House subcommittee votes up performance rights bill

In an unsurprising move but during a surprisingly short markup session this morning, the House Subcommittee on the Internet and Intellectual Property voted to recommend the Performance Rights Act to the floor of the House.

That act, if approved, would lift the long-standing exemption on terrestrial radio stations -- the kind you grew up with, that use transmitters and airwaves as opposed to the Internet -- to pay royalties annually to performance rights organizations, with some of the proceeds going to performing artists and musicians whose music the stations play. Stations already pay annual royalties to copyright holders; and Internet-based and satellite radio services currently pay annual royalties to both groups.

A Subcommittee debate on the matter two weeks ago turned out to be not much of a debate at all, at least not among members who largely supported the measure, while grilling two members of the radio industry for representing literally eight decades of royalties exemption.

As HR 4789 is written now, and as it appears the Subcommittee approved with little, if any, change, the amount of royalties that larger terrestrial radio stations would pay, is left to existing law. This way, the same percentage of revenue formula that applies to Internet and satellite today -- and which may change if other new legislation is passed -- will apply evenly to larger radio stations. The bill would spell out exceptions for smaller stations, such as public and educational broadcasters, and stations earning less than $1.25 million annually in revenue.

In a statement issued this morning, subcommittee member Rep. Marsha Blackburn (R - Tenn.) applauded the bill's passage from markup, stating it "would end decades of unfair treatment for recording artists and musicians, and provide for a performance royalty on par with the developed world."

But as the National Association of Broadcasters has wasted no opportunity reminding us in recent days, it has helped gather a coalition of 219 House members -- slightly more than half -- who are active opponents of the Performance Rights Act, and have signed onto a House resolution that would declare over-the-air stations free from royalties, fees, or as the NAB likes to call them, "taxes."

In a statement this morning, NAB Executive Vice President Dennis Wharton acknowledged, "Today's vote comes as a complete non-surprise, given the House IP Subcommittee's history of support for the RIAA-backed tax on local radio stations. Despite today's action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on America's hometown radio stations should be used to bail out the failing business model of foreign-owned record labels."

That coalition could defeat the bill in the House; although in the Senate, the alternate version of the anti-royalties resolution has only garnered support from 13 senators, who would actively oppose the Senate's alternate version of the Performance Rights Act. So it remains a stalemate on both fronts this morning.