A new bill has been introduced in the Senate that would require over-the-air radio broadcasters to pay royalties for performances of sound recordings. Radio already pays royalties to composers for the music they broadcast, but since the advent of radio, stations have not been required to pay royalties to the performing artists or record labels. The new bill would give sound recording copyright holders the right to control performances of their recordings, but would set up a compulsory license under which radio stations would be able to perform sound recordings pursuant to agreed-upon rates. This regime already applies to other forms of music transmissions, such as webcasting and satellite radio. As in those situations, if the radio industry and the recording industry cannot reach an agreement on an appropriate royalty rate, the rates would be determined in litigation before the Copyright Royalty Board, a three-judge panel in the Library of Congress that recently raised royalties significantly for both webcasting and satellite radio. Some analysts have estimated that the proposed bill would result in the radio industry paying $400 million to $7 billion in royalties. The bill provides an alternative payment model for small noncommercial stations with annual revenues less than $1,250,000, allowing them to pay a flat fee of $5,000 per year, and for public radio stations, which would pay only $1,000 per year.
This is not the first time such a bill has been introduced in Congress. The recording industry has fought for a performance right in radio for decades, with prior bills being defeated in 1971, 1976 and 1995. Pressure is greater now, however, since the United States is one of few countries in the world that does not require radio stations to pay record labels. Proponents of the bill claim that payments to labels for use of their music is only "fair." In the past, Congress determined that radio provided such promotional value to record labels that further compensation was not necessary -- a theory borne out by the recording industry's concerted efforts, including both regular promotion and payola, to increase the airplay of particular recordings. The National Association of Broadcasters has led the charge in opposing this kind of legislation, which is supported by organizations like the Recording Industry Association of America (RIAA) and the American Federation of Television and Radio Artists.