Battle for radio royalties gains momentum

By Jeffrey Yorke

WASHINGTON (Billboard) - Chances appear slim that Congress will vote this year on legislation requiring terrestrial radio stations to pay artists and labels performance royalties to play their recordings.

Nonetheless, signs are emerging that the recording industry is making some headway in its precedent-breaking fight to extract new royalty payments from broadcasters.

A resounding voice vote June 27 by the House Subcommittee on Courts, the Internet and Intellectual Property in favor of the legislation sent the Performance Rights Act to the full House Judiciary Committee. A vote by the Senate Judiciary Committee on a similar bill is also possible. But the legislation doesn't seem poised to get much further in this election year, as Congress is scheduled to adjourn for a summer recess after the first week of August and faces a full agenda after it reconvenes following the Labor Day weekend.

The National Assn. of Broadcasters (NAB) has rallied opposition to what it derides as a performance "tax," releasing in late June a list of 219 House members (out of 435) who signed a nonbinding resolution declaring that such fees would impose "severe economic hardship" on radio stations.

Still, supporters of performance royalties can point to bipartisan backing of their own, amid signs that even some opponents of the bill are absorbing a fundamental message that the Recording Industry Association of America (RIAA) and artists' groups have been hammering home for months: that terrestrial radio broadcasters in other industrialized countries, as well as satellite and Internet radio companies in the United States, all pay performance royalties.

LEGISLATORS WEIGH IN

Intellectual property subcommittee member Rep. Howard Coble, R-N.C., said he considered the current legislation "a work in progress" and that he intends to vote against it in hopes of working with other members on amendments. But given that satellite and Internet radio companies pay performance royalties, "extending the exemption in perpetuity does not strike me as fair," Coble said.

Rep. Mike Pence, R-Ind., one of the signatories of the NAB resolution, told fellow subcommittee members that he recognized the exemption of U.S. terrestrial radio from performance royalties reflected "a lack of harmony with laws around the globe," adding that broadcasters may be at a point where they will have to compensate rights holders and artists for use of their recordings. But he also proposed that radio stations be compensated for their role in promoting music, the value of which the NAB recently pegged at $2.4 billion annually.