The National Association of Broadcasters (NAB) announced that five new House representatives have signed onto the Local Radio Freedom Act (LRFA), a non-binding resolution against any new performance royalty imposed on U.S. radio stations. At issue is broadcast radio’s historic exemption from paying artists and labels for playing music recordings over the air.
U.S. broadcast radio does pay songwriter royalties, which also apply to music publishers, and which are administered by ASCAP and BMI under government regulation, and smaller entities that operate independently. Outside of broadcast radio, internet music services do pay artists and labels for use of recordings, at a rate established by the U.S. Copyright Royalty Board (CRB) and administered by the government-sanctioned agency SoundExchange. (Radio station streams are also subject to that royalty rate and collection.)
The Local Radio Freedom Act, which now has majority support in the House, is a bulwark against legislation designed to impose the royalty. Some mighty forces are allied against the NAB’s lobbying effort: Recording artists, major labels, SoundExchange, and streaming services like Spotify and Pandora that provide non-interactive, radio-like service. The counter-movement to LRFA is called the Fair Play Fair Pay Act, and is actual legislation (not a resolution) that was most recently introduced in March. It has 21 supporters in the House.
As a non-binding resolution, the LRFA cannot become law (exemption from the royalty already is law), but it organizes support against legal attacks. As of today, the signal is that no royalty-imposing bill will pass the House of Representatives.
Nearly every other country in the world requires broadcast radio to pay the performance royalty. “Of course the creative community would like to see the Fair Play Fair Pay Act pass since we are the only modern country in the world that does not recognize this right,” said Dina LaPolt, and entertainment attorney.