Proposed Legislative Changes
Major record labels are urging Congress to pass legislation that would protect their interests over artists interests and limit the way consumers enjoy your music. Often, these attempts come in the form of provisions inserted into bills that are otherwise beneficial to the music industry and seek to reform various practices in the music industry. Two such bills are the Section 115 Reform Act or the SIRA and the Perform Act.
SIRA was introduced in the September 2006. While most of SIRA’s provisions were aimed at improving the process by which online music providers obtain mechanical licenses, it also contained provisions that were bad for consumers and small artists. The bill, if enacted, would have:
prevented consumers from recording music transmitted digitally;
increased royalties for many Internet radio services;
allowed record companies to divert publishing royalties from the musicians to the record companies in order to repay the advances.
SIRA did not pass into law in the last Congress. But a similar bill is likely to be introduced in future.
The Perform Act was introduced in the Senate in January 2007. The purpose of the bill is to eliminate discrimination between existing subscription and satellite radio services and new services in setting rates for the digital performance license. But the bill also contains provisions that would prevent consumers from enjoying music the way they want to. For example, provisions in the bill would only allow consumers to record music from digital radio broadcasts in the sequence in which the program was transmitted. They could not record digital transmissions based on the artist, or album or sound recording. They could not burn the recording to a CD or other portable device. They could not change the sequence of the recording.
The one positive attempt at change in this environment is to require over- the-air broadcasters to pay performance royalties. As we discussed in the sections above, free over-the-air broadcaster are exempted from paying royalties to performers while satellite radio services and Internet radio services have to pay such a royalty. Although many believe that this disparity should be eliminated and over-the-air broadcasters should be required to pay such a royalty, there is considerable opposition from the broadcasters. No concrete legislative proposal has emerged to solve this issue.
