Broadcaster-supported internet royalty bill introduced


U.S. CongressTraditional broadcasters and internet service Pandora are often at odds, but not when it comes to supporting the Internet Radio Fairness Act of Jason Chaffetz (R-UT). He’s signed up Jared Polis (D-CO) as a House co-sponsor, and Ron Wyden (D-OR) is set to introduce the bill in the Senate. Along with Pandora, it’s endorsed by Clear Channel and Salem Communications.

The idea of the bill is to bring royalties paid by services such as Pandora in line with those paid by satellite and cable audio services. Theoretically, that should include internet radio streams operated by broadcasters.

Pandora has endorsed the bill because it avoids the thorny issue of terrestrial radio royalties. It wants a clean vote on whether it should be at parity with other digital platforms without having the bill dragged to its doom by AM and FM broadcasters.

Musicians are adamantly opposed because it will reduce the money it gets from internet radio without adding income from some other source.

It received a ringing endorsement from the NAB, which stated, “NAB appreciates the leadership of Reps. Chaffetz and Polis and Sen. Wyden and strongly supports legislative efforts to establish fair webcast streaming rates. NAB will work with the bill’s sponsors and all interested parties to create broadcast radio streaming rates that promote new distribution platforms and new revenue streams that foster the future growth of music.”

The story about the Chaffetz bill broke in July, when it was in draft form.

Before too long, another competing bill was introduced by Jerry Nadler (D-NY) which would attempt to impose internet fees on broadcasters to make up for money not paid for broadcast airplay, until such time as a broadcast royalty is mandated. Musicians favor that bill; broadcasters oppose it.

Upon the introduction of the bill, Chaffetz said, “Internet radio should be a boon to the entire audio market – from the creators, to the distributors, and of course to the consumers – but instead it is barely hanging on. Congress enacted the royalty rate standard for Internet radio 14 years ago, when Internet radio was barely a concept. This bipartisan legislation levels the playing field for Internet radio services by putting them under the same market-based standard used to establish rates for other digital services, including cable and satellite radio. It’s well past time to stop discriminating against Internet radio.”

Added Polis, “When I was in college, making a mix tape was the height of technology but fans can now legally make their own playlists in the cloud to share and enjoy. Our laws shouldn’t penalize the innovators who made that leap and created jobs by forcing them to pay outrageous royalties that are far greater than their competitors. We should pass the Internet Radio Fairness Act now because it’s what’s right for consumers and our economy.”

In addition to Clear Channel, Salem and Pandora, supporters of the Chaffetz bill include the Webcaster Alliance, the Digital Media Association (DiMA), Engine Advocacy, the Computer and Communications Industry Association (CCIA), and the Consumer Electronics Association (CEA).

RBR-TVBR observation: We don’t see this going anywhere, at least until after the elections. According to the latest House calendar, it will be out of session during the week of 9/24-28, will return for the first week of October and then head right back home again until all votes are cast. Will this bill get a hearing during lame duck season? Who knows – what we do know is that it’s a long way from becoming the law of the land.