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IRIS 2017-6:1/32

United States

Fair Play Fair Pay Act

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Jonathan Perl

Locus Telecommunications, Inc.

Two bipartisan bills have recently been introduced in the United States House of Representatives to establish a public performance right for sound recordings on terrestrial radio. Under current copyright law, satellite and Internet radio are required to pay royalties to the owners of the copyrighted works, whereas terrestrial radio is exempt from this requirement. This has resulted in a disadvantage for webcasters like Pandora and iHeartRadio.

The Fair Play Fair Pay Act, which was originally introduced in the United States House of Representatives in April 2015, but never passed, was referred to the House Committee on the Judiciary on 30 March 2017. The bill aims to remedy the competitive disadvantage by ensuring “all radio services play by the same rules and all artists are fairly compensated.” Its sponsors explained the change was long overdue because “the current system disadvantages music creators and pits technologies against each other by allowing certain services to get away with paying little or nothing to artists”. The bill faced immediate backlash from the National Association of Broadcasters (NAB), the radio industry's leading trade group, which opposes the bill. Its president and CEO lambasted the bill for imposing "a job-killing performance royalty on America's hometown radio stations".

A similar proposal called the PROMOTE Act was referred to the United States House of Representatives Committee on the Judiciary on 5 April, 2017. The PROMOTE Act takes a slightly different approach: it provides that if radio stations are offering artists promotion rather than payment, the artists should have the right to decline the promo and ask that their records not be played. The bill’s proponent argues that his approach is a “workable solution that would allow those who would otherwise be paid a performance right to opt out of allowing broadcasters to play their music if they feel they’re not being appropriately compensated”, and is a “a win-win that helps solve this decades long problem in a way that’s fair to both parties”.