Rep working to level digital royalty playing field


U.S. CongressHouse Judiciary Committee member Rep. Jason Chaffetz (R-UT) is working on a bill that would take internet radio royalty rates down to the same level paid by satellite and cable radio outlets.

Chaffetz is a member of Judiciary’s key Subcommittee on Intellectual Property, Competition, and the Internet. He says he doubts that a bill will be ready before Congress’ annual August break begins, but that shouldn’t be a problem because if enacted, internet radio rates wouldn’t decrease in 2015 when the current deal expires.

According to a report in The Hill, Chaffetz’s effort is already getting negative attention from the music industry. On the other hand, internet radio leader Pandora is very happy about the effort.
Chaffetz told The Hill that the plethora of different rates for different digital audio platforms is “screwy,” and doesn’t make any sense.

Pandora CEO Tim Westergren believes Congress has a chance to create a fair royalty structure, bolster innovation and bring musicians to the table as “stakeholders.”

Although Chaffetz specifically mentioned FM radio in his comments, his bill appears to be directed strictly at digital venues.

The legislation may also take a crack at improving the makeup of the Copyright Royalty Board which has responsibility for determining rates. Among other things, it would require that members of the board have the proper legal background and expertise as other types of copyright judges are expected to possess.

RBR-TVBR observation: Talk about regulatory uncertainty – the workings of the current Copyright Royalty Board are mysterious and unpredictable. As we recall, one of the benefits NAB was touting when it tried to sell radio on a royalty deal with labels and musicians a couple years ago was the prospect of taking the CRB entirely out of the equation. It will be interesting to see if and how Chaffetz intends to rein the CRB in when he has the bill ready for unveiling.