Thursday, November 21, 2019

Congress Should Take Up the AM-FM Act to Better Protect Music Copyrights

The owners of copyrighted music should be protected in their rights. But a glaring void in the law allows AM and FM radio stations to play copyrighted sound recordings without obtaining permission or paying the owners. Legislation introduced in Congress on November 21 called the "Ask Musicians for Music Act" (AM-FM Act) would, if passed, fill that void and secure to sound recording owners the legal protections they deserve. 

The U.S. Constitution's Copyright Clause gives Congress the responsibility to secure exclusive rights in the creative works of musical and other artists. Yet existing law gives terrestrial AM and FM radio broadcasters an unfair privilege by allowing them to retransmit copyrighted sound recordings without having to pay any royalties to the owners of those recordings. No matter how many stations play their music, no matter how many plays their music receives, and no matter how much money those stations make, sound recording owners receive no royalties from AM and FM broadcasters.

According to the FCC's Communications Marketplace Report (2018), total broadcast radio revenue exceeded $16.5 billion in 2016. (This figure excludes digital/online revenue received by broadcast stations.) SoundExchange has estimated that American copyright owners of sound recordings are denied about $200 million in annual royalties that would have been paid to them for radio broadcasts in other nations. The law also confers an unfair advantage on terrestrial AM/FM broadcasters, since competing satellite radio broadcasters and non-interactive online services (or webcasters) do have to pay royalties for transmissions of copyright sound recordings. 

Congress should better secure copyright protections in sound recordings. Promising legislation introduced soon in the Senate by Senator Marsha Blackburn and in the House by Representative Jerry Nadler would serve that constitutional purpose. 

The AM-FM Act would amend the Copyright Act by requiring AM and FM stations to get the consent of copyright owners before broadcasting their sound recordings. In other words, the AMFM Act would finally give sound recording owners the say over whether their own sound recordings may be used by terrestrial radio broadcasters. And it would allow them to seek payment for such usage. Also, creative artists and other sound recording owners who prefer letting stations to play their music over the air for free may let them to do so. 

Additionally, the AM-FM Act would protect small broadcasters as well as public and education stations by capping the compensation that sound recording owners may annually receive from those stations. The focus of the AM-FM Act is on large commercial broadcasters.

Interestingly, many broadcasters have called for reforms that would better respect their own copyrights by allowing them to negotiate with cable operators over retransmission rights for broadcast TV programming. Existing law provides cable operators a compulsory license to retransmit to their subscribers copyrighted broadcast TV programming by paying royalties to the programming owners at government-prescribed rates. Broadcasters have claimed that the compulsory license unfairly restricts their exclusive rights in their TV programming and that it results in royalty payments below what they could negotiate in a free market setting. So, it's a bit odd – indeed, inconsistent – for broadcasters to steadfastly oppose payments for radio broadcasts of copyrighted sound recordings. 

The AM-FM Act constitutes an important step in respecting exclusive rights in creative works in all circumstances, regardless of medium or commercial industries involved. By passing the AM-FM Act, Congress can better secure copyrights in sound recordings and meet its obligation under the Constitution's Copyright Clause. 

California's Privacy Law: Recent Developments Underscore the Need for Preemptive Federal Law

In an October 2019 Perspectives, I argue that the California Consumer Privacy Act of 2018 (the "CCPA") violates sound principles of online consumer privacy regulation and threatens to reduce consumer welfare – and not just within that state's borders. Given the size of California's economy and the prominent role it plays in the tech and information services sectors, the harmful impact of the CCPA could be felt across the country, if not the world. It is therefore incumbent upon Congress to adopt a federal privacy law that preempts California's attempt to establish de facto rules of the road for the nationwide digital services marketplace.
A recent announcement by a major technology company highlights my concerns.
In a blog post on November 11, 2019, Julie Brill, Microsoft's Corporate Vice President for Global Privacy and Regulatory Affairs and Chief Privacy Officer, announced that it "will extend CCPA’s core rights for people to control their data to all our customers in the U.S." Other companies undoubtedly will follow suit, for a number of reasons.

First, it may be more cost efficient to establish and maintain a single, national compliance program than one for the state of California and another for the rest of the country.
Second, consumers reasonably expect that a single set of online protections will apply regardless of where they, or the company with which they are transacting, happen to be.
Third, online traffic flows inherently are interstate in nature. By design, the route that an Internet Protocol data packet travels is influenced by real-time network congestion levels. Even between the same two end points, that path – and the state(s) that it passes through – can vary from one moment to the next. To the extent that targeted compliance requires the accurate identification of a consumer's location, companies may choose to apply the CCPA nationwide rather than risk a violation solely due to technical error.
A new federal privacy law could sidestep these issues – but only if it preempts state action. Not all lawmakers agree, however. In fact, two Democratic members of the House introduced legislation on November 5, 2019 that would make the situation far worse.
The Online Privacy Act, drafted by Silicon Valley Representatives Zoe Lofgren and Anna Eshoo, proposes its own highly proscriptive set of privacy rules. Among other things, it would: create consumer rights that are similar, but not identical, to those found in the CCPA; require companies to obtain explicit consent (i.e., "opt-in") before disclosing or selling personal information; prohibit the use of web traffic information as the basis for ads; create a new federal bureaucracy – the 1,600-employee-strong Digital Privacy Agency – rather than leverage the experience and expertise of the Federal Trade Commission; and establish a private right of action for individuals.
The most significant problem with the Online Privacy Act, however, is that it would impose requirements at the federal level – but would fail to preempt state lawsDe facto regulation of the nationwide digital services marketplace pursuant to the California model would be bad. The "patchwork" that could result if other states enact their own laws would be worse. Worst of all, however, would be an additional layer of burdensome federal regulation on top of (likely inconsistent, and certainly problematic) state law(s).
The effective date of the CCPA is right around the corner. Absent congressional action, on January 1, 2020, California's ill-conceived approach as a practical matter may become the privacy law of the land. Those members of Congress who recognize the need for a coherent, nationwide approach to online privacy oversight should act promptly to preempt not just this inconsistent state law, but also rival proposals at the federal level that threaten to exacerbate the situation.

Wednesday, November 20, 2019

Chairman Pai's Announcement Regarding the 5.9 GHz Band

The following statement may be attributed to Free State Foundation Visiting Fellow Greg Vogt:

Chairman Pai's announcement today that he would ask the Commission to launch a reorganization of the 5.9 GHz band to accommodate unlicensed and automotive safety use is good news. Because this 75 MHz of mid-band spectrum has remained almost fallow for twenty years, a modernized and more flexible use band which provides more spectrum for Wi-Fi and other unlicensed applications will better serve the future of American's communications needs.

Tuesday, November 12, 2019

Supreme Court Hears Arguments in State Copyright Infringements Case

On November 5, the U.S. Supreme Court heard oral arguments in the copyright case of Allen v. CooperAt issue in the case is whether state are sovereignly immune from copyright infringement claims or whether states' immunity was abrogated by the Copyright Remedy Clarification Act of 1990 (CRCA). According to a recap of the oral arguments posted at SCOTUSblog, some of the Justices pushed back against the idea that states could become copyright owners and yet also infringe others' copyrights with impunity. Among the observations reportedly made by the Justices during oral arguments was the idea that state infringements of copyrights is contrary to the Constitution's purpose in empowering Congress to secure exclusive rights in creative works to authors. Those are sound observations, and hopefully the Justices will follow through with a just decision that recognizes the legal rights of copyright owners against infringements by states, state institutions, and state officials. The Supreme Court will reach a decision in Allen by the end of the current term in June 2020.

Allen v. Cooper is the subject of my Perspectives from FSF Scholars paper published on October 16, "States Have No Right to Infringe Copyrights." That paper provides an overview of the case and takes a closer look at the nature of copyrights through the lens of the 14th Amendment's Privileges or Immunities Clause. Additionally, the Federalist Society produced an insightful podcast discussing Allen and the underlying issues involved. Also, Law Professor Adam Mossoff published an excellent op-ed on the case in the Wall Street Journal that is available online.

Friday, November 08, 2019

A Reasonable Revision to the Lifeline Postponement Request

Back in June 2019, I posted a blog, "A Reasonable Lifeline Postponement Request," supporting a petition filed by CTIA and some public interest organizations asking the FCC to postpone an impending FCC deadline that, if implemented, may have adversely impacted Lifeline customers by constraining the flexibility of service providers to tailor offerings in an affordable way to meet Lifeline customers' demands. 

Specifically, the petition asks the Commission to stay implementation of the December 1, 2019 (1) increase in the minimum required broadband data usage allowance from 2 GB to 8.75 GB, and (2) the phase-down in support for voice services in the Lifeline program. The petition asks for the postponement until the Commission can consider the Wireline Competition Bureau’s State of the Lifeline Marketplace Report, due to be completed by June 30, 20121.

Now, TracFone, a major provider of Lifeline services, has proposed that the Commission increase the minimum service standard for mobile wireless data to 3 GB per month until the Commission has an opportunity to evaluate the appropriate level of the minimum service standard in the State of the Lifeline Marketplace Report, which it suggests the FCC place on an accelerated timeline for completion.

On November 5, CTIA filed an ex parte letter with the Commission endorsing TracFone's compromise proposal as "a rational means for the Commission to continue to increase the minimum service standards while taking care to avoid unintended consequences for millions of Lifeline eligible low-income consumers."

I agree. The FCC is right to continue its focus on ensuring that the Lifeline program is run as efficiently as possible and as free from abuse and waste as possible. At the same time, the program serves as a "safety net" for low income consumers, and the Commission should take care that any proposed changes in minimum service standards don't reduce the effectiveness of the program for its intended beneficiaries.

Wednesday, November 06, 2019

FCC Releases T-Mobile/Sprint Order

On November 5, the FCC released its order approving the T-Mobile/Sprint merger. The result is consistent with comments and reply comments filed by the Free State Foundation in the proceeding. Also, on October 8, FSF President Randolph May and I filed comments pursuant to the Tunney Act regarding the U.S. Department of Justice's proposed settlement with T-Mobile and Sprint.

Tuesday, November 05, 2019

The Case for Federal Preemption of California's Misguided Privacy Law

On October 28, the Free State Foundation published "California's Heavy-Handed Approach to Protecting Consumer Privacy: Exhibit A in the Case for Federal Preemption," a Perspectives from FSF Scholars paper by Adjunct Senior Fellow Andrew Long. His paper examines many troublesome aspects of that state's broad and onerous privacy law. And it emphasizes the importance of Congress passing a preemptive new data privacy law as well as the Federal Trade Commission taking action to secure a consistent federal standard for data privacy protection that is based on sound principles and provides for flexibile case-by-case enforcement. 

Mr. Long's Perspectives paper is worth a close reading. Its publication comes close on the heels of the release of the edited transcript of FSF's Seminar "Privacy Regulation: Why, What and When?"

Friday, November 01, 2019

Save the Date! FSF's Twelfth Annual Telecom Policy Conference

The Free State Foundation will hold its Twelfth Annual Telecom Policy Conference on Tuesday, March 10, 2020, 8:30 AM to 2:45 PM at the National Press Club in Washington, DC. This annual conference is widely acknowledged to be one of the nation's premier communications law and policy events.

As always, a truly outstanding lineup of senior officials and prominent experts from Congress, the FCC, other government agencies, industry, academia, and think tanks will discuss and debate the most important communications and Internet policy issues of the day.

Mark your calendars now for March 10, 2020!