Fair Play Fair Pay Act Likely To Get Much House Judiciary Copyright Attention but Passage is Called Questionable

The Fair Play Fair Pay Act (HR-1733) is likely to play a major role in the House Judiciary Committee’s ongoing copyright law review, but its chances of success past the committee level remain questionable despite a push to neutralize arguments against the bill, industry lawyers told us. House Judiciary IP Subcommittee ranking member Jerrold Nadler, D-N.Y., and Rep. Marsha Blackburn, R-Tenn., introduced the bill Monday (see 1504130056). HR-1733 would require most terrestrial radio stations to begin paying performance royalties and would require digital broadcasters to begin paying royalties for pre-1972 sound recordings. The bill would also require satellite broadcasters to pay royalties at market rates.

“I think there’s substantial support” in House Judiciary for HR-1733 “but we’re just starting” to make a case for the bill, Nadler told us. HR-1733 has already garnered “wall-to-wall support” from the “quite fractious” music industry, “which wasn’t at all clear last year,” he said. Members of the Recording Academy, one of HR-1733’s major backers, planned 75 meetings with members of Congress Thursday to lobby for the bill and other music industry issues, said President Neil Portnow during the group’s Grammys on The Hill awards event Wednesday. The Recording Academy presented awards to Nadler and House Judiciary Committee Chairman Bob Goodlatte, R-Va., for their legislative work on industry issues.

HR-1733’s carve-outs, which would cap royalties at a maximum of $500 per year for stations with less than $1 million in annual revenue and $100 per year for college stations, “really takes broadcasters’ main argument against this off the table,” Nadler said. NAB members “are united in opposition to this bill regardless of the carve-out,” an NAB spokesman said. “Our expectation is that the giant record labels would try to lift that $500 cap as soon as it becomes law.”

HR-1733 has a better chance as part of House Judiciary’s overall copyright review work, “particularly if it’s packaged with other things that it’s more difficult for members to object to,” Fletcher Heald lawyer Kevin Goldberg said in an interview. High levels of support for the Local Radio Freedom Act (House Concurrent Resolution 17/Senate Concurrent Resolution 4) “has typically been a pretty good harbinger of whether a performance rights bill was going to pass,” but it’s possible that supporters of H.Con.Res.-17/S.Con.Res.-4 who look at HR-1733 in conjunction with other House Judiciary copyright legislation “might have to be a little more sympathetic to this,” Goldberg said. HR-1733’s carve-outs may also make the bill more palatable to H.Con.Res. 17/S.Con.Res. 4 supporters, he said. NAB said Wednesday that H.Con.Res. 17/S.Con.Res. 4 had 154 co-sponsors in the House and 13 in the Senate (see 1504150031).

Goodlatte didn’t directly address HR-1733 during a speech Wednesday at the Recording Academy event but said House Judiciary’s copyright work should ensure that IP rights “should be protected and should be fairly distributed amongst all the great performers and writers and creators who make this wonderful work.” House Judiciary’s copyright law review includes “many areas that need work” and “need to be modernized in a way that protect your intellectual property rights,” Goodlatte said.

Nadler’s status as ranking member of House Judiciary’s IP Subcommittee and “that the subcommittee is going to be given a lot of authority over intellectual property matters” likely means HR-1733 will rank “pretty high” among House Judiciary’s copyright priorities, Goldberg said. That also means HR-1733 would be likely to clear both the IP Subcommittee and House Judiciary, “but the question is whether it can get through the House or even the Senate,” Goldberg said. Music licensing issues are part of the “grab-bag” of issues that House Judiciary is exploring in its copyright law review, which likely “changes the dynamic” of the debate on HR-1733 to a slight degree, said Mitch Stoltz, an Electronic Frontier Foundation staff attorney who focuses on IP issues. Still, “at its core it’s an old fight” and that’s likely to mean that the dynamics of the debate haven’t shifted enough to substantially improve HR-1733’s chances of passage, Stoltz said. “Broadcasters still have a lot of political influence,” he said.