[Congressional Record (Bound Edition), Volume 161 (2015), Part 4]
[Extensions of Remarks]
[Page 4857]
[From the U.S. Government Publishing Office, www.gpo.gov]




           INTRODUCTION OF THE FAIR PLAY FAIR PAY ACT OF 2015

                                  _____
                                 

                          HON. JERROLD NADLER

                              of new york

                    in the house of representatives

                         Monday, April 13, 2015

  Mr. NADLER. Mr. Speaker, this is an amazing time for everyone who 
loves music. We have more ways to listen, incredible new paths to 
discover new artists, and ``anytime anywhere'' access to almost any 
type of music. Just as television has moved from a homogenized three-
network world to the dynamic multi-platform competition of today--
bringing us better and more varied programs than anyone could have 
imagined just a decade ago--radio has done the same. New digital 
services offer a dizzying area of choices and stations, and are pushing 
traditional AM/FM to innovate and break new ground as well.
  But the rules governing radio music haven't kept up with the times. 
After decades of legislative stopgaps, special interest exceptions, and 
congressional gridlock, radio businesses today operate under an absurd 
patchwork of inconsistent royalty standards and licensing rules. The 
result is a serious distortion of the economics of the radio business 
that artificially props up some services, and tilts the playing field 
steeply against others. And more than anything--it massively 
shortchanges artists and other music creators who, to this day, get 
paid nothing when their performances are aired on AM/FM radio.
  Today in your dashboard you might have an AM/FM radio, a SiriusXM 
receiver, and an online link to Pandora. If you hear a song on Pandora, 
the artist and his or her accompanying musicians get a decent royalty, 
since Internet radio is governed by a fair market value royalty 
standard. However, if you hit a different button and hear the exact 
same recording on SiriusXM, the artist gets a much smaller royalty for 
the exact same song, because satellite radio pays below market 
royalties thanks to a 15 year old ``grandfathered'' exception from the 
normal royalty standard. If you tune in on AM/FM, the artist gets 
nothing for the same performance. Not a cent.
  And if you click over to a song recorded before February 15, 1972, 
some of the biggest and most successful digital services have ceased 
paying royalties to older musicians, many of whom are past their 
working years and have no other way to make ends meet.
  In the end, everybody loses under this chaotic system. Radio services 
are forced to compete in an unfair and distorted market that props up 
the oldest broadcast technology at the expense of innovative new 
services. How is it fair that companies like Pandora and SiriusXM, who 
pay royalties on all (post-1972) music, must compete against big radio 
conglomerates that don't pay any royalties on most of the music they 
use? Even within the digital space, Pandora has loudly--and rightly--
complained that its competitor SiriusXM pays royalties that are much 
lower based on totally arbitrary government decisions.
  The Fair Play Fair Pay Act, which I am honored to introduce today 
along with my colleagues Congressmen Marsha Blackburn (R-TN), John 
Conyers, Jr. (D-MI) and Ted Deutch (D-FL), corrects this unfair and 
illogical system. It harmonizes the rules for licensing of sound 
recordings across all platforms and establishes a simple, fundamental 
principle for the radio business: Fair pay for all artists on all 
platforms. At the same time, it protects truly small, local, and non-
commercial AM/FM radio stations by ensuring that their royalties are 
affordable, capped at $500 a year for stations with revenue below $1 
million a year and at $100 a year for noncommercial broadcasters.
  It sets down a clear marker on the need to resolve the dispute over 
pre-72 music--making clear what should already have been obvious, that 
all music has value and all who create it should be paid regardless of 
age. The courts have begun the process of protecting the rights of 
older artists under state law. In the meantime, the provision in this 
bill can serve as a placeholder as we continue to monitor those 
developments, and work toward a long term solution that benefits all 
stakeholders.
  The bill also addresses the distribution of royalties, codifying 
industry practices that simplify the allocation of royalties to music 
producers and engineers. And it requires direct pay in direct licensing 
deals for music that is eligible for the existing statutory license. We 
are aware that there are ongoing discussions about direct pay for 
direct licensing, and the final provisions of the bill on this point 
will be informed by those discussions and by our commitment to 
protecting the rights and equities of all music creators, artists, 
independent labels, and majors.
  And it includes a concrete and enforceable protection for 
songwriters--stating in unambiguous terms that the changes made by this 
law cannot be used to lower or reduce songwriting royalties in any way.
  It is a great time for music lovers today--but if we don't fix the 
corrosive distortions that are eating away at the core of the radio 
business that won't be true forever. Artists already struggling with 
the steep decline in album sales will find it more and more difficult 
to make a living. Music as a career path will be closed off to many--
and if that happens we all lose.
  We look forward to working with our colleagues on both sides of the 
aisle in the House and Senate to consider this legislation and pass it 
into law.

                          ____________________