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
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
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