PRA naysayer poised for top spot in House Judiciary


During a March 2009 hearing on the Performance Rights Act, House Judiciary Ranking Member Lamar Smith (R-TX) urged further study on the matter during his opening remarks, and when push came to shove at a mark-up over a year later, was one of nine votes against the measure, which nevertheless passed easily with 21 yea votes.

The Republican Party regularly shuffles the deck when it comes to committee leadership positions, so there is no guarantee that the Republican ascension to House majority status will leave Smith in the Judiciary chair.

However, as current Ranking Member Smith would appear to have the inside track, and is almost certain to be a senior member of the committee whether or not he’s in the top slot.

Smith is not one of the Republicans who are co-sponsors of the bill, nor is he one of the 260 or so who signed the Local Radio Freedom Act opposing it.

In remarks at a 6/4/09 hearing, Smith said that the two industries need each other, and opined that “…they are likely to need each other for some time to come.” He suggested a third party study before taking any action. A subsequent study from the GAO yielded inconclusive results.

Smith joined seven other Republicans in voting against the bill in markup 6/23/10. The only Democrat to join them was Maxine Waters (D-CA). 21 committee members supported the bill.

Here are Smith’s opening remarks delivered at the 3/10/09 hearing:

Mr. SMITH. Thank you, Mr. Chairman.

The purpose of copyright law is to promote the public interest by encouraging the creation of new works of authorship. To accomplish this, the law seeks to balance the interest of creators in receiving compensation for their work with a public benefit that is derived from encouraging greater access to such works.

The fundamental question presented by H.R. 848, the Performance Rights Act, is to what extent the copyright law should give rise to a royalty payment each time a sound recording is performed publicly. Requiring a full statutory performance right for sound recordings is a change that has been sought by performing artists in the record industry for years.

H.R. 848 amends Section 106 and 114 of the copyright act to eliminate the exemption that AM and FM radio stations have enjoyed since the development of broadcast radio. The exemption permits these stations to broadcast sound recordings to the public without having to compensate performing artists. Proponents of current law assert that performing artists, particularly those with an active recording contract, benefit financially from having their songs performed extensively over free radio. They have asked why, if radio does not promote music sales, do artists and record labels send free CDs to radio stations and encourage programming managers to have their tracks spun as often as possible.

On the other hand, copyright owners note they should be entitled to exercise their rights to license the use and distribution of their works. They assert that when the law restricts them from doing so, they should at the very least be compensated for the commercial use of such works.

The economic downturn has resulted in a double hit for radio stations. It affects the ability of radio stations to generate revenue through advertising sales, which have decreased over 20 percent in the last 2 years. It also affects their ability to raise capital and secure financing to continue operations.

While the economic future of radio stations, recording artists and record labels is uncertain, my own view is that they are likely to need each other for some time to come. The sooner the parties recognize and accept this fact, the better for all concerned. Frankly, though, negotiation on the subject of performance rates is unlikely in the near future. So in the short term, what I propose is that the parties agree to have a third party entity conduct an objective study of the economic impact of royalty payments on performing artists and radio stations.

Stakeholders would offer issues to be evaluated, and at least there will be some quantitative analysis to help mold legislation.

Such a study would need to be conducted by a party that is clearly not aligned with either side of the debate. This entity would evaluate the likely impact of a range of royalty rates in a variety of economic circumstances.
During my time for questions, I will ask our witnesses if they will agree to this proposal. Before Congress chooses to act or withhold action on any matter, we have an obligation to ensure all legitimate concerns are fairly reviewed and addressed.

Mr. Chairman, thank you for having this hearing today. And I’ll yield back the balance of my time.

RBR-TVBR observation: This is one of the many broadcast issues for which Congressional party lines are blurred – but not all that blurred. Five Republicans supported PRA during the June vote, while eight were against. Only one Democrat voted against. And for sure, the loudest voice supporting PRA, outgoing Chair John Conyers (D-MI) will be muted going forward.