Sound Recording Performance Royalty Proposed

House democrat Rep. Mel Watt (North Carolina) announced a plan to reintroduce legislation requiring radio stations to pay performance royalties for sound recordings (not just for compositions).  The last time the issue was proposed, in February 2009 (H.R. 848, the Performance Rights Act), the bill failed to pass the House.  The National Association of Broadcasters issued a statement strongly opposing a "new performance tax."

Congress To Review Copyright Law

The Chairman of the House Judiciary Committee, Bob Goodlatte (R-Va.), announced that the committee "will conduct a comprehensive review of U.S. copyright law over the coming months."  Continuing, the Chairman stated: "The goal of these hearings will be to determine whether the laws are still working in the digital age."  Press release here.

Radio Royalties in the Future?

House Subcommittee Approves Performance Rigths Bill:
The Performance Rights Act, bill HR 4789, would remove a historical exemption that allows over-the-air radio stations to avoid paying royalties to record labels and artists for performances of sound recordings

RIAA Lobbying

"The recording industry's trade group spent nearly $2.8 million pumping up the volume on its lobbying on Capitol Hill last year". (Billboard)

Public performance in S R?

Copyright Office supports public performance rights in sound recording. What would this mean for broadcasters who are currently exempt?

New congressional bills introduced on Dec 18 2007. Key provisions proposed:

Expand 114 to broadcasting. Reach all transmissions in all formats. Possible carve out for small broadcasters with a $5000 cap annual fee. Similar for non commercial broadcasters with $ 1000 annual fee cap.

Exempt religious use and background use.

Explicitly say no effect on publishers rights.

Why are these important? Parity for platforms and among copyright owners.

Why oppose? Promotional value of broadcasting. But that weakened by internet broadcasts. FCC? Public interest obligations.

Section 115

General Counsel from Copyright Office.

Amend it? " Most important musical issue for digital music distribution".

Another look at it. Look at business models of digital music distribution. Limited download v interactive streams. All implicate copies. Is that delivery as defined in scope of license? Server copies. Steaming copies.

Important because royalty judges are hearing on new rates. Novel question of law is whether interactive streaming a digital phono record delivery? No. on demand digital transmission : should they be eligible for royalty rate?

Everything depends on definition of digital phono record delivery.

Notice of proposed rule making forthcoming.

'Monetizing the Anarchy'

The "idea is to collect a fee from internet service providers -- something like $5 per user per month -- and put it into a pool that would be used to compensate songwriters, performers, publishers and music labels".

In the end, won't such a surcharge ultimately be passed onto the end-user, i.e., all internet users are paying a $5/mo. fee to the record industry?