The House of Representatives Judiciary Committee today approved a bill that would impose, for the first time, a royalty on radio broadcasters for the public performance of sound recordings in their over-the-air broadcasts. if this bill were to be adopted by the full House of Representatives and the Senate, and signed by the President, broadcasters would have to pay for the use of sound recordings (the actual recording of a song by a particular musical artist) in addition to the royalties that they already pay to ASCAP, BMI and SESAC for the public performance of the underlying musical composition. While, from the discussion at the hearing today, the bill is much amended from the original bill (about which we wrote, here) to try to address some of the issue that have been raised by critics, the Committee made clear that there were still issues that needed to be addressed – preferably through negotiations between broadcasters and the recording industry – before the bill would move on to the full House for consideration. It was, as Representative Shelia Jackson Lee of Texas stated, still a "work in progress." In fact, the Committee asked that the General Accounting Office conduct an expedited study of the impact of this legislation on radio and on musicians – but it did not wait for that study before approving the bill – despite requests from some royalty opponents that it do so.
While I have not yet seen a copy of the amended bill that Congressman John Conyers, the Chairman of the Committee, said had been completed only a few hours before the hearing, the statements made at the hearing set out some details of the changes made to the original version of the bill. First, changes were made to reduce the impact on small broadcasters – reducing royalties to as little as $500 for stations that make less than $100,000 in yearly gross revenues. Interestingly, Representative Zoe Lofgren pointed out that, in a bill that means to address the perceived inequality in royalties, a small webcaster with $100,000 in revenues would be paying $10,000 in royalties – 20 times what is proposed for the small broadcaster. And the small broadcaster who would pay $5000 for revenues up to $1.25 million in revenue would be paying 1/30th of the amount paid by a small webcaster making that same amount of revenue.