It has been in circulation since 2021, when the American Music Fairness Act was introduced to Congress.The proposed bill intends to rectify what musicians and their chief lobbying organization, SoundExchange, call a “decades-long injustice.” The argument is over a historical anamoly which has always exempted broadcast radio stations from paying creator royalties — songwriters for the most part.
Radio does pay SoundExchange to distribute mechanical royalties for the records played on the air. On the digital side, services like Spotify, Pandora, and AccuRadio are liable for both parts of the music royalty structure — the records and the songwriters. Likewise, radio stations pay both royalties on their realtime online streams. But over-the-air is exempt, and that titanic exemption is nearly unique in the world.
“Music creators have been forced to give away their work for far too long,” SoundExchange declares as this latest round of congressional consideration gets started.
Both sides are vigorously championed, with the National Association of Broadcasters (NAB) advocating for continued exemption. A key NAB argument throughout this political struggle has been that radio budgets should not be burdened with a new government mandate — the NAB calls this a “tax.” (Royalty payments do not, and would not be, received by the U.S. Treasury.)
Previous radio lobbying resulted in the creation of a nonbinding bill called the Local Radio Freedom Act, which has been endorsed by at least 250 members of the House and Senate. It focuses on small-town radio. While SoundExchange mentions “billion-dollar corporations such as iHeart,” the NAB pleads the cases oflocal indie stations: “The American Music Fairness Act would mandate a new performance tax on free, local radio stations that would jeopardize local jobs, prevent new artists from breaking into the recording business and harm the hundreds of millions of Americans who rely on local radio.”
We look forward to arguments, but don’t anticipate any change to this longstanding gridlock.
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