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Local Radio Freedom Act reaches majority support — does it mean anything?

nab logo rectangleThe Local Radio Freedom Act, a non-binding resolution that has been slowly garnering support over eight months, attained a majority in the House of Representatives with the addition of six member signatures. Three senators also signed on this week.

The resolution carries no legislative power; it is more a measure of sentiment and a promise of meaningful votes if push comes to shove in the future.

At issue is the exemption from performance royalties to record labels granted by the U.S. government to terrestrial radio. Radio station web streams are subject to royalties, as are all Internet streams. Advocates of the legacy law say that radio inherently and uniquely advances the music industry by providing music discovery and promotion at huge national scale. Detractors point to spiralling sales of traditional music products like CDs and downloads, as consumers flock to streaming music which generates a money flow to record labels.

The LRFA’s majority support status is lauded by the National Association of Broadcasters. Gordon Smith, NAB President, issued a comment that seemed focused more on the business vulnerability of the local radio industry than the legitimacy of radio’s exemption in the digital age: “We applaud lawmakers for opposing a job-killing performance royalty that would damage this partnership and hurt local radio’s ability to serve our communities,” Smith said. He also noted the promotional value of free music exposure: “Broadcasters across the country look forward to continuing to provide billions of dollars in promotional value for free radio airplay.”

On the other side of the rhetorical aisle, Daryl Friedman of the Recording Academy took a sarcastic tone: “Along with resolutions establishing ‘National Watermelon Day’ and ‘Sense of Congress Supporting National Pet Week,’ the NAB has added the ‘Local Radio Freedom Act’ to Congress’ long list of non-binding resolutions. We hope the broadcasters will continue to be distracted by their non-bill, while Congress continues its copyright review leading to the establishment of a radio royalty for artists.”

An organization called musicFIRST Coalition promotes an opposing proposal called Fair Play Fair Pay Act, which seeks a federal removal of radio’s royalty exemption.

 

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Brad Hill

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