Opposition to Internet Radio Fairness Act grows

Josh Peterson Tech Editor
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Opposition is continuing to grow on Capitol Hill against a bill that proposes to dramatically reduce the royalty rates that Internet radio providers currently pay to music studios and artists.

Music services pay a percentage rate to the music licensor per play per song, also called a music royalty rate. The Internet Radio Fairness Act — sponsored by Utah Republican Rep. Jason Chaffetz, Colorado Democratic Rep. Jared Polis and Oregon Democratic Sen. Ron Wyden — would allow Internet radio providers to pay the same subsidized royalty rate for music as cable and satellite radio providers.

That would allow Internet radio providers like Pandora to play copyrighted musical content for a fraction of the price they pay now.

In a Dear Colleague letter sent on November 13, Tennessee Republican Congresswoman Marsha Blackburn voiced her objection to the bill, and drew attention to a letter sent by tax reform group Americans for Tax Reform also opposing it. ATR says they believe the Internet Radio Fairness Act would allow the government to further interfere with the free market by setting royalty rates.

Council for Citizens Against Government Waste, a government watchdog group, also joined in on the opposition with a letter to the Senate Judiciary Committee and the House Subcommittee on Intellectual Property, Competition and Internet on November 16.

Council for Citizens Against Government Waste president Thomas Schatz argued that the bill would bring Internet radio services under a standard developed in the 1970s.

“The result is to move nearly 1,800 entities that currently operate under the market-based standard down to the below-market standard, instead of moving the three grandfathered entities up to the market-based standard,” he said, referring to satellite radio providers SiriusXM and Musak, and cable music providers like Music Choice.

“And the bill proposes a new, political, presidentially appointed board that will maximize the lobbying potential of the recipients of the government subsidy,” said Schatz.

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