[Congressional Record (Bound Edition), Volume 153 (2007), Part 27]
[Extensions of Remarks]
[Pages 36447-36448]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 THE ``PERFORMANCE RIGHTS ACT'' OF 2007

                                 ______
                                 

                         HON. HOWARD L. BERMAN

                             of california

                    in the house of representatives

                       Tuesday, December 18, 2007

  Mr. BERMAN. Madam Speaker, today, I join my colleagues in both the 
House and the Senate in introducing ``The Performance Rights Act'' of 
2007. This legislation is a first step at ensuring that all radio 
platforms are treated in a similar manner and that those who perform 
music are paid for their work.
  This narrowly tailored bill amends a glaring inequity in America's 
copyright law--the provision in section 114 that exempts over-the-air 
broadcasters from paying those who perform the music that we listen to 
on AM and FM radio. For as long as I have been working on the 
intellectual property subcommittee, I have been troubled by this policy 
that sets America apart from every other developed country in the 
world. The purpose of the bill is to take a necessary step towards 
platform parity so that any service that plays music pays those who 
create and own the recordings--just as satellite, cable, and internet 
radio stations currently do.
  I understand that this legislation raises some difficult political 
issues. Several people have expressed some very legitimate concerns--
like the need to accommodate small broadcasters, the possibility of 
jeopardizing the revenues earned by songwriters and music publishers, 
or expanding the scope of the law governing music played in restaurants 
and other public venues. So let me begin by clarifying how we have 
narrowly tailored this legislation--
  (1) The bill repeals the current broadcaster exemption--but it does 
not apply to bars, restaurants and other venues, or expand copyright 
protection in any other way.
  (2) The bill provides an accommodation of protection for small and 
non-commercial broadcasters by setting a low flat annual fee with no 
negotiation, litigation or arbitration expenses. Nearly 77 percent of 
existing broadcasting stations in this country--including college 
stations and public broadcasters--will pay only a nominal flat fee, 
rather than having to pay a percentage of their revenues as royalties.
  (3) The bill extends copyright protection to artists, musicians, and 
the sound recording labels--it does not harm or adversely affect the 
revenues rightfully paid to songwriters and other existing copyright 
owners.
  For over 20 years I have been convinced that fairness mandates that 
all those in the creative chain from the artist, musicians and others 
who bring the recording to life--get compensated for the way they 
enrich our lives. The U.S. is the only developed country in the world 
that does not require privately owned over-the-air radio stations to 
compensate those performers who create the music that broadcasters use 
to attract the audience that generate their ad revenues. Because of 
music, radio is able to profit. Not compensating those who create the 
music is unfair and ultimately harmful to music creation that benefits 
everyone--including the broadcasters. Furthermore, the law requires all 
other platforms in the U.S., including satellite and Internet radio, to 
compensate the copyright owner.
  Songwriters and music publishers rightly do get paid when their song 
is played on the radio, but the artist whose voice or musical talent 
brings in the ad revenue for the station never receives a penny from 
the station. That means that under existing law, when you hear ``White 
Christmas'' on the radio this holiday season, the estate of Irving 
Berlin will get paid for the words and music that he wrote. But the 
estate of Bing Crosby will not--even though it is the tone and texture 
of his voice that symbolizes Christmas for so many. This disparity 
makes no sense. Therefore, in an effort to begin the journey towards 
parity among platforms and fairness to artists, the bill as introduced 
will affect three areas where there is currently disparate treatment:
  Platform parity--Never in the past have there been more engaging 
technological platforms which offer music to consumers at almost any 
time, in any format. Especially with the roll-out of HD, ``hybrid 
digital,'' radio which will provide greater choice, it becomes harder 
to justify an exemption for any one platform. Both the radio station, 
regardless of the platform, and the performer benefit from the playing 
of music over the air. But only one party, the station, gets to keep 
the revenue it generates. While stations use music to get their ad 
revenue, they gladly leave others to pay the artist for another use of 
the music. It is certainly true that on all platforms there are 
differing degrees of promotion that may benefit the artist. That is why 
the Copyright Royalty Board takes into consideration any promotional 
element and adjusts the compensation to the artist appropriately.
  While calling the performance right a ``tax'' might make for good 
rhetoric, it is also good rhetoric to call it ``corporate welfare'' 
when the U.S. Code compels copyright owners, artists, and musicians to 
give broadcasters their music for free. It is simply time to eliminate 
this anachronistic and unjustified subsidy.
  International parity--During a recent meeting in Nashville President 
Bush was asked about this issue. When he was told that broadcasters in 
every country in the world except for China, Iran, North Korea, and 
Rwanda pay a performance right, he rightfully observed, ``it sounds 
like we're keeping interesting company.''
  Because America does not have an adequate performance right, our own 
artists and musicians cannot receive royalties when their music is 
played on radio stations outside the U.S. In many countries between 20-
50 percent of the music played abroad is ``American-made'' and because 
of the lack of reciprocity, we are denying our performers millions of 
dollars in revenue.
  Rights parity--Songwriters have long been compensated for the songs 
that are played on the radio--as they should be. However, just as there 
would be nothing for musicians to play without notes, and nothing for 
the artist to sing without the words, there is also nothing for a DJ to 
play without a recorded song.
  Our kids know the song ``Breakaway'' because Kelly Clarkson recorded 
it--but few know that it was written by Avril Lavigne. Does it make 
sense for Lavigne to get paid but for Clarkson not to get paid? The 
fact that Patsy Clines' estate is not compensated for over-the-air 
performances of her singing ``Crazy'' seems crazy. Shouldn't performers 
be paid as well?
  One of America's greatest treasures is its intellectual property. In 
cities and towns across the Nation and in countries around the world, 
American music is heard throughout the streets. People are consuming 
more music than ever. Yet the music industry is in crisis. The total 
value for the music industry at retail declined from $14.5 billion in 
1999 to $11.5 billion in 2006. So, any claim that radio should get a 
free ride because so-called ``free airplay'' contributes to record 
sales just isn't true. Record sales have fallen 18 percent since 2000.
  In 1995 Congress took a step forward and established a limited 
performance right for digital sound recordings. Yet, the performance 
right Congress created with one hand was taken away with other, by 
exempting all terrestrial broadcasts.
  Cable, satellite, and Internet radio services are granted a statutory 
license to broadcast music as long as they pay the defined fee 
determined by the Copyright Royalty Board. This bill extends the 
statutory licensing requirement to terrestrial broadcasters to avoid an 
unfair advantage. I do note however, that as we discuss reform of the 
section 114 license--other issues will likely arise such as, the 
standard to be used in determining royalty rates, the sound recording 
complement, and treatment of ephemeral copies.
  We are fortunate that with the evolution of new technologies there 
are many legal music distribution services currently available. Cable, 
Internet, and satellite platform providers all compete to provide 
consumers their choice of music, anytime, in any place, in any format.

[[Page 36448]]

While I am encouraged by the many options, I am concerned that the 
government seems to be giving preference to one platform over the 
others by exempting over-the-air broadcasters from compensating owners 
of the music which they use to grow their business. This bill seeks the 
appropriate balance between promoting the creativity of music and 
fostering innovation. Following is a section-by-section summary of the 
legislation:
     Section 1. Short title
       This Act may be cited as the ``Performance Rights Act.''
     Section 2. Equitable treatment for terrestrial broadcasts
       This section repeals the exemption for terrestrial 
     broadcasters and makes conforming changes by deleting 
     references to the word ``digital'' from the types of audio 
     transmissions that are subject to a performance right. With 
     these changes, all terrestrial (over-the-air) broadcast 
     transmissions, including analog audio transmissions, would be 
     subject to sound recording performance rights thereby 
     providing parity for the technologies currently covered under 
     the section 114 license.
     Section 3. Special treatment for small and noncommercial 
         Public Broadcasting stations; and religious stations and 
         certain uses
       This section would create an accommodation for certain 
     qualifying broadcasters from the negotiation and arbitrated 
     rate-setting. Instead, such broadcasters would pay a 
     prescribed flat fee or would retain their current exemption.
       For small broadcasters who make revenue less than $1.25 
     million and therefore are concerned about the uncertainty of 
     the rate and the impact on the growth and viability of their 
     business--this section sets a flat annual royalty fee of 
     $5,000 per year for any individual station (even those part 
     of a larger radio network) with no litigation, negotiation, 
     arbitration, royalty board proceeding or licensing costs.
       Furthermore, for non-commercial/public broadcast stations 
     (irrespective of size) the rate is capped at $1,000 per year 
     per station.
       Finally, for those stations that broadcast religious 
     services or make ``incidental use of musical sound 
     recordings'' such as brief musical transitions in and out of 
     commercials or program segments, or brief performances during 
     news, talk and sports programming there is an outright 
     exemption.
     Section 4. Availability of per program license
       This section allows terrestrial radio stations to obtain 
     program licenses for sound recordings (at separately set 
     rates), in lieu of blanket licenses. In some cases, a radio 
     station may not make many featured uses of music, for example 
     a mixed-format station. In such cases, rather than requiring 
     a station to pay a general blanket license fee in the same 
     amount paid by a station that primarily makes featured uses 
     of music, this section requires the Copyright Royalty Board 
     to establish a ``per program license'' so that such stations 
     can choose only to pay for the music they use, which may be 
     less costly than the general blanket license. This parallels 
     the licenses offered by the performance rights organizations 
     for performing the underlying musical copyright.
     Section 5. No harmful effects on songwriters
       Finally, this section protects the songwriters from the 
     impact of providing this new performance right. In the first 
     instance, the bill adopts the songwriters' suggestion to 
     remove the prefatory language which merely expressed ``the 
     intent of Congress'' not to diminish the royalties of the 
     songwriters. Furthermore, it includes the express indication 
     that nothing in the Act shall adversely affect the royalties 
     to songwriters.

  I do not want to suggest that this bill is a ``perfect'' solution. 
But it is an appropriate starting place. I know there are other parts 
of section 114 that need to be reformed as well, and therefore will 
begin to examine additional provisions in the coming months. 
Furthermore, I remain open to suggestions for amending the language to 
improve its efficacy or rectify any unintended consequences.
  This bill attempts to strike a balance between providing adequate 
protection to our musicians and artists and continuing to support new 
innovative technologies. My goal is to preserve the legitimate 
marketplace by providing a technology neutral structure or at least one 
with parity for all services that appropriately pay for the music. I 
hope the parties can work together to reach further consensus on how to 
achieve parity between technologies and provide rightful compensation 
to our artists and musicians.
  We hope that with introduction of this companion bill in the House to 
the Performance Rights Act in the Senate, Congress will act quickly to 
level the playing field between technologies and ensure rightful 
compensation to performers.

                          ____________________