Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Principal Editor: David O’Connor
Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
The Copyright Royalty Board this week published notice in the Federal Register that SoundExchange is auditing two broadcast companies who are streaming their signals online to assess compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process by commercial webcasters. A notice was published last month indicating an audit of five other broadcast companies. Notices of audits are annual events. But, as the number of broadcasters selected for audits this year is higher than in past years, we thought that we should republish some of the observations that we have made in the past about these audits.
SoundExchange may conduct an audit of any licensee operating under the statutory licenses for which it collects royalties. Such audits cover the prior three calendar years in order to verify that the correct royalty payments have been made (the notice issued this week audits the named broadcasters for 2022-2024, while the audits announced last month were filed in late 2024 and are for the years 2021-2023). The decision to audit a company is not necessarily any indication that SoundExchange considers something amiss with that company’s royalty payments – instead SoundExchange audits a cross-section of services each year (see our past articles about audits covering the spectrum of digital music companies who have been subject to these audits – here, here, here, here and here). Continue Reading Copyright Royalty Board Announces SoundExchange Audits of Broadcast Companies Streaming Their Signals – How Do These Audits Work?
Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
In the United States, performing rights in musical compositions (or “musical works” as the Copyright Act refers to them – the words and music of a song) are generally licensed by a “performing rights organization” or a “PRO.” The U.S., unlike most countries where there is a single organization that collects these royalites, has multiple such organizations. The recent doubling in the number of PROs triggered the Copyright Office to initiate a Notice of Inquiry last week requesting public comment on issues related to these organizations. What are the issues that led to this inquiry?
As set out in the Notice, in the U.S., performance rights in musical compositions have for over 80 years been licensed by three PROs – ASCAP, BMI, and SESAC. Yet, since 2013, three new PROs have begun (GMR, PRO Music, and AllTrack). These new PROs are not all equal. GMR has compiled a roster of songwriters who wrote many well-known songs in many different musical genres, and it has aggressively pursued royalties for the music in their repertoire – see, for instance, our articles here and here on their aggressive efforts to compel the radio industry to pay royalties. PRO Music, while it has sought to receive licenses from various businesses, is a newer organization with music that appears to be concentrated in certain musical genres. AllTracks is the newest of the PROs and, at this time, their licensing strategy remains to be seen.
With at least six PROs representing composers of musical works in existence, Congress has received complaints that businesses using music have been confused by demands for royalty payments from these new organizations, accompanied by threats of lawsuits if royalties are not paid. The Notice of Inquiry does not even note that the landscape is even more complicated, as there are additional PROs claiming rights in the underlying compositions in spoken word recordings – see our article here – and, from time to time, PROs arise that purportedly represent certain foreign-language recordings. There is, no doubt, confusion among those who publicly perform music and need to be licensed to play that music about who they have to pay, and what these users are getting when they pay their royalties. Continue Reading Copyright Office Commences an Inquiry into the Proliferation of Performing Rights Organizations – Looking at the Complexity of Licensing Musical Works in the United States
Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
Last week, U.S. Senators Marsha Blackburn (R-Tenn.), Alex Padilla (D-Calif.), Thom Tillis (R-N.C.), and Cory Booker (D-N.J.) introduced the American Music Fairness Act (see their Press Release for more details), with a companion bill to follow in the House. If adopted, this legislation would impose a new music royalty on over-the-air radio stations. The royalty would be payable to SoundExchange for the public performance of sound recordings. This means that the money collected would be paid to performing artists and record labels for the use of their recording of a song. This new royalty would be in addition to the royalties paid by radio stations to composers and publishing companies through ASCAP, BMI, SESAC and GMR, which are paid for the performance of the musical composition – the words and music to a song. This new legislation is virtually identical to that introduced in the last Congress (see our article here), and is another in a string of similar bills introduced in Congress over the last decade. See, for instance, our articles here, here, here and here on previous attempts to impose such a royalty.
As in the version of the bill introduced in the last Congress, in an attempt to rebut arguments that this royalty would impose an unreasonable financial burden on small broadcasters, the legislation proposes relatively low flat fees on small commercial and noncommercial radio stations, while the rates applicable to all other broadcasters would be determined by the Copyright Royalty Board – the same judges who set internet radio royalties payable to SoundExchange by webcasters, including broadcasters for their internet simulcasts. Under the bill, the CRB would review rates every 5 years, just as they do for webcasting royalty rates.Continue Reading It’s Back! American Music Fairness Act Proposing New Music Royalties for Over-the-Air Broadcasting Introduced in the New Congress
Here are some of the regulatory developments from the past week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.
It’s a new year, and as has been our custom at the beginning of each year, we dust off the crystal ball and take a look at what we think may be some of the significant regulatory and legislative issues that broadcasters will be facing in 2025. This year, there is an extra layer of uncertainty given a new administration, both in the White House and at the FCC. Already, it appears that a new administration will bring new priorities – some barely on the radar in past years – to the top of the list of the issues that broadcasters will need to be carefully monitoring.
One of those issues has been a possible FCC review of the meaning of the “public interest” standard under which all broadcasters are governed. As we wrote when President-Elect Trump announced his pick for the new FCC Chair starting on Inauguration Day, Chair-Designate Brendan Carr has indicated that this public interest proceeding will be a high priority. In his opinion, broadcasters, or perhaps more specifically the news media, have suffered from an erosion of trust, and it has been his expressed opinion that a reexamination of the public interest standard might help to restore public trust. We noted in our article upon his selection that this is not the first time that there has been a re-examination of that standard. It has traditionally been difficult to precisely define what the standard means. In the coming days, we will be writing more about this issue. But suffice it to say that we are hopeful that any new examination does not lead to more paperwork obligations for broadcasters, as seemingly occurred whenever any broadcast issue was addressed by the current administration. As we note below, there are several paperwork burdens that we think may disappear in the new administration, so we are not expecting more paper – but we will all need to be carefully watching what develops from any re-examination of the public interest standard.Continue Reading Looking Into the Crystal Ball – What Legal and Policy Issues are Ahead for Broadcasters in 2025?
Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
In a Press Release issued on November 1, the Radio Music License Committee announced the results of its arbitration with SESAC. Despite the arbitrators’ decision that rates for commercial radio broadcasters are going up modestly, RMLC declared the decision a win. How can an increase in royalties be a win? Let’s provide some background on this decision and why the radio industry may breathe a sigh of relief.
First, it is important to set the background for the decision. As we wrote here, in 2015, RMLC and SESAC settled an antitrust lawsuit brought by RMLC, agreeing that rates for the public performance by commercial radio broadcasters of the catalog of SESAC music would be set by binding arbitration. Every four years, a proceeding is held to set the royalties to be paid by a broadcaster for music used in its over-the-air programming and on internet streams of that signal.
The royalty currently paid by commercial radio stations was set by a settlement between RMLC and SESAC before arbitration in 2020 (see our article here). That agreement, under which music radio stations have been paying .2557% of revenue, expired at the end of 2022. As RMLC and SESAC could not mutually agree to new royalties, the recent arbitration was held to set royalties for the period from January 1, 2023 through December 31, 2026. The decision announced on Friday set those royalties at .2824% of revenue. Why is this increase from .2557% to .2824% considered a win?Continue Reading RMLC Announces Arbitration Decision on SESAC Royalties for Commercial Radio Stations for 2023-2026
