Congress 2018

It’s a maneuver that has successfully sidelined efforts to pass a performance royalty on broadcast radio during the past decade as bills have been introduced to do away with the AM/FM exemption. So it’s not all that surprising to see the radio industry rally its Washington allies with the Local Radio Freedom Act – now reintroduced in both the House and Senate. Critics have said it’s nothing more than a nonbinding resolution. But the reality is once lawmakers add their names and take a stand against a radio royalty, it has been an effective block against legislation seeking to change federal copyright law and force radio to pay record labels and artists for airplay.

The Local Radio Freedom Act explicitly recognizes the “mutually beneficial relationship” between local radio and the recording industry, including the “free publicity and promotion” that performers receive and use to sell records and concert tickets. It also says that changing the law to create a new performance right for AM/FM would lead to thousands of local radio stations suffering “severe economic hardship” if any new fee is imposed.

The music-industry backed musicFirst Coalition has in recent weeks been urging lawmakers to not sign the resolution, calling it “misleading and anti-artist.” Nevertheless Rep. Mike Conaway (R-TX) and Rep. Kathy Castor (D-FL) have so far collected signatures from 116 House members on both sides of the aisle who oppose changing the law. That’s more than half the 218 needed to block any bill that would end radio’s decades-old performance royalty exemption. It’s also roughly the same number as when a similar resolution was introduced two years ago. The 2017 resolution carried 115 co-sponsors and eventually attracted a total of 227 signatures.

On the Senate side, Sens. John Barrasso (R-WY) and Martin Heinrich (D-NM) are the lead cosponsors of a companion resolution, and they’ve so far added the signatures of three other Senators.

National Association of Broadcasters president Gordon Smith said the industry is “deeply grateful” for the “broad, bipartisan display” of congressional support. “Decade after decade, free radio airplay has propelled the careers of countless performing artists and generated hundreds of millions in revenue for the record labels,” he said. “We thank lawmakers for standing in opposition to a job-killing performance royalty that threatens to destroy the economics of local radio.”

Trevor Francis, a spokesman for the musicFirst Coalition, said the resolution smacks of a “here we go again” strategy that will see broadcasters accumulate names on a resolution that is falsely positioned as a measure to protect local radio. “Meanwhile, the radio marketplace continues to change for NAB’s members, and not for the better. The NAB may want to focus less on lobbying in D.C. and more on how radio can provide music fans the innovation they want in today’s digital world,” Francis said.

NAB is rallying local broadcasters to explain the issue to their members of Congress when they’re back in the district. That task is larger than it was two years ago since the 116th Congress has 89 new House members and nine new Senators. The NAB will also marshal its troops next week during its annual State Leadership Conference. On Wed., Feb. 27 broadcasters will spend the day on Capitol Hill making their case to members of Congress and NAB executive VP of industry affairs & special projects Steve Newberry said in an upcoming Inside Radio Podcast that the performance royalty proposal remains the most important issue for radio.

“We all know the argument: broadcasters compensate the performers through promotional value. We’ve done that for decades and we continue to do that,” Newberry said. “But we’re going to have that challenge. It’s a changing world and we’re going to continue to fight that on Capitol Hill.”

Rep. Jerrold Nadler (D-NY) has been the lead sponsor of the performance royalty proposal during the past several sessions of Congress and he has yet to reintroduce his Fair Play, Fair Pay Act. But if he does, Nadler will be in a better position to advance the bill. That’s because with Democrats taking over the House, Nadler has become chair of the Judiciary Committee. Nadler’s office didn’t respond to a request for comment.

Newberry said Nadler has been a “strong advocate” for performers, but he doesn’t expect his new House leadership role will significantly alter the debate in Washington. “I don't think we’re going to see necessarily a whole lot more focus on that than we have but he is certainly a very formidable leader for the performers and their position,” Newberry said. “I’ve had opportunities to meet with him personally and I don’t think he wants do something that’s going to be detrimental to the radio industry—he wants equity, he wants fairness.”