Increasingly, music is being consumed digitally, and there are a variety of websites and services providing digital music to the public. Unfortunately, the laws governing performance royalty rates pre-date the current marketplace, leading to significant disparities in government-set rates. This unfair treatment is most notable for Internet radio services, some of whom have paid over 50% of their revenues to royalties, while Sirius XM, by comparison, paid 8%.
CCIA supports legislative action to correct discriminatory government rates, consistent with the association’s long-standing position on non-discriminatory Internet policy. Emerging online services should not be discriminated against based on outdated legislation that failed to anticipate future technological development. Leveling the playing field to be technologically neutral will encourage more innovation and competition, leading to more services entering this field with newer business models, more choice for consumers, and more compensation for artists.
Congress must take action to make calculation of performance royalty rates consistent across different media. There has been some activity on this front in the 112th Congress. In late September 2012, the bipartisan bicameral Internet Radio Fairness Act (IRFA) was introduced by Reps. Chaffetz, Issa, Lofgren, and Polis in the House (H.R. 6480), and Sen. Wyden in the Senate (S. 3609). CCIA supports the IRFA, and is a founding member of the Internet Radio Fairness Coalition.
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