Chaffetz royalty bill kicking off an extended process


US CongressThe chances of enacting the Internet Radio Fairness Act proposed by Jason Chaffetz (R-UT) by year’s end are minimal at best. Incoming House Judiciary Chair Bob Goodlatte (R-VA) said a hearing on it would be the first of many on the topic in general – and that spells spillover into 2013. And AM-FM performance royalties will definitely be noisy part of the proceedings to come.

The Chaffetz bill seeks to bring rates paid by internet audio services into parity with rates paid by satellite and cable services, a move that would also benefit broadcasters who stream music on the internet. In support of his bill, Chaffetz enumerate the many companies that have exited the business because the royalty structure made it impossible to make the numbers work.

Goodlatte, who is currently the chair of the Subcommittee and will move up to the full committee chair in place of Lamar Smith (R-TX) said he was open to such legislation, but signaled that today’s hearing was just the beginning of a series of hearings on the topic.

Subcommittee Ranking Member Melvin Watt (D-NC) said that the focus us IRFA is simply too narrow, and set his sights squarely on terrestrial radio. He said the lack of a performance royalty for broadcast outlets was the primary area in need of change. His comments were echoed by full committee Ranking Member John Conyers (D-MI), sponsor of the ill-fated Performance Royalty Act.

Witnesses said that the rates paid by services such as Pandora were ridiculously high or woefully low, depending on which side of the debate they were on.

The too high witnesses included Pandora’s Joseph J. Kennedy, Hubbard Broadcasting’s Bruce Reese, and venture capital firm Venrock’s David Pakman.

Taking the too low position were The Recording Academy Chair Emeritus Jimmy Jam, Navigant Economics principal Jeffrey A. Eisenach and SoundExchange’s Michael Huppe.