Performance Rights Act Headed to House

The House Judiciary Committee voted 21-9 on Wednesday (May 13) to send the Performance Rights Act to the full House for a vote. After a contentious three-hour hearing in which three amendments to the bill were offered, only one of the amendments–which reduced the fees to small broadcasters–was embraced.
 
In a surprise move welcomed by broadcasters, Rep. Maxine Waters (D-Calif.) showed her support for broadcasters and against H.R. 848. She acknowledged that she had been heavily lobbied by broadcasters as recently as Tuesday night (May 12), receiving phone calls from Salem Christian talk KKLA/Los Angeles, among other stations. She was concerned about the financial impact on broadcasters in general and minority broadcasters in particular. Waters was in favor of one amendment offered by fellow Californian Daniel Lungren (R) that sought to delay voting on the Act by six months while a study on the economic impact of the measure was conducted. That proposal, along with another by Ted Poe (R-Texas), was shot down by a majority vote against them by the committee.
 
Rep. Howard Coble (R-N.C.), who last year backed the bill for performance royalties, said he moved toward broadcasters this time around, concerned about their financial well-being.
 
“I have sweethearts on both sides–broadcasters I love and performers I love,” Coble said, explaining how tough a decision this bill is for him. The veteran legislator struck a human chord with many on the panel who are struggling with making a choice they’d rather not be forced to make.
 
Even committee chairman John Conyers said he understood what it meant to be pulled by both sides. He added that Coble “expresses the sentiments of many of us.”
 
“We were pleasantly surprised by the considerable bipartisan opposition to a performance tax, even in a committee where support for the record labels is strongest,” said NAB spokesman Dennis Wharton. “The NAB applauds these nine members for standing with America’s hometown radio stations, their 235 million weekly listeners and the yet-to-break artists who will lose their No. 1 promotional platform if this bill is enacted.”
 
Waters found herself in an odd position, going against the Democratic tide, a move that both surprised and tickled NAB lobbyists in the room because she is not a signer to their Local Radio Freedom Act resolution, which has 192 House signatures and aims to stop the royalty legislation.
 
Waters, who represents the western portion of Los Angeles, including the Inglewood and Hawthorne sections of town, said, “I think we can come up with a solution that does not harm minority broadcasters or religious broadcasters.” She said broadcasters in her district complained that they already pay hundreds of thousands of dollars annually to broadcast recorded music, and she was against increasing their burden. She encouraged the panel to go back and look at the proposed measure and check its impact on already-struggling broadcasters.
 

But Conyers, who began the hearing by acknowledging that he had spent Tuesday evening meeting with people who opposed his bill (he did not name the Rev. Jesse Jackson), said the “manager’s amendment” crafted by him and Rep. Shelia Jackson-Lee (D-Texas) would reduce the royalty fee amounts that would be paid by small broadcasters and delay the dates the fees would begin to be assessed but that it was time for terrestrial radio to begin paying their fair freight and time for artists to be compensated for the work.
 
Rep. Hank Johnson (D-Ga.) told the panel that he was in favor of the measure and recalled some of his grandmother’s mottoes: “If you see someone who needs help, then help” and “If it is not fair, it is not right.” He then added, “What is unfortunate is that we have so many people who spread misinformation on this issue.” He took a direct hit at “Radio One’s Cathy Hughes and her son”–he didn’t name Alfred Liggins specifically but described him as an “able advocate, almost angry advocate, using the 60 stations that they own, and Tom Joyner, whom they employ, to spread misinformation and hysteria, and they are flat-out, dead wrong.” (Radio One actually owns 53 stations.)
 
Rep. Mike Quigly (D-Ill.), the latest arrival to the House, praised performers “who create, from nothing, art. I guarantee you it is worth more than nothing.” He agreed that radio’s promotional value is worth something but couldn’t put a value figure on it.
 
Rep. Brad Sherman (D-Calif.) told the panel, “I think it is time that we pass the manager’s amendment. Newspapers also face tough times, but they have not suggested that they publish copyrighted material without paying for it.” Sherman also pointed out, “There is a promotional value to sports teams, but they still get their rights fees from broadcasters. If there are garage bands that want to announce that radio stations can play their music for free, then there could be radio stations that play only garage-band music.”
 
Before the start of the hearing, Conyers sent a letter to Gene Dodaro, the acting comptroller general at the Government Accountability Office, requesting that “a detailed analysis of economic factors related to enacting performance legislation” be carried out to assist Congress and the Copyright Office’s rate-setting office in “determining the appropriate rate.”
 
During the marathon hearing, Conyers responded to calls to delay the vote on the act by stressing that the legislation is “a work in progress,” and he encouraged the bill’s opponents to help shape the legislation into fair and equitable law, mindful of broadcaster’s current economic hurdles.
 
Rep. Howard Berman, a Democrat who represents the Hollywood section of Los Angeles and who is a longtime strong supporter of the legislation, saw Conyers’ invitation as an opportunity to take a poke at broadcasters who have rejected the measure. “We have invited the NAB to come in and work through the points of the bill. It is not that they are not interested, they are. They have worked very hard against the bill.”
 
But Waters jumped to broadcasters’ defense. “Broadcasters felt they did not have a chance,” she said. “They have felt that too many people work arguing for the entertainment industry. We know that is not true, but….”
 
Berman wrinkled his face, not buying a bit of it. “They did not think they needed to work something out,” he said pointedly. “They thought they could stop this bill in the subcommittee. We invited them to come in and negotiate this, and they would not, and we still invite them to. Come in and talk about it.”
 
Earlier in the discussion, Berman made a wisecrack reference to broadcasters, noting that they’d “rather slit their throat” than negotiate. It is a reference to outgoing NAB chief David Rehr’s line uttered last year that he’d rather slit his throat than negotiate with record labels. It has haunted and hurt the NAB ever since he said it, and legislators who back the royalties bill have not been able to leave the line alone. It has become their battle cry, characterizing what they feel is a flawed lobbying association and flawed approach. The tact appears to be working: Even longtime supporters of broadcasters have begun whispering that the NAB should make an effort to talk with the other side. However, broadcasters argue that they are paying nothing now and they will only lose ground if there is a discussion about rates and fees.
 
After the panel voted to send the measure on to the full House for a vote, Kendall Minter, chairman of the Rhythm & Blues Foundation, told Radio and Records he considered it a major victory for artists. “This is a right that should be uncontested because half of the creators of songs are being compensated–composers. Performers now need to be included.” He said broadcasters “have been enjoying a free ride for the past 80 years, forcing us into being part of, as George Bush called them, ‘the axis of evil.’ Only China, North Korea, Iran and the U.S. do not compensate performers for their work.” He added that by passing the measure into law, American performers will then receive compensation from foreign countries when their works are broadcast on their airwaves because “we’ll have reciprocity with other nations.” He rejects the NAB’s argument that the biggest record labels that will benefit from royalty payments are foreign-owned labels: “Sure, three of the major labels are foreign-owned. But there are thousands of independent labels owned by Americans, and the money will go to American artists.”
 
After the hearing, the Washington bureau of the NAACP thanked Conyers for requesting the GAO study, adding that “while the NAACP believes strongly that artists must be fairly compensated for their work, we are also very sensitive to the questions that have been raised as to the impact this legislation would have on racial and ethnic minority broadcasters. Given the importance these outlets have to our communities, it is clearly imperative that we fully understand the ramifications of all legislative initiatives.”
 
musicFIRST Coalition executive director Jennifer Bendall declared victory of sorts following the hearing: “Our continued momentum in Congress is proof that it’s well past time to recognize the importance of fairly compensating the artists and musicians whose talent and hard work allows radio to generate billions of dollars in ad revenue each year.”