RESPECT Hearing Comes to Dubious Conclusion

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RESPECT Hearing Comes to Dubious Conclusion

Vice Chairman of the Subcommittee on Courts, Intellectual Property and the Internet Howard Coble opened the House of Representatives discussion on songwriting copyrights today with an iteration of his love for bluegrass. Music is an important part of our nation’s history, he explained, and the nine assembled witnesses possessed “more than a passing interest in this issue.”

And there were a lot of issues to cover. Both the Songwriters Equity Act and the RESPECT Act were on the table, which together would give songwriters performance royalties and bundled songwriting royalties for music recorded before 1972. California Representative Darrell Issa held up a vinyl record of Neil Young’s Harvest, reiterating that because it was released the day before the infamous Feb. 15, 1972 Congressional copyright ruling, Young would not be compensated with songwriting royalties.

Songwriter Rosanne Cash was the first witness to testify, lamenting that her late father would never receive royalties for “Walk the Line,” though an artist who recorded a cover today could. Because of the current situation, Cash “sees musicians giving up on their dreams every day,” rather than sticking it out in an industry that doesn’t want to pay them. Charles Warfield, President and COO of the Inner City Broadcasting Corporation, highlighted the integral role of the “public good” in copyright law. Radio should remain a free resource, he said, not just because of cultural enrichment, but also because of coverage of local disasters. He cited the tornadoes which ravaged the Midwest in April.

His testimony was followed by Christopher Harrison, Assistant General Counsel at Pandora, and David J. Frear, CFO at Sirius XM. Both representatives of the music streaming sphere maintained that terrestrial radio should be held to the same standards as internet radio: if they’re all going to take the heat, they’d better pay the same amount to artists.

As it stands, the United States is the exception to the rule in terms of terrestrial radio compensation. California Representative Judy Chu cited the story of Janita, a Finnish recording artist who made one third of her income through FM and AM plays and saw that income disappear when she became a U.S. citizen. Warfield maintained that terrestrial radio simply can’t afford to pay artist royalties, to which Chu replied that the only other countries following this model are North Korea and Iran.

Frear’s insistence that 80 percent of artists on Pandora don’t get terrestrial plays met with resistance from Cash. Last year, Pandora tried to rally support for the Internet Radio Fairness Act by petitioning artists. Had the act passed, those same artists would face a cut in their royalties; Cash called this move manipulative.

The flipside of the argument came from Michael Huppe, President and CEO of SoundExchange, a nonprofit licensing firm that works for distribution transparency. Huppe congratulated Congress on “getting it right” with a statutory license, allowing Pandora and Sirius to become some of the fastest growing companies in America. Requiring terrestrial radio to pay the same royalties as internet radio would level the playing field. A simultaneous ratification of the RESPECT act would ensure that legal appeal and economic value would allow companies to succeed, rather than forcing them to exploit current loopholes in the system.

The questions mounted: what is the fair, transparent way to incentivize music creators? Can there be a free market in an industry with differing standards of copyright law? Are free promotion and statutory licences adequate substitutes for performance royalties?

The Hearing on Music Licensing Under Title 17 of the Copyright Act adjourned at 12:52 p.m., with the conclusion that action is needed to rectify the situation. Prevailing arguments leaned toward ratification of the RESPECT Act, though the jury is still out on whether terrestrial radio will have to pay performance royalties.

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