Thursday, May 7, 2009

A New Wrinkle In The Royalty Battle

Trade groups representing Internet music providers, e-commerce firms and electronics manufacturers fired back this week at an attempt by composers, songwriters and performance rights organizations (PROs) to persuade House and Senate Judiciary Committee leaders to amend copyright law to extend the "public performance right" so that it will apply to digital downloads of audiovisual works. The Digital Media Association, the Consumer Electronics Association, TechAmerica and others claim the request by ASACP, BMI, the Harry Fox Agency and the Songwriters Guild of America, would "impose a licensing obligation and potentially significant royalties on activities that are unequivocally unrelated to public performance."

This debate could complicate an ongoing examination by both committees of bills sponsored by House Judiciary Chairman John Conyers and Senate Judiciary Chairman Patrick Leahy that would bring AM and FM radio in line with Internet, cable and satellite music platforms that pay performers for their works. Groups like the Recording Industry Association of America, SoundExchange and the American Federation of Musicians are carrying the torch for that effort while over-the-air broadcasters who have long been exempt from the fee argue it should remain that way. The National Association of Broadcasters claims the bills could bankrupt local radio.

The PROs claim the change would provide them with rights equivalent to those enjoyed by their counterparts in other countries. They want legislation that would associate public performance rights with digital downloads of audiovisual works because performance rights are associated with broadcast and cable TV performances of audiovisual works. But the tech letter argues their reasoning is circular because it concludes that all digital activities implicate the same rights merely because the activities are digital. The tech letter also claims the PROs are trying to "blur the lines between making a copy and making a public performance in order to demand royalties where none are obligated, nor should they be obligated."

In a 2001 House hearing, Register of Copyrights Marybeth Peters testified that digital downloads are "the equivalent of going to a record store and buying a CD..." and in an earlier report to Congress, the Copyright Office rejected the PROs' assertion that a digital download constitutes a public performance even when no audible performance of the work occurs contemporaneously with the download, the tech groups stated. The music letter argues the choice by a consumer to view a movie or TV show in a time- or space-shifted fashion, whether streamed online or from a download, should not determine whether a songwriter or composer of the accompanying music receives a certain royalty.

Update: Sources tell Tech Daily Dose that the PROs may try to attach their proposal to legislation that would reauthorize a law that permits satellite carriers to transmit local TV broadcast signals into local markets. Policy watchers have warned the Satellite Home Viewer Act, which expires Dec. 31, could become a "Christmas tree" for an array of proposals since it is viewed as a must-pass measure. House Energy and Commerce Communications Subcommittee Chairman Rick Boucher, D-Va., for one, has urged colleagues to avoid getting sidetracked by what he called "collateral issues."