noncommercial music royalties

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 FCC issued a Public Notice extending the deadlines for all filings in the FCC’s LMS or online public file

The Copyright Royalty Board yesterday published in the Federal Register the proposed rates for the public performance of musical compositions by noncommercial broadcasters for the period 2023 through 2027.  The rates reflect settlements between ASCAP, BMI, SESAC and GMR with various organizations representing noncommercial broadcasters. The Corporation for Public Broadcasting agreed to one set of rates paid to cover NPR and PBS affiliates. The NRB (the religious broadcasters’ organization) has a Noncommercial Music License Committee that agreed to another set of rates that apply to non-NPR radio stations not owned by colleges and universities, setting out rates that these noncommercial stations pay to each of these rights collection agencies. For these radio stations, the rates are based on the population served by each noncommercial station. College and university-owned stations can take advantage of a third set of rates, based primarily on the number of students in the school with which the station is affiliated.  Comments and objections, if any, to these proposed rates are due on or before February 27, 2023.

Commercial broadcasters have royalty rates that are to be paid to these performing rights organizations (or “PROs”) set not through the Copyright Royalty Board but instead through varying processes.  ASCAP and BMI are subject to antitrust consent decrees (see our articles here and here on arguments about those decrees).  The decrees provide that, if the PRO cannot reach an agreement with representatives of the commercial radio industry (usually the Radio Music License Committee – see our article on RMLC here – although commercial religious broadcasters also negotiate rates with these entities through the NRB), a US District Court judge in New York will hold a trial, acting as a “rate court” to determine the amount for reasonable rates.  ASCAP and BMI are currently negotiating with the RMLC on new rates for commercial broadcasters.  SESAC is also subject to antitrust settlements with both the RMLC and the TV Music License Committee.  If SESAC and the committees cannot reach agreements, an arbitration panel sets the rates (see our articles here and here on radio rates set as a result of this process).  After prolonged litigation with GMR to have their rates reviewed in some manner, the RMLC last year dropped its lawsuit seeking that relief and GMR now has no oversight as to the rates it charges (see our article on the GMR license that resulted).  Noncommercial broadcasting, however, under Section 118 of the Copyright Act, has its PRO obligations set by the Copyright Royalty Board and, like this year, the result is almost always a settlement between the parties (even though, theoretically, the Board could hold hearings to set the rates if the parties had not agreed to the rates). 

Continue Reading CRB Releases Proposed ASCAP, BMI, SESAC and GMR Rates for Noncommercial Broadcasters

A new Chief Copyright Royalty Judge of the Copyright Royalty Board has just been named by the Librarian of Congress.  According to the Press Release announcing his appointment, David Shaw will fill that position after having previously served as an administrative law judge on the International Trade Commission for over 10 years.  There, he heard complex cases dealing with detailed financial matters – experience that sounds relevant to the kinds of cases he will be deciding on the CRB.  The Copyright Royalty Judges decide cases determining the marketplace value of music when  setting royalty rates, and that look at the relative value of programming when deciding the distribution of cable royalties to program copyright holders.  In addition to ITC experience, Shaw was a judge at the Social Security Administration and, according to his biography, worked in the General Counsel’s office at NPR early in his career.  With the appointment of this new Chief Judge, we thought that it would be worth looking at some of the specific areas in which the CRB makes decisions that affect media companies.

The CRB is principally charged with rates and distributions for copyrights governed by a “statutory licenses.”  A statutory license is created by Congress when it is believed that individual negotiations between copyright holders and copyright users would either be unduly complex so as to be almost unworkable or where an efficient market would not otherwise exist.  Essentially, the statutory license means that the copyright owner must license the work that they own – they cannot restrict its use – if the user pays the royalties set by law or established by the CRB and abides by the conditions for use set out in the law.  See our article here about music statutory licenses and our articles here and here on some of the issues with the TV statutory licenses.  The conditions of use are often carefully restricted so as to only cover very specific uses under the statutory license (see our article here on the conditions placed on the use of music under the statutory license for webcasting – the public performance right for sound recordings used by noninteractive services discussed below).

Continue Reading New Copyright Royalty Board Chief Judge Named – Looking at the Issues Considered by the CRB of Importance to Media Companies