Those concerned about outdated laws that discourage new companies from offering  music to consumers over the Internet have formed a coalition to advocate for modernizing the copyright performance royalty rate setting process that now discriminates against new market entrants. The Computer & Communications Industry Association is joining other organizations and companies today to launch the Internet Radio Fairness Coalition.

The Coalition will lobby for updates to the rules that set music performance royalty rates at different levels, depending on the type of technology involved. The result for industry is that Internet radio companies pay half their revenues in royalties, whereas cable providers pay 15 percent of their annual revenues and satellite providers pay 7.5 percent.

So far a bipartisan group in Congress has responded by introducing The Internet Radio Fairness Act, which would give consumers more choices and robust products for listening to music and enable artists to earn more money as Internet radio grows.

The following can be attributed to CCIA President & CEO Ed Black:

“Our piecemeal legislation covering music royalties rates was enacted decades before we had the Internet or current technology. It’s out of tune with the realities of the 21st Century marketplace. Updated rules would help deliver music to the public in devices of their choice and create a viable digital music business that benefits artists and innovators.”

“Government shouldn’t be in the business of handicapping competitors based on the age of the technology they use — not to mention disadvantaging new market entrants. But they are having to follow the 1976 Copyright Act, which actually directs the bureaucrats setting royalty rates to ‘minimize any disruptive impact’ on existing industries. So in other words, the government is being directed to protect incumbents and discourage new market entrants. It’s time to change the law to encourage innovation – not discourage competition.

The following can be attributed to CCIA Vice President Cathy Sloan:

“We are pleased that members of Congress have stepped forward on a bi-cameral, bipartisan basis to give this issue of equity in music performance royalty rates a fresh look.  We look forward to a Congressional hearing late this year where diverse stakeholders will be heard on this issue.  If Congress passes this measure, it will promote innovative options for consumers to discover new music and artists in genres they enjoy, while enabling job growth in Internet radio.”

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