Congress Should Oppose the Local Radio Freedom Act

Michi Iljazi

July 21, 2015

Intellectual Property (IP) is critical to driving our economy forward in a positive way, and one industry where this couldn’t be more applicable is in music. In today’s current landscape, the rules do not afford any rights for a performer to his or her product in terrestrial radio (any radio station received by a signal rather than the Internet). There are some in Congress who want to keep it that way, and the harmful H. Con. Res. 17, Supporting the Local Radio Freedom Act (LRFA), keeps the current system in place, undermining the intellectual property of musical performers. Taxpayers Protection Alliance opposes LRFA and believe it is important to make sure intellectual property is protected, which is why TPA came out in support of H.R. 1733, the “Fair Play Fair Pay Act of 2015” (see the bill here) was introduced in Congress by Reps. Jerrold Nadler (D-N.Y.), Marcia Blackburn (R-Tenn.), John Conyers Jr. (D-Mich.) and Ted Deutch (D-Fla.). This bill would ensure that terrestrial radio stations pay performers when their content is broadcast on air (like satellite and internet radio). TPA signed onto a coalition letter earlier this year opposing LRFA, and we continue to urge lawmakers in Congress to stand against H. Con. Res. 17.

Read the letter below:

January 26, 2015

To Republican Members of the US House of Representatives:

As organizations supporting property rights, we believe that artists who produce music deserve to hold real, effective rights to their products, including both the writer and performer of a given recording. If a given work is transmitted, common sense and basic fairness dictate that the medium of transmission should not affect the existence of these rights. Currently, however, a performer holds no effective rights to his or her product in terrestrial radio.

Last year, H. Con. Res. 16, the Local Radio Freedom Act (LRFA) was introduced in the House. This resolution is a specific endorsement of the current regime, which offers no meaningful property rights to music performers in regard to transmission over terrestrial radio. For this reason we urge you to refrain from co-sponsoring the Local Radio Freedom Act, which sanctions the status quo, and has a chilling effect on the development of a forward-thinking policy that respects the rights of all music producers in all media.

The Constitution protects private property rights and specifically delegates to Congress authority to protect creative works. Unfortunately, LRFA closes the discussion about how best to protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue. This is not equitable treatment for any musical artist or music distribution service.

Supporters of LRFA have argued that requiring terrestrial broadcast stations to pay a performance royalty is akin to a performance tax. This is incorrect; a performance royalty is not a tax. The definition of a tax is the transfer of wealth from a household or business to the government. Royalties go to rights holders, not to the government. It is completely within the rights of broadcasters to decide not to pay for the use of a performer’s song by not using the song. Paying a private citizen or business for the use of their property is clearly not a tax.

Additionally, supporters of LRFA claim that the promotional value artists derive from having their music played on the radio exceeds compensation which would be due under a royalty. However, cable, satellite, and Internet pay a royalty for sound performances. In a free market, some copyright holders might decide to forego royalty payments in return for having their music on the radio. Nonetheless, these decisions should be made by the free market, not the government.

Congress should not preclude a free market approach to royalty payments. We, the undersigned, urge you to refrain from supporting legislation like the Local Radio Freedom Act, and allow the discussion to remain open about how best to protect the rights of both performers and writers in the creation of music.

Sincerely,

Phil Kerpen,, President American Commitment
Jeffrey Mazzella, President, Center for Individual Freedom
Tom Schatz, President, Council For Citizens Against Government Waste
George Landrith, President, Frontiers of Freedom
Andrew Langer, President, Institute for Liberty
Seton Motley, President, Less Government
David Williams, President, Taxpayers Protection Alliance