The National Association of Broadcasters is ‘grasping at straws’ ...
The National Association of Broadcasters is “grasping at straws” in contending that SoundExchange is violating its charter by financing the MusicFirst Coalition, which is lobbying Congress to require terrestrial radio to pay performance royalties, a SoundExchange spokesman told us.…
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The issue was recently raised in a Wired article, which NAB passed around to the media. The article said SoundExchange is barred from spending collected royalties under the Copyright Act except to administer the royalty program, settle royalty disputes and participate in negotiations or arbitration proceedings, as it just concluded for Internet radio royalties at the Copyright Royalty Board. General Counsel Michael Huppe told Wired that only money from SoundExchange members was going toward MusicFirst, which doesn’t affect its charter, and that the SoundExchange board unanimously approved the expenditure. He couldn’t be reached for comment. An NAB spokesman told us the group isn’t endorsing the article’s claims. “If the story is accurate, it raises some interesting questions about the role of SoundExchange,” he said. Nancy Prager, who represent independent labels in royalty matters, told us: “I don’t think anything in the [regulations] or law prevents them from lobbying at all… There’s nothing in the Copyright Act that says ‘you can’t do this.'” She said National Public Radio’s activities with SaveNetRadio, which is backing the Internet Radio Equality Act, were similar. An NPR spokeswoman said the organization had no connection with SaveNetRadio. NPR’s connection to the new Free Radio Alliance -- which opposes terrestrial performance royalty legislation, and got startup funding from NAB -- is in name only, the spokeswoman said. NPR member stations are careful not to lobby using federal money, she said. The Copyright Office couldn’t provide comment by our deadline on SoundExchange’s spending leeway.