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."

Joint Resolution in Senate Would Repeal FCC's New Title II Order

On July 23, Senator Marsha Blackburn introduced S.J.Res. 103, a Congressional Review Act (CRA) joint resolution of disapproval to overturn the FCC's Safeguarding and Securing the Open Internet Order. Senators Ted Cruz and John Thune are co-sponsors. S.J.Res. 103 was referred to the Senate Commerce, Science, and Transportation Committee. By a 3-2 vote in April of this year, the Commission reclassified broadband Internet access services as "telecommunications services" under Title II of the Communications Act, subjecting advanced broadband networks to public utility regulation.

Earlier this year – as described in a May 28 blog post – Rep. Bob Latta introduced in the 118th Congress H.J.Res. 153, a similar CRA joint resolution of disapproval.

 

Under the CRA, there is a fast-track process for Congress to vote on the repeal of new agency regulations. Helpful background information on the CRA, in the context of broadband regulatory policy, is contained in FSF Board of Academic Advisors Member Daniel Lyons' June 2018 Perspectives from FSF Scholars, "The Congressional Review Act and the Toxic Politics of Net Neutrality."

 

Many Perspectives from FSF Scholars papers have been published critiquing the new Title II order's imposition of public utility restrictions on broadband Internet networks. These include my May 21 Perspectives, "The FCC's New Title II Order Allows Harmful Rate Regulation" and my April 22 Perspectives, "Public Safety Rebrand Won't Save the FCC's Internet Regulation Plan From Unlawfulness." The most serious legal defect in the Commission's new Title II order comes under fire in my April 12 Perspectives, "The FCC's Internet Regulation Plan Fails the Major Questions Doctrine." 

Senators' Court Brief Challenges FCC Authority to Subsidize School Bus Wi-Fi

On April 9, a group of seven U.S. Senators, including Sens. Ted Cruz and Marsha Blackburn, filed an amicus curiae brief with the Fifth Circuit in the case of Molak v. FCC. The case involves a legal challenge to the Commission's authority under Section 254(h)(2)(A) of the Communications Act to use E-Rate funds to subsidize Wi-Fi on school buses. The Republican Senators' position that the statute does not authorize E-Rate subsidies for school bus Wi-Fi and their primary policy objection to those subsidies are put forth succintly in the brief's summary:

The Federal Communications Commission (FCC)'s plan to subsidize Wi-Fi on school buses is unlawful and misguided. Under section 254 of the Communications Act of 1934, the FCC is authorized to use E-Rate funds only "to enhance . . . access to advanced telecommunications and information services for . . . school classrooms . . . and libraries." 47 U.S.C. § 254(h)(2)(A) (emphasis added). But rather than follow the law restricting the use of E-Rate funds to only classrooms and libraries, the FCC chose to put Wi-Fi on school buses. And this decision comes in the wake of Congress’s decision to not renew the COVID program that authorized the FCC to temporarily fund Wi-Fi off-campus during the pandemic. School buses are neither "classrooms" nor "libraries" within the meaning of Section 254, making the FCC's decision to fund Wi-Fi on school buses contrary to law. 

Moreover, the FCC's proposed expansion of funding raises concerns about child safety and a lack of accountability regarding federal spending. The FCC's E-Rate plan funnels millions of dollars to expired COVID-era policies without any evidence that unsupervised teenagers with smartphones on school buses will opt for trigonometry over TikTok. The FCC has not performed any analyses, produced any survey data, or even required an accounting to determine whether the money already spent on equipping school buses with Wi-Fi has resulted in more students completing their school assignments or otherwise served the academic purposes for which the COVID-era funding was intended. Rather than conduct a careful analysis based on public comment of the efficacy of funding school bus Wi-Fi, the FCC's E-Rate program greenlights children's unsupervised Internet access while failing to address the well-documented and corrosive effects on minors of social media, online pornography, and cyber bullying. The FCC's proposal is unsupported by evidence that the existing program works and lacks appropriate guidelines to ensure that the E-Rate funds advance the interests of children, parents, teachers, and taxpayers.

In our February 2024 Perspectives from FSF Scholars, "FCC's School Bus Wi-Fi Subsidy Lacks Statutory Support," Free State Foundation President Randolph May and I addressed legal problems with the Commission's order that is now under review in Molak v. FCC.  

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. 

Transcript Released! FSF Seminar - "Privacy Regulation: Why, What, and When?"

The Free State Foundation has released the edited transcript the expert panel discussion held at FSF's June 2019 seminar - "Privacy Regulation: Why, What, and When?" 

The panel addressed potential new privacy regulation, whether by Congress, the FTC or other federal agencies, or the states. The panel featured Kelly Cole, Senior Vice President of Government Affairs at CTIA; Lynn Follansbee, Vice President, Policy & Advocacy at USTelecom; Loretta Polk, Vice President & Deputy General Counsel at NCTA - The Internet & Television Association; and Michelle Richardson, Director of the Privacy & Data Project at the Center for Democracy and Technology (CDT). The edited panel transcript is available here at FSF's website. Video of FSF's Privacy Regulation Seminar, including keynote addresses by Sen. Marsha Blackburn and FTC Commissioner Noah Phillips, is available here.