Bill Would Fill the Gap in Copyright Protections for Music on AMFM Radio

On January 31, Sen. Marsha Blackburn filed the American Music Fairness Act. If it were to become law, the bill would secure full public performance rights in copyright owners' music sound recordings. The bill is backed by a bipartisan group of co-sponsors, including Senators Alex Padilla, Thom Tillis, and Corey Booker. An announcement for the bill states that Rep. Darrell Issa will be introducing companion legislation in the House. In the 119th Congress, both chambers should give the American Music Fairness Act the timely consideration it deserves. 

Copyright law contains a gap in its protection of the property rights of sound recording owners. Currently, terrestrial commercial AM/FM radio stations are allowed to broadcast copyrighted music sound recordings to attract listening audiences and earn money from airing ads around those recorded songs – all without obtaining a license or compensating the recordings' owners. 

 

The American Music Fairness Act would fix the issue. Under the Act, AM/FM stations would be required to pay royalties to owners of sound recordings – just like satellite radio and Internet radio stations pay public performance royalties to sound recording owners. 

 

Importantly, the American Music Fairness Act would set low, set flat royalty rates for smaller stations. For instance, the bill would establish a rate of $10 per year for non-profit and commercial stations that generate less than $100,000 in revenue each year. An annual rate of $500 would apply to stations that generate revenues over $100,000 but less than $1.5 million each year. 

 

Another merit of the Act is that it would enable sound recording owners to receive public performance royalties from foreign radio stations. The U.S.’s lack of full public performance rights has enabled foreign stations to lawfully withhold royalties from American copyright owners. But if the Act becomes law, foreign trade agreement provisions would kick in and compel those stations to finally pay American sound recording owners for the use of their copyrighted property. 

 

Previously, the American Music Fairness Act has been falsely attacked as a tax bill. In reality, the Act is a pro-property rights bill. No intellectually honest person can claim one private party's obligation to pay another private party for the use of private property is a government tax. Copyright royalties are not taxes. (The obvious differences between payments for the right to make copies, publicly display, or publicly perform another's copyrighted property and payments of taxes or fees to the government are addressed in more detail in my blog post from September 2022.) 

 

The American Music Fairness Act was introduced in both the House and Senate in prior Congresses, and the House Judiciary Committee passed it in December 2022. Sen. Blackburn and her colleagues deserve thanks for reintroducing the American Music Fairness Act in the 119th Congress and giving sound recording owners another chance at being fully secured in their rights. Hopefully, the Senate will take up the bill for due deliberation.

 

Additional background on the American Music Fairness Act can be found in my 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings," as well as in my April 2021 Perspectives, "Congress Should Secure Full Copyright Protections for Music Sound Recordings."

Senate Bill Would Ensure Royalties for Radio Play of Copyrighted Sound Recordings

On September 22, Senators Alex Padilla and Marsha Blackburn announced the introduction in the Senate of the American Music Fairness Act – S.4932. If it becomes law, the bill would secure full public performance rights for owners of copyrighted music sound recordings. In particular, the bill would secure the right of sound recording owners to receive royalties when their music is broadcast by terrestrial AM/FM radio stations. Current copyright law specially exempts AM/FM radio stations from having to pay such royalties, thereby giving those stations free rider use of copyrighted sound recordings for commercial purposes. That exemption should be removed from copyright law.  

S.4932 is identical to H.R. 4130. The latter bill received a hearing in the House Judiciary Committee on February 2 of this year. The House Judiciary hearing on the bill was the subject of my February 24, 2022, Perspectives from FSF Scholars,"American Music Fairness Act Would Secure Copyrights in Sound Recordings." Additional reasons for supporting the legislation were offered in Free State Foundation Legal Fellow Andrew Magloughlin's March 2022 blog post, "Broadcasters' FCC Filing Undermines Radio Copyright Exemption." And the American Music Fairness Act was one of the many interesting issues discussed during FSF's July 2022 webinar, "Hot Topics in Copyright Policy."

 

Notably, the American Music Fairness Act provides for significantly reduced royalty payment rates for non-profit and small commercial AM/FM radio stations. And don't for a minute confuse royalties with taxes. Royalties are payments owed to private parties for usage of their property rights. For more on royalties versus taxes, see my blog post from September 6 of this year, "In Debate Over Radio Royalties, Congress Should Favor Property Rights."

 

Hopefully, the 117th Congress will dedicate time in its remaining schedule to pass the American Music Fairness Act into law. By doing so, Congress will accord owners of copyrighted music sound recordings what is rightfully due to them when their music is played by commercial AM/FM radio stations.