Lawmakers unveil music royalty bill

Lawmakers on Monday unveiled legislation aimed at forcing broadcasters, satellite radio companies and Internet streaming services to pay the same royalties to musicians. 

Reps. Jerrold Nadler (D-N.Y.) and Marsha Blackburn (R-Tenn.) announced the legislation flanked by Elvis Costello, Cyndi Lauper and dozens of other musicians in New York. 

The Fair Play Fair Pay Act would create a new performance rights for AM and FM stations, which can currently play music without having to pay royalties to musicians and labels. 

It would also require satellite radio companies to pay royalties at market rates, rather than what Nadler calls an “illogical, grandfathered royalty standard” created decades ago. 

“The current system is antiquated and broken. It pits technologies against each other and allows certain services to get away with paying little or even nothing to artists,” Nadler said.

The current system “shortchanges artists and hamstrings Internet radio companies like Pandora who must compete against a rival paying subsidized rates,” Nadler said. 

The bill has a carve-out for college radio stations and other stations making revenues of less than $1 million a year. Those stations would pay a flat $500 in royalties a year, while college radio stations would pay $100. 

He said the provision was meant to prevent “large radio conglomerates” from hiding behind the potential threat to smaller stations.

The legislation would also close a loophole that allows Internet radio companies avoid paying royalties to musicians on songs that were created before 1972, an issue that is currently before the courts. 

“Now as more people realize this, they’re beginning to appreciate that it is first a principle that what you create you are paid for,” Blackburn said. 

Musicians and groups like Sound Exchange, a nonprofit that collects and distributes royalties to artists, have applauded the legislation. Nadler will be given the Grammy on the Hill award this week, along with Judiciary Committee Chairman Bob Goodlatte (R-Va.). 

But broadcasters have come out strongly against the legislation, and have highlighted the exposure that radio gives musicians.  

“It is disappointing that this bill retreads years-old policy positions rather than advancing the copyright dialogue through policies that help grow the entire music ecosystem,” the National Association of Broadcasters said last week, adding that it is willing to work on a “balanced” proposal. 

The group pointed to a broadly supported resolution in the House and Senate that declares that Congress should not add any new performance fees, taxes or royalties on local broadcast stations.