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Obama administration endorses performance royalties

April 1, 2010 |  5:32 pm

The Commerce Department sent a "views" letter Thursday to the Senate Judiciary Committee that expressed the administration's "strong support" for the record labels' No. 1 priority: legislation (S 379 in the Senate, HR 848 in the House) that would require radio stations to pay royalties to recording artists. It's not a huge surprise, yet it's still a win for the Recording Industry Assn. of America and performers in their pitched battle with the National Assn. of Broadcasters. (Download the letter here)

At issue is whether sound recordings should carry the same performance rights as musical compositions. Today, sound recordings have performance rights online and on satellite radio, enabling labels and recording artists to collect royalties from webcasters and Sirius XM. But those rights do not extend to over-the-air broadcasts, so local radio stations pay royalties only to songwriters. Opponents of the legislation call it a tax that could crush many stations. They also contend that the promotion artists receive from stations that play their music is compensation enough.

In Thursday's letter, the Commerce Department's general counsel, Cameron F. Kerry, noted that the department had urged lawmakers several times since the 1970s to create a public-performance right for sound recordings. Such a right would be "a matter of fundamental fairness," Kerry wrote, and would bring the U.S. into compliance with the rest of the world. Because radio stations here don't pay performance royalties to foreign artists, foreign stations withhold royalties they would otherwise be paying U.S. artists. In addition, Kerry wrote, extending the performance right for sound recordings "would provide a level playing field for all broadcasters to compete in the current environment of rapid technological change, including the Internet, satellite and terrestrial broadcasters."

The NAB responded, as usual, by blasting the RIAA. Said Executive Vice President Dennis Wharton:

We're disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations. The good news is that 260 members of the House of Representatives and 27 U.S. Senators are standing with hometown radio stations and against the RIAA.

Last year the judiciary committees in the House and Senate approved HR 848 and S 379, respectively, but neither bill has advanced further. They both enjoy bipartisan backing, which is unusual for this Congress. But then, the opponents are bipartisan as well. Stay tuned.

-- Jon Healey

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