House GOP Bills Envision Old Recording Royalties, Licensing Database

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By Anandashankar Mazumdar

Two House Republicans introduced bills this week aimed at revamping the copyright system for music recordings.

Rep. Darrell Issa (R-Calif.) introduced a bill that would bring pre-1972 recordings into the federal copyright system. The bill would get rid of the patchwork of state law regimes that may or may not create copyright-like rights in such recordings.

The Copyright Office would be required to maintain a database of songs under a measure by Rep. F. James Sensenbrenner Jr. (R-Wis.). That bill is aimed at allowing small business owners to understand exactly what they can play for their customers when they purchase music licenses.

Both bills come in the midst of a multi-year effort by House Judiciary Committee Chairman Robert W. Goodlatte (R-Va.) to remake the federal copyright system. After numerous hearings on the copyright system, the House Judiciary Committee said it would start to issue legislation on narrower aspects of copyright law that were likely to get broad support.

Uniform Rules for Oldies

The Issa bill, Compensating Legacy Artists for Their Songs, Service, and Important Contributions to Society Act, or Classics Act (H.R. 3301), expressly allows rightsowners to demand royalties from digital broadcasters. Pandora Media Inc. and Sirius XM Radio Inc. are facing lawsuits across the country for streaming oldies without compensation.

Under the bill, a creator of a sound recording made before 1972 has the same right to demand royalties for digital broadcasts as the owner of a newer record.

Issa’s bill also would create a compulsory license system for those recordings. That means that a digital broadcaster can play a record without permission from the rightsholder, as long as it pays the royalties and complies with other requirements set by the Copyright Royalty Board.

If a digital broadcaster enters a voluntary agreement directly with a record label, the recording artist would get the same share of royalties that they would have gotten under the compulsory license under Issa’s bill.

Issa’s bill isn’t the first legislation this year to address the status of pre-1972 sound recordings.

The Fair Play Fair Pay Act (H.R. 1836), introduced in March by Rep. Jerrold Nadler (D-N.Y.) and co-sponsored by Issa, addressed pre-1972 records, but it also would require traditional AM/FM radio stations to pay royalties to recording artists. The broadcast industry has vigorously opposed such a requirement.

Currently radio stations pay royalties only to composers or songwriters when they play songs on the air. Digital broadcasters, however, have to pay both the songwriters and the recording artists.

Issa’s bill would not take away the broadcasters’ exemption from paying recording artists for performing their records. A spokesman for the National Association of Broadcasters said that it hasn’t taken a position on that bill.

Pandora Media, the Recording Industry Association of America, and SoundExchange Inc., which collects royalties from digital broadcasters, issued a statement supporting Issa’s bill.

Giving Small Business Reliable Data

The Sensenbrenner bill, the Transparency in Music Licensing Ownership Act (H.R. 3350), stems from decades of complaints from small business owners that the current music licensing system doesn’t give them enough information to decide what licenses they need, according to a Sensenbrenner spokeswoman.

Under the current licensing scheme, a restaurant, bar, brewery, winery, or similar establishment that decides to host live music performances can’t get an accurate list of exactly which songs are covered by which licensing agencies.

There are two major licensing organizations—the American Society of Composers, Authors, and Publishers and Broadcast Music Inc.—plus two smaller ones—SESAC and Global Music Rights. According to the Sensenbrenner spokeswoman, if a business pays for a BMI license, for example, it can’t create a playlist just of BMI songs that it can authorize a performer to play.

As a result, the business ends up having to buy all four licenses if it wants to host any live music, she said. Sensenbrenner’s bill would require the Copyright Office to create a database that would give these businesses a reliable way of knowing what songs are covered by their licenses.

Coalitions representing the online music streaming, hospitality, broadcasting, retail, internet, telecommunications, and wine industries have issued statements supporting Sensenbrenner’s bill. ASCAP and BMI didn’t immediately respond to requests from Bloomberg BNA for comment.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at AMazumdar@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

For More Information

Text of H.R. 3301 is available at: http://src.bna.com/q0eText of H.R. 3350 is available at: http://src.bna.com/q0d

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