Performance Tax Bill Introduced in Congress

Congressman Mel Watt (D-NC, 12th District) has introduced a new performance tax bill in the U.S. House.  The bill, called the "Free Market Royalty Act," would give record labels and artists-for the first time-a "performance right" in recorded music that local radio stations play over the air.
 
The bill does not set any specific royalty rate that local commercial radio broadcasters would pay to broadcast recorded music.  Instead, the bill would require commercial radio stations to negotiate a license with record labels and artists through SoundExchange.  The ultimate aim of the bill, however, remains the same as previous performance tax bills-to force local radio stations to pay fees to record labels and artists in order to play recorded music over the air.  
 
For broadcasters who stream music on the Internet, the bill would also repeal the current compulsory copyright license structure through which webcasting royalty rates are set and, instead, would require broadcasters and rights holders to negotiate rates and terms.  
 
For noncommercial broadcasters who cannot reach agreement on the terms of a public performance license, the bill would allow a petition to the Copyright Royalty Board to establish royalty rates and terms.
 
Obviously, any regime under which radio stations are required to pay a public performance fee is a step in the wrong direction.  The current system for on-air play works and recognizes that free air time is a fair exchange for free promotion.  More than 180 members of Congress have previously agreed with broadcasters and opposed a performance tax.
 
We will provide you additional information on this issue in the coming days.

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