Local Radio Freedom Act Harms Creators and Undermines Intellectual Property

Michi Iljazi

July 7, 2015

Protecting property rights, including intellectual property, is the hallmark of any strong democracy.   Protecting intellectual property includes music artists including the writer and performer, regardless of the medium under which that work is transmitted. Unfortunately, under today’s existing rules, a performer holds no rights to his or her product in terrestrial radio (any radio station received by a signal rather than the Internet).  The Future of Music Coalition summed up the problem artists have been facing regarding performance rights in a recent blog post when they noted that, “Currently, because of an embarrassing quirk in US copyright law, the US is one of only a few countries in the world (the others include Iran and North Korea) that don’t compensate performers when their music is played on the radio.”

Recently introduced H. Con. Res. 17, Supporting the Local Radio Freedom Act (LRFA), codifies the current system that does not adequately protect intellectual property. Keeping the current system is nothing more than cronyism benefitting broadcasters who want nothing more than to keep musicians and artists from getting compensated for their hard work.

Last January, TPA signed a coalition letter urging House Republicans to withhold any support and/or co-sponsorship of LRFA:

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.

Owners of intellectual property should be able to negotiate how they want to be compensated for their work. Recently, Apple and Taylor Swift reached an agreement on the company’s use of the artist’s work for the rollout of their new streaming music subscription service. This is how the free market is supposed to work, people are rewarded for their efforts and able to set their own terms for their hard earned creative output. LRFA stifles those free market principles and codifies a system that prevents creators from negotiating compensation for their work. TPA opposes any efforts to make permanent such a distorted view of the free market.

Tim Lee with the Center for Individual Freedom noted one of the key arguments against the corporate welfare of LRFA, while at the same time defending one of the key components of property rights:

Advocates of LRFA claim that artists have no reason to complain when terrestrial radio plays their works without compensation, since that provides them publicity and free advertising.  But that’s something for artists and broadcasters to freely negotiate, rather than have broadcasters make that decision for them and deprive them of choice in the matter.  Some artists may indeed opt to allow their works to be broadcast for free.

There have been attempts to fix the problems in the Copyright system in order to ensure that creators are compensated in the realm of radio, regardless of who owns the station. Just a few months ago, TPA came out in strong support of H.R. 1733, the “Fair Play Fair Pay Act of 2015” (see the bill here), which 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.). The bill would clarify the Copyright code to make sure artists are compensated for their work and stop legislation like LRFA dead in its tracks.

Intellectual Property continues to be a an important issue in Washington this year, and with Congress back in session this week and the countdown looming before the month-long August recess there is little time to waste on some of these key battles. TPA is hopeful that LRFA will go nowhere, but in order to win the fight for IP on this issue, Congress must go further than just opposing LRFA. However, it is an important first step for creators, supporters of IP, and opponents of cronyism.