Today, Congressman Jerrold Nadler (D-NY), the Ranking Member of the House Judiciary Subcommittee on the Constitution, circulated a discussion draft of the Interim Fairness in Radio Starts Today (FIRST) Act. The legislation would address inequality and unfairness faced by performing artists and Internet radio in regard to rights and royalties.
"Terrestrial radio companies have built into their businesses an exemption from paying a performance right," said Nadler. "The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair. We can't start a race to the bottom when it comes to royalty rates and compensation for artists. Artists deserve to be paid a market-based rate for their work, just like everyone else. The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us."
The draft Interim FIRST Act recognizes that artists do not yet have a performance right in sound recordings over terrestrial radio. In order to properly compensate these creators, the bill would direct the Copyright Royalty Board to take the value of that intellectual property into account when deciding the royalty paid by a broadcaster for the Internet simulcast of its live radio music feed. It also would remove the special treatment provision that applies to satellite and cable radio for royalty rates, thereby assuring that all digital radio services pay under the same market-based rate standard.
The adjustment of the royalty to be paid by a broadcaster for its live radio simulcast is only intended to be an interim step until such time as terrestrial radio pays a performance royalty for music airplay. It is a violation of fundamental principles of intellectual property that artists would be denied the right to control their own creations, as is the case now with sound recordings over broadcast radio. The United States is the only industrialized nation that does not have a performance right for sound recordings over terrestrial radio.