Congressional Supporters of Performance Royalty Tell NAB to Negotiate With Music Industry - Will It Resolve Anything?
This week, six Congressional supporters of the broadcast performance royalty wrote a letter calling upon the NAB to sit down with music industry representatives to reach a "negotiated resolution" of the "longstanding disagreement" in a session to last from November 17 through December 1. The letter suggests that the negotiations will be supervised by Members of Congress and the staff of the Judiciary Committees of Congress, with a report to be made by the Committee staff at the end of the negotiation period which will be considered by Congress in further actions on this issue. The parties are instructed to bring individuals who have decision-making power to reach an agreement. Could this call for negotiations really result in a deal that would lead to a law requiring that radio broadcasters pay a fee for the use of sound recordings on their over-the-air stations?
First, we must ask whether there will even be any negotiations. The NAB's only statement issued thus far says that they are willing to "talk to Congress" about the matter, but that they hoped that the discussion would include some of the almost 300 members of Congress who oppose the royalty. As we've written before, the NAB has over 250 Congressmen and over 20 Senators signed on to resolutions opposing the performance royalty. With the initial letter being signed by 6 supporters of the royalty, and the Judiciary Committees of both the House and Senate being filled with its supporters, why would the NAB be willing to jump into what could be seen as the lion's den - engaging in a high stakes competition where the referees are on the record as favoring one side? Note that the NAB statement says nothing about participating in "negotiations", which the former President of the NAB had said that he would never do. We will have to see whether the change at the top of the NAB will bring a change in the attitude of the NAB. New NAB President Gordon Smith, who has been in his job less than two weeks, is said to be more of a consensus-builder than his predecessor, but he has had a very short time to come up to speed on the issue or to build any sort of consensus among those he now represents on where to go on this issue.
But, beyond the question of whether the parties are even willing to participate, could these sorts of negotiations actually be successful? Copyright issues, as they are so detailed and technical given the complexity of the mechanics of the Copyright laws, are often resolved through negotiations - often at the urging of Congress. Congress tends to believe that a negotiated solution is more likely to anticipate the issues that could arise than is an imposed legislative solution where one side totally prevails over the other. But here, there are many parties involved who may not see eye to eye on the kinds of issues that might be discussed in any negotiation.
Congress has called on the parties to bring people who can make decisions to participate in the sessions, yet who would that be? On the recording industry side, it would seem that the 4 major labels, the association of independent labels, and the artist union representatives would be able to easily fit into a room to negotiate. On the other side, while it might seem that the NAB is the appropriate party, the NAB itself does not pay royalties - its members do. And its members are a diverse group. There are many public companies that own stations, and hundreds of private ones. There are large market stations and small market ones - differing constituencies that have differed on performance rights issues in the past. And, perhaps most importantly, there are many stations with differing interests as to what might be included in any negotiations. Some groups have evolved digital operations while others are still focused almost solely on their broadcast operations. Some have interests in waivers of the performance complement (which was an issue in the NAB-SoundExchange agreement on Internet radio royalties) while others don't. Some do significant amounts of talk or news, while others are much more music intensive. All these diverse interests would have to be taken into account in reaching any deal that would cover broadcasters - and two weeks with Thanksgiving in between does not seem to provide the time to reach a deal. In fact, given that broadcasters for the most part believe that the issue is all but dead given the majority of the Congress signing on to the anti-performance royalty resolution, how do you then convince broadcasters nationwide that a deal is in their best interests when they have been so adamant against even talking about a deal. Given all these obstacles, it simply does not look possible to have a deal in this time period - even were the parties to actually sit down and try to work something out.
So, if the parties are not sure to negotiate, and if the prospects of a deal in two weeks in late November are so slight, why bother with the letter? One thought is that the letter is another well-orchestrated publicity move by royalty proponents. Just like the MusicFirst petition filed at the FCC complaining about broadcasters supposedly boycotting musicians who supported the royalty (with little or no evidence of any real boycott by any commercial station), this letter has already generated press attention putting a spotlight back on the issue - attention that has perhaps flagged somewhat since the NAB had signed up its majority of the House of Representatives onto the resolution opposing the royalty. Perhaps by trying to make the NAB look bad, the supporters of the royalty are trying to pry some of the legislators off their positions in favor of the NAB and against the performance royalty (see our post here about the potential for ways that the bill could move even with a majority now signed onto the anti-performance royalty resolution).
So, will any of this work? Watch and see, as we should know whether negotiations take place very soon.
