Non-profit digital rights advocacy and legal organization Electronic Frontier Foundation yesterday published an editorial supporting passage of the Internet Radio Fairness Act.
That's the bill, introduced to both houses of Congress, that advocates say "would establish an equitable royalty rate setting standard for Internet radio" (background in RAIN here). The bill, among other measures, would require copyright judges to determine sound recording royalty rates for Internet radio using the "801(b)" standard of the Copyright Act (as is used for all other forms of digital radio), instead of the DMCA-mandated "willing buyer willing seller" standard.
(You can read more on 801(b) and "willing buyer willing seller" here.)
"Congress gave older, more established companies a leg up. For satellite and cable radio, the judges set prices to give the labels and artists a 'fair return' and the music service a 'fair income,'" writes EFF. The "fair return" and "fair income" refer to the 801(b) standard. "In practice, the judges tell these services to pay about 10% of their revenues to the artists and labels. For Internet radio, though, the judges are supposed to set rates based on what a 'willing buyer and a willing seller' would do in an open market. This sounds pretty good, except that there is no open market, so there’s no consistent benchmark. As a result, judges have set Internet radio royalty rates at cripplingly high levels."
The EFF piece concludes, "As long as the government is setting these rates, they should be using the best, fairest process possible. The Internet Radio Fairness Act will help make that happen."
Read the EFF editorial on their website here.
IRFA unconstitutional quashing of free speech
Hi Paul.
We are about to publish a legal analysis of sec 5 of this act. It is pretty clear it would prevent "any group of rightsholders" from even speaking about any direct licensing deal. By making that activity a criminal violation of the Sherman act. A group could be two songwriters? a band? a union? We know where this clause came from. It's an attempt to codify Sirius/XMs suit against SoundExchange and A2IM. The problem is this is a stunningly broad and regressive clause. This is the Broadcast industries SOPA. It will censor speech. We believe that this clause is unconstitutional and once digital rights advocates like EFF take time to actually read the bill they will reverse course on this. Here is the clause in case you havent' seen it.
"Nothing in this paragraph shall be construed to permit any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective, and any such action that affects interstate commerce shall be deemed a contract, combination or conspiracy in restraint of trade in violation of section 1 of the Sherman Act (15 U.S.C. 1)."