law

Oxenford looks at Register of Copyrights proposals for copyright reform

Tuesday, June 11, 2013 - 12:30pm

We're written several times about U.S. Register of Copyrights Maria Pallante's efforts to spur Congress to reform copyright law.

The usage, creation, and consumption of copyright material in 2013 is massively different than even 15 years ago, when the Digital Millennium Copyright Act was passed -- the last major update to copyright law. Many of the concepts created even that recently no longer fit today's reality.

Streaming radio legal and royalties expert David Oxenford summarized some of Pallante's thinking today. He wrote of Pallante aims for updated copyright laws:

"Copyright owners must have the meaningful ability to protect the content that they create. But the public must also be able to access that content in a meaningful ways. Both creators and users of content have responsibilities to participate in the larger copyright economy to make sure that it functions properly."

He cited Pallante's call for "a full performance right in sound recordings," which we wrote about here. While we wrote specifically about a potential broadcast royalty obligation for sound recordings, Oxenford points out that Pallante's assertion could potentially mean sound recording royalties for "bars, restaurants, stadiums, and all other venues where recorded music is performed." (Like broadcast radio in the U.S., today these venues pay publishers and songwriters to publicly perform copyright song compositions, but not for recordings.)

There's more, and we recommend reading Oxenford's summary of Pallante's thinking in Broadcast Law Blog here.

Pandora's Westergren: Nadler's legislation would only worsen "astonishingly unfair" royalty situation

Thursday, August 23, 2012 - 12:05pm

Nadler's oppositionNew draft legislation from U.S. Representative Jerrold Nadler (D-NY) has sparked backlash from webcasters and broadcasters alike. The bill's opponents say it discrimnates against new technology and would kill jobs.

Nadler's bill, the Interim FIRST Act, would raise streaming royalty costs for AM/FM broadcasters by imposing an extra fee (essentially adding an over-the-air performance royalty to broadcasters' streaming bills; RAIN coverage here). It would also potentially raise royalty rates for satellite and cable radio by shifting those platforms' rate determinations to the "willing buyer/willing seller" model, instead of the 801(b) standard.

"Fairness demands that all music related rate settings utilize the same 801(b) standard," argued Pandora founder Tim Westergren in a statement.

Westergren called the current royalty system "astonishingly unfair," with Internet radio paying substantially higher rates than other radio platforms. Pandora paid nearly 70% of total revenue to royalties (based on its Q1 FY 2013), compared to SiriusXM which pays about 8%.

"Congressman Nadler’s discussion draft would only perpetuate this hypocrisy and worsen an already flawed legislative mistake that is discriminating against new technology and hampering innovation."

Cathy Rought of the Free Radio Alliance (FRA) said Nadler's bill "is misguided and would cause irreversible harm to free and local radio" (more here). The FRA continues on its blog (here): "It's clear that the ultimate objective is a back door attempt at a performance tax."

NAB spokesperson Dennis Wharton agreed, saying the draft legislation "fails to recognize" radio's "unparalleled promotional value" and "would kill jobs" at radio stations.

The National Religious Broadcasters (NRB) also "strongly opposes" Nadler's legislation, writing in a statement that it "would place a new and unwarranted burden on many Christian radio broadcasters" (more here).

Westergren quoteTechDirt's Mike Masnick writes (here), "As it stands now, [royalty] rates are so damaging that Pandora -- the top player in the space -- has made it clear it may never be profitable. Yes, never. Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties."

Nadler's bill has the support of the musicFIRST Coalition, which argues it would implement a system "that treats artists and platforms fairly and equally." Nadler thinks his bill would "both level the playing field for Internet radio and ensure that artists are fairly compensated."

Pandora disagrees, instead supporting legislation from Rep. Jason Chaffetz (R-UT). Chaffetz's bill, the Internet Radio Fairness Act of 2012, would move web radio royalty rate determinations to the 801(b) standard -- the same standard currently used to set rates for radio delivered via satellite, cable and other platforms (RAIN coverage here).

"Congress should embrace the Chaffetz approach," said Westergren. The Hill has more coverage here.

Chaffetz's Internet Radio Fairness Act aims to help streaming broadcasters, not just Pandora

Friday, July 20, 2012 - 12:15pm

Broadcaster streamingYesterday we reported on in-progress legislation from Utah Republican Congressman Jason Chaffetz that would aim to change the way Internet radio royalties are determined (RAIN coverage here).

Other trade publications also covered the story, but some presented the issue as "Pandora's fight," more or less: "Pandora’s in Washington, pushing for a 'level playing field' on its biggest expense – royalties" (here) and "Congress may help Pandora cut royalties" (here), for example.

But this is (or at least should be), broadcasters' fight, too. Broadcasters -- not just Pandora and other pureplay web radio services -- could have much to gain from what Chaffetz is trying to accomplish.

The statutory performance royalty rate for broadcasters' online streams, like pureplay webcasters, is currently determined by the Copyright Royalty Board using the "willing buyer/willing seller" standard. And that arguably led to rates for broadcasters so high for the 2006-2015 period that the NAB had to cut a separate deal with SoundExchange (just like Pandora and other webcasters did, RAIN coverage here).

The lower rates reached by that separate deal are still apparently unattractive, at least for Clear Channel, which recently cut a deal with Big Machine that exchanged a share of on-air revenue for a break on web royalties (RAIN coverage here and here). The company is reportedly hoping to make other such deals, a good illustration that the largest player in radio sees a future online, but recognizes that royalty rates need to change to better realize that future.

Chaffetz's bill, the Internet Radio Fairness Act, would reportedly move streaming radio royalty determinations to the more prevalent 801(b) standard, the same standard used for satellite radio and cable radio royalty rates. You can find more on the pending bill and the 801(b) standard in our earlier coverage here.

One could also argue that somewhat lower royalty rates will most likely benefit copyright owners too, since high rates are currently inhibiting investment in and the growth of the sector. Higher listening levels to Internet radio could mean greater royalties available to composers, artists, and labels.

All that said, it's important to remember that nothing in Chaffetz's bill -- which is still unfinished -- would actually change web radio royalty rates themselves. It would only change the way in which they are determined, opening the potential for fairer rates in the future.

Additionally, though Chaffetz says he's aiming for parity between music platforms, nothing in his bill reportedly deals with a performance royalty for traditional AM/FM broadcasts.

The Utah Congressman says he’ll determine the next steps for his bill by the end of the month. "We’ll probably get disrupted with the August break, but despite the present election, we’ll keep going forward," he told The Hill (here).

No regulatory agency has clear authority over mobile use in cars

Friday, April 27, 2012 - 11:30am

National Highway Traffic Safety Administration (NHTSA) regulators say it's not clear which agency has the authority to regulate how drivers use mobile devices in the car.

The NHTSA can regulate "vehicle equipment," that is, that which directly controls a feature of the car. The FCC regulates mobile devices as to their use of frequencies for voice and data.

But this regulatory "doughnut hole," writes The Wall Street Journal, "reflects how much faster technology changes than the stately progress of federal rulemaking." NHTSA administrator David Strickland tells the paper, "We have more research to do."

Read The Wall Street Journal here.

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