On June 26, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet held a Hearing titled "Radio, Music, and Copyrights: 100 Years of Inequity for Recording Artists." The hearing featured testimony from witnesses on two competing legislative measures introduced in the 118th Congress: the American Music Fairness Act of 2023 and the Supporting the Local Radio Freedom Act.
The American Music Fairness Act – H.R. 791 and S.253 – would finally recognize a public performance right in terrestrial AM/FM radio broadcasts of copyrighted music recordings. If passed into law, the Act would require for-profit AM/FM stations to pay royalties to owners of sound recordings for the use of their intellectual property just like online streaming services do. Smaller commercial AM/FM stations as well as non-profit stations that have less financial resources would qualify for a significantly reduced annual royalty payment of $500, $100, or $10.
Testimony by country music star Randy Travis and his wife Mary Travis challenge the position of many radio stations that American recording artists don't deserve a public performance right for their sound recordings for radio airplay because radio broadcasts of their music promote sales of physical CDs, merchandise, and tickets. Indeed, in the age of digital streaming services, revenues from CD sales are only a fraction of what they were many years ago, and many recording artists struggle to make a living and pay their crew and other co-workers. Commercial terrestrial AM/FM radio stations profit from playing copyrighted sound recordings. Internet streaming and satellite radio services pay public performance royalties for broadcasting copyrighted sound recordings, and it makes no sense to continue giving terrestrial AM/FM radio services.
At the hearing, SoundExchange CEO Michael Huppe testified to the important point about how the American Music Fairness Act would benefit American recording artists and copyright owners by unlocking significant royalties from foreign radio stations. As explained in my March 27 blog post, "Music Revenue Report Should Spur Congress to Secure Copyrights Fully":
Under existing international agreements, foreign terrestrial AM/FM radio stations do not have to pay royalties for playing copyrighted music owned by Americans so long as domestic terrestrial AM/FM radio stations in the U.S. have no obligation to pay such royalties. Passing the American Music Fairness Act would open up those foreign royalty streams to U.S. copyright owners. Importantly, the legislation is sensitive to the limited financial resources of smaller commercial and non-profit stations by treating them to a low, flat royalty rate.
The case for the American Music Fairness Act is presented in further detail in my February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings," and in my August 2021 Perspectives from FSF Scholars, "Congress Should Secure Full Protections for Music Sound Recordings."
Testimony from National Association of Broadcasters President and CEO Curtis LeGeyt endorsed the Supporting the Local Radio Freedom Act – H.ConRes.13 and Sen.Con.Res.5 – a resolution stating that Congress should not impose "any new performance fee, tax, royalty, or other charge" on a local radio station broadcasting sound recordings over the air. But Mr. LeGeyt's testimony, like the Supporting the Local Radio Freedom Act, wrongly lumps payment of royalties by a radio station for commercially exploiting someone else's copyrighted property in with fees and taxes paid to the government. NAB's position isn't new, and it doesn't overcome the just claims of the owners of copyrighted property. I addressed the critical distinction between royalties and taxes in my September 2022 blog post, "In Debate Over Radio Royalties, Congress Should Favor Property Rights."
The American Music Fairness Act deserves to be advanced by Congress because it is a sound policy rooted in constitutionally recognized property rights principles. The other legislative measure is not.
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