Oregon Senator Ron Wyden (D), who introduced the Internet Radio Fairness Act in the U.S. Senate in September, says the debate over Internet radio royalties is a battle between entrenched interests and a healthy future for music. His bill, he insists, is about ensuring a fair market that will help webcasting grow, leading to "more income for artists, and more music choices for consumers." Pitted against that future are "a few big record companies... (who) are using uncompetitive practices to crowd out the competition," Wyden told attendees of the Future of Music Summit yesterday in Washington, D.C.
He made a case that artists and independent labels should be siding with the webcasting industry in support of the new legislation, as they stand to benefit from a more robust Internet radio market his bill hopes to enable.
"The history of American music is one of artistic creativity, technological advancement, and particularly those innovators - the dreamers - who are willing to disrupt the status quo. And in my view, we've got to make sure that's what the future is all about," he said.
Wyden's Internet Radio Fairness Act (IRFA) seeks to reform the process by which Internet radio royalties are determined by requiring judges use the same legal standard they use when setting satellite and cable radio rates, known as 801(b). Currently, Internet radio is unique in that (as mandated by 1998's Digital Millennium Copyright Act), judges determine a rate based on what they feel a "willing buyer" and "willing seller" would agree to in a hypothetical market. While satellite and cable radio pay about 8% of their revenue for royalties, Internet radio rates have equaled 50-70% (or more) of revenue for webcasters.
"It is the job of policymakers to ensure that the law and public policy doesn't favor one business model over another, and particularly that it doesn't favor incumbents over insurgents," said Wyden. "We've got to make sure that the past doesn't get a leg up on the future, and I think a lot of you remember that in these kinds of debates, it seems like the future doesn't have a lobbyist."
Read Wyden's speech in Digital Music News here.