Friday, November 18, 2011 - 12:00pm
Four music industry lobby groups sent a letter to the Congressional debt-reduction "supercommittee" yesterday, encouraging lawmakers to let the FCC auction television broacast spectrum wireless operators. The American Federation of Musicians, the Recording Academy, SoundExchange and the Music Managers Forum say the auctions could raise billions of dollars in revenue for deficit reduction, as well free up spectrum for wireless broadband devices. Broadcasters that own television licenses want to choose whether they relinquish this spectrum, and want to be fully compensated for doing so.
But why are music industry interests speaking up regarding television spectrum? The Hill's "Hillicon Valley" blog put it simply: "Broadcasters and the music industry have a long-running feud over whether artists should receive royalties when radio stations play their songs."
The music industry groups say they are interested to "hasten the migration of music fans to cutting edge (wireless broadband) platforms that compensate artists," by paying royalties they say are a "basic economic and civil right for musicians."
The groups wrote, "It would seem to us that the NAB is not entitled to spectrum owned by the public, or costs associated with relinquishing it, and the federal government reclaiming this spectrum for purposes of deficit reduction is the kind of shared sacrifice that is required in these difficult times."
The NAB doesn't buy it. Spokesman Dennis Wharton fired back, "By coupling a TV spectrum issue with an unrelated performance tax on radio stations, the music industry sets the standard for grasping at straws. This is a Hail Mary pass that deserves to fall incomplete."
Inside Radio believes the letter is part of a new music industry "tactic: find ways to make it difficult for broadcasters to do business such as by opposing license renewals. The request to the Super Committee fits into that strategy, and similar moves are in the works, according to insiders who say bad feelings among many in the music community linger."
What's more, Inside Radio sees implications for online radio too. "As online streaming royalties grow bigger with each passing year, (NAB president Gordon) Smith believes webcast rates are likely to become intertwined with an on-air royalty issue," they write today. "Broadcasters’ current streaming royalty agreement with SoundExchange expires in 2015 yet Smith thinks there could be a way to resolve both the on-air and digital royalty issues sooner than that, potentially with something similar to a universal settlement. But with some broadcasters more digitally invested than others, radio’s internal royalty debate may once again break down between large and small market operators. Smith said he was optimistic that won’t happen, suggesting any new proposal would include an even more 'progressive system' where size dictates costs."
from The Hill here
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