Music Licensing Legislation Seen Still in Negotiations

House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., and Rep. Doug Collins, R-Ga., told us they're remaining very active in developing music licensing legislation but were still collecting stakeholders’ input before filing bills. “Stay tuned,” Collins said. “We’ve got some good stuff that we’re putting together right now.” Collins previously sponsored the Songwriter Equity Act, which would revamp Copyright Act sections 114 and 115 to allow the Copyright Royalty Board to consider “all relevant evidence” when determining royalty rates and would change the rate standard for mechanical royalties (see 1503040063).

Blackburn said her staff is meeting with industry groups and monitoring those groups’ discussions on legislation. “We’re going to see what they come forward with” and then file bills, she told us. Blackburn and House IP Subcommittee ranking member Jerrold Nadler, D-N.Y., were the lead sponsors last Congress of the Fair Play Fair Pay Act, which proposed the terrestrial performance right (see 1504160050 and 1605110059).

Lobbyists noted continued engagement with Nadler, House IP Subcommittee Chairman Darrell Issa, R-Calif., and Rep. Ted Deutch, D-Fla., among others. There doesn’t appear to be a clear timeline for a music licensing bill’s introduction, but Recording Academy Chief Industry, Government and Member Relations Officer Daryl Friedman said he would anticipate the bills’ sponsors may seek to file around the time of the industry group’s Washington, D.C.-centric events to increase visibility. The Recording Academy’s D.C. events include the April 5-6 Grammys on The Hill awards and lobbying event and the group members’ coordinated fall Capitol Hill lobbying trip.

“Everybody is gearing up on music licensing reform” given Goodlatte’s continued interest in pursuing legislation despite perceptions that possibilities for compromise are limited, said a music industry lobbyist. “Everybody still needs to flesh out the incredible conflicts” among the music industry, broadcasters and the tech sector over music legislation, the expert added, since those camps all have “very different music licensing agendas.” Targeted legislation is likely an easier sell because former Register of Copyrights Maria Pallante, the main government champion of an omnibus music licensing bill, is now part of the private sector, the industry lobbyist said. Pallante became president of the Association of American Publishers in January, months after Librarian of Congress Carla Hayden ousted Pallante as head of the Copyright Office (see 1610210061 and 1610240052 and 1701120027).

Whither Compromise?

Nashville Songwriters Association International Executive Director Bart Herbison said he's concentrating on pushing proposals on which compromise is possible, since this Congress will be the last in which Goodlatte will lead House Judiciary, under traditional tenure practices.

“From Day One" of House Judiciary’s copyright law review, "this has always been about the art of the achievable,” Herbison said. “There is a broad spectrum of interests” involved in music licensing and other copyright issues and “when it gets right down to it, you have to look at the circumstances at hand and see” where movement is possible, he said. Stakeholders have presented Goodlatte with a “range of possibilities” for music licensing legislation and they now need to determine “what is passable and what’s not” in the current political climate, Herbison said. In the previous two Congresses, the focus “has been on policy but now you have to consider politics.”

The Recording Academy will continue to urge that legislation create a terrestrial performance right and address other performance rights issues, Friedman said. “If you’re going to address anything in copyright, then you have to fix that outlier first,” he said. “We perceive interest from [the administration of President Donald Trump] in repatriating Americans’ offshore earnings back to the U.S. and ensuring regulations don’t burden industries. Those are two issues that very cleanly intersect with performance rights.” Those White House priorities and “the fact that [Goodlatte] is in the last two years of his chairmanship make us bullish that there will be action” on performance rights during this Congress, Friedman said.

MusicFIRST Coalition Executive Director Chris Israel said he doesn’t believe “there’s been a closing of the door” on any music licensing issue at this point. “I think you can expect to see continued conversations” on the terrestrial performance right proposal, performance royalties for pre-1972 sound recordings and rate parity, he said. “We’ve always been open to opportunities to sit down with the broadcasters and other stakeholders and have a conversation. It’s hard to really speculate on compromise before you have that conversation but the starting point for us is always to keep all issues on the table.”

“I just can’t imagine” that music licensing legislation “wouldn’t address performance rights issues,” said music industry lawyer Chris Castle. “There is some question” about lawmakers’ willingness to continue pursuing the controversial terrestrial performance right issue, he noted, “but I just can’t imagine that they’re going to get the kind of stakeholder support that they would need to get anything through if they don’t deal with that.” The early reintroduction (see 1701250034) of the broadcaster-backed Local Radio Freedom Act (House Concurrent Resolution 13/Senate Concurrent Resolution 6) got the attention of the music industry but the perception remains that most legislators aren’t fully aware of the bill’s underlying aim in opposing the terrestrial performance right, Castle said. Music licensing interests viewed the resolution as aimed at scuttling attempts to advance the Fair Play Fair Pay Act and other music licensing legislation (see 1504160050 and 1605110059).

DOJ Factor

Castle and others pointed to the multipronged challenge to the DOJ Antitrust Division's controversial decision in its review of the American Society of Composers, Authors and Publishers and Broadcast Music Inc. consent decrees as an ongoing factor in developing legislation. Justice is expected to file its opening brief by May 18 in its appeal to the 2nd U.S. Circuit Court of Appeals of District Judge Louis Stanton’s ruling in New York overturning the 100 percent licensing language (see 1611140065). Meanwhile, Songwriters of North America is pushing forward with its lawsuit against DOJ in the U.S. District Court in Washington over the finding (see 1702090058). Further developments in the SONA case are expected this week.

“From the moment we learned” that DOJ’s concluding statement in the review would include language saying the department continues to believe the consent decrees mandate 100 percent licensing, “that has guided conversations about what to do in terms of legislation,” Herbison said. There's already a sense under the Trump administration that there’s a “whole different climate” on the consent decrees issue that could signal a shift away from the 100 percent licensing language, but the process will still need to play out before the issue becomes a legislative non-factor, Herbison said.

The furor over DOJ’s finding brought new music licensing stakeholders into the legislative fray. Texas Music Office Director Brendon Anthony said he met with lawmakers last month as an “overview follow-up” to Texas Gov. Greg Abbott’s August letter to the DOJ urging the department to reconsider its consent decrees decision (see 1608300058). “We can’t always weigh in on issues that are being wrangled over here” as Abbott did on the DOJ issue “but we do want to be considered because we do represent a large portion that folks up here are trying to protect,” Anthony said. “We want to leave all options on the table.”