The Senate Judiciary Committee today approved the bill to impose a performance royalty (or the "performance tax" as the NAB had called it) on radio broadcasters for the public performance of sound recordings on their over-the-air stations. As was the case in the House of Representatives when its Judiciary Committee approved their version of the bill, the Committee acknowledged that there was still work to do before a final bill would be ready for the full Congress. Nevertheless, this is the first time that the Judiciary Committees in both Houses of Congress have approved the performance royalty, serving as a warning to broadcasters that this issue may well be moving to a showdown before the full House and Senate during the current session of Congress.
There was only limited debate on the bill at the Committee hearing, yet several open issues were identified. The Committee made clear that, even though it was approving the bill in the form introduced and amended by its managers, there were still changes that would be made in the future before any legislation was ready to be finalized. Senator Feinstein of California discussed several of the issues. First, the bill as amended by the Senate managers (Senators Leahy and Hatch), the bill provided relief for small broadcasters so that any performance royalty would not impose an undue burden on them. The bill proposed the following royalty structure for small broadcasters:
(I) revenues of less than $50,000 – a royalty fee of $100 per year;
(II) revenues of at least $50,000 but less than $100,000 – a royalty fee of $500 per year;
(III) revenues of at least $100,000 but less than $500,000 – a royalty of $2,500 per year;
(IV) revenues of at least $500,000 but less than $1,250,000 – a royalty of $5,000 per year.
Senator Feinstein, who stated that she favored parity between all music services that pay a royalty, suggested that this same royalty structure should be applied to small webcasters who, under current settlement agreements, can pay almost 30 times the amount that a small broadcaster with the same revenues would pay under this bill – and those settlements were an improvement on the royalties that would have been paid under the decision of the Copyright Royalty Board. Senator Feinstein stated that "the parties" were working on an agreement that would amend the bill to extend these rates to small webcasters.