Radio Royalty Impasse Continues at House Judiciary Hearing

The century-long congressional impasse on radio performance rights didn’t appear close to changing at a House Judiciary Intellectual Property Subcommittee hearing Wednesday on the proposed American Music Fairness Act. “We are here once again to ask why it is the U.S. joins the likes of North Korea, Iran and Cuba in not recognizing public performance right in radio music broadcast,” said Subcommittee Chair Rep. Darrell Issa, R-Calif. “We need to guard against unintended outcomes,” said Rep. Zoe Lofgren, D-Calif. “What impact would this legislation have on the critical role of radio stations in providing emergency broadcasts?”

House Judiciary Chair Jim Jordan, R-Ohio, said negotiations stalled last year but that he believes a fair deal can be struck. Lawmakers want to balance the interests of the radio industry and the performers, said Rep. Nathaniel Moran, R-Texas. But NAB President Curtis LeGeyt said the AMFA would impose “a financially untenable” new royalty on radio stations and “upend” laws that the industry is built on. He reiterated NAB’s position from previous iterations of the AMFA debate that instead of imposing a royalty for performers, Congress should holistically reexamine the music copyright regime.

Sound Exchange President Michael Huppe said the current policy deprives U.S. artists of nearly $300 million a year in performance royalties in other countries. A U.S. listener playing a Randy Travis song -- Travis was a witness at the hearing -- could decide if Travis received royalties based on what button was pressed on a car’s dashboard, Huppe said. The same song played in the same car on SiriusXM or Pandora would result in royalties for Travis, while a radio play wouldn't, Huppe said.

Travis, who suffers from aphasia after a series of medical events including a stroke, didn’t speak, but his wife Mary represented him. She said that because Travis can no longer sing, the two are largely dependent on royalties from his recordings. She also said less widely known artists need royalties even more. At one point, Issa stopped the hearing to play one of Randy Travis’ songs on his phone.

For broadcasters generating less than $1.5 million in revenue a year, the AMFA would impose a royalty of only $500 annually, while larger broadcasters would pay at a rate the Copyright Royalty Board would determine. LeGeyt said that policy would leave more than 4,000 stations subject to CRB rates. With radio facing increasing competition and no revenue growth, additional costs would affect station community outreach and charity efforts, Eddie Harrell, a regional vice president-general manager for Radio One, said. Rep. Thomas Massie, R-Ky., suggested the free market should decide rates and the CRB should be removed from the process. “This is why we always have at least one libertarian on the committee,” Issa said.