WASHINGTON – Tuesday's Senate Judiciary Committee hearing was more jovial than the body's typical session,but members of the radio broadcasting industry heard little to lighten their hearts as the committee pushed forward with the Performance Rights Act.
In between dismay that Senate Judiciary Committee Chairman Patrick Leahy,D-Vt.,was not there to see singer Julie London testify on the issue in 1975 and cracks about the radio career of Sen. Al Franken,D-Minn.,most senators on the panel expressed strong support for the proposed law. For the first time,it would require radio stations to pay performers to play their songs on the airwaves.
The legislation has bipartisan backing in both houses of Congress,with four Democratic and three Republican co-sponsors in the Senate.
“There is going to be legislation,” Leahy said. “It will move.”
Sen. Dianne Feinstein,D-Calif.,a co-sponsor along with Leahy,was no less equivocal.
“The United States is the only industrialized nation that does not provide performers a full performance right,” Feinstein said.
Radio stations currently pay royalties to songwriters but not to performers. Other media,including satellite radio and Internet webcasters,pay both groups for the right to play their music.
A broadcasting representative argued that the industry already provides value to performers,in the form of free publicity,for playing their music and that record labels encourage the practice.
“Economist James Dertouzos determined that radio airplay was directly responsible for up to $2.4 billion a year in music sales,” said Steve Newberry,the president of Kentucky's Commonwealth Broadcasting Corp. and chairman of the National Association of Broadcasters. “Additionally,every day,radio stations are flooded with calls,e-mails,texts and visits from record label promoters trying to get a song on the radio.”
Newberry said that one Salt Lake City radio station reported 10,352 such contacts – 9,597 e-mails and 755 calls – from record labels from August 2008 to July 2009.
However,most of the witnesses joined the senators in disagreeing that the practice provides appropriate compensation.
Ralph Oman,a professor of patent law at George Washington University and the former United States Register of Copyrights,said that the current arrangement enjoyed by radio stations has little basis in United States law or that of any other country.
“Nowhere else in copyright law – and nowhere in American jurisprudence generally – can one business take another's private property without permission or payment because the user concludes unilaterally that long term it would be good for the property owner's business,” Oman said. “We have no legal or economic justification for this anomaly in our law.”
Broadcasters are concerned that royalty fees on top of a difficult economy would drive many small stations out of business.
“I can honestly tell you that I have never seen the economic pain the radio industry is currently experiencing,” Newberry said. “And as challenging as radio's current economic landscape is,it will deteriorate even further if a performance fee were to be enacted.”
To protect smaller stations,the House Judiciary Committee based the royalty fee on stations' revenue. Under the House bill,stations with less than $100,000 in yearly revenue,would pay a $500 fee. That fee would escalate to $5,000 for stations that take in between $500,000 and $1.25 million annually. Above that,stations would negotiate rates with performers.
Most of the senators who attended the hearing sounded open to including that provision in their bill.
In the face of strong support for the performance rights measure,Feinstein mused that broadcasters may be forced to go the way of car manufacturers and health insurers,who this year have gone along with new regulations in return for a seat at the negotiating table as those rules were crafted.
“I think we will have a bill,” Feinstein said. “So the degree to which you can sit down and solve the problem yourselves will be good.”