalty system hinders investment and innovation in Internet radio.
“The changes proposed by the Internet Radio Fairness Act are simple and long overdue. They will drive innovation, investment and jobs, not just in Internet radio but also in the hardware used to access Internet services. They will benefit consumers by enabling exciting new digital music services and technologies. Finally, they will benefit artists by creating a vibrant online music ecosystem that compensates artists and performers.
“We urge the House and Senate to pass the Internet Radio Fairness Act as quickly as possible.”
November 13, 2012
Dear Senators & Congressmen:
On behalf of Americans for Tax Reform, I write to you regarding The Internet Radio Fairness Act. This legislation would replace one compulsory model for government price setting of copyrighted material with another. While the current so-called “willing buyer willing seller” model may attempt to mimic a free market negotiation by looking at free market deals as a benchmark, the standard in IRFA moves in an even worse direction towards forced below- market rates. Both the existing and proposed models pick winners and losers, rather than allowing free market negotiations.
The entire existing price-controlled arrangement is unfortunate and unnecessary. Instead, all parties, e.g, writers, artists, recording companies, broadcasting companies and others, should be allowed to negotiate mutually agreeable terms. There is no way, ultimately, for a legislator to decide what the fair market value of a product or service is. That is what the market is for.
We should move toward a market where setting prices, forbidding actions on one side or the other, preventing the acceptance of payment for one service or another, or prohibiting collection of compensation for the use of property are things of the past.
We believe strongly both in an open and free market, and the vigilant protection of property rights. I strongly urge you to move toward a market solution. When the government sets the rate for music, it is enacting price controls, in opposition to what should be the agenda of a Congress that supports the market economy. Rates should be allowed to emerge according to supply and demand. Government should extract itself from this debate to allow an environment for negotiations to develop among broadcasters, record companies, artists, and other interested parties.
The debate on performance rights is an interesting and important one. Ultimately, it should be made in the marketplace, not in House and Senate office buildings. I urge you to enact reforms that protect intellectual property, nurture the private sector and allow the free market to determine prices and compensation for labor and intellectual property.
At its core, this bill is an attempt by Pandora and other webcasters to reduce the royalty fees that you are paid for their use of your sound recordings on digital radio. Right now, the law requires the webcasting rates to be set under a “willing buyer, willing seller” standard – that is, the fair market value of your recording. Pandora, however, wants the law to be changed so that the rate could be set at less than fair market value, potentially much less. We believe in digital radio and its future, but we do not believe there is any reason that webcasters and broadcasters should pay less than fair market value when the music that we all enjoy, your creative contributions, are the main content of a digital radio service.
(Learn more: http://www.soundexchange.com/2012/09/28/internet-radio-fairness-act-not-so-fair/)
We need you to write Congress now and tell them to SAY NO TO SLASHING MUSIC CREATORS’ PAY.
The truth is that Pandora’s dishonest proposal would be devastating to music creators. And, while Pandora’s misleading campaign claims that Pandora is suffering under the current, fair system of compensation, nothing could be further from the truth. Pandora is expected to clear $600 million in revenues next year under the current system, and has seen year to year revenue growth that would be the envy of many businesses and families in this time of slow economic growth.