Freedom Line Blog

Elementary concepts of fairness demand that musical artists and performers remain free to negotiate performance rights with broadcasters that seek to play their songs.  Indeed, current law allows artists to mutually bargain with satellite, Internet and cable stations.

The only exception:  traditional AM-FM radio stations, which are unfairly protected by federal law from having to negotiate with artists for performance rights.  This is precisely the sort of crony capitalism against which the American electorate is increasingly irate.

Unfortunately, rather than advocating market reform, some in Congress wish to cement the current protectionist status quo.  Under the so-called “Local Radio Freedom Act,” whose very name contradicts its real-world effect, terrestrial radio’s unjustifiable exemption from having to negotiate performance rights would be made more permanent.  The bill would foreclose bargained-for negotiation between artists and stations for compensation, perpetuating stations’ ability to earn billions by playing songs without paying for them.  And in an example of of supreme chutzpah, the same traditional radio stations benefiting from that loophole turn around and ask Congress to require cable and satellite providers to pay them for retransmission of television programs of stations they happen to own.

The bill’s proponents advance the offensive claim that artists seeking payment should just shut up and appreciate that their works get played over the air, thereby providing them publicity and advertising.  But that’s not something that stations should dictate.  The creators and performers of those songs should be free to determine which market model they prefer – performance for payment or free of charge.  That’s how a free market works.

Accordingly, we at CFIF have joined an array of fellow free-market organizations in a letter to Congress stating our objections to this protectionist and crony capitalist proposed legislation:

We urge you to refrain from co-sponsoring the Local Radio Freedom Act, which sanctions the status quo, and has a chilling effect on the development of a forward-thinking policy that respects the rights of all music producers in all media.  The Constitution protects private property rights and specifically delegates to Congress the authority to protect creative works.  Unfortunately, LRFA closes the discussion about how to best protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  This is not equitable treatment for any musical artist or music distribution service.”

Americans are justifiably fed up with the sort of protectionism and cronyism that this proposed legislation represents.  We accordingly urge Congress to reject it, and that our hundreds of thousands of supporters and activists across the country to contact their representatives in Congress and express their opposition as well.

Under current law, recording artists remain free to negotiate performance payment rights with Internet, cable and satellite stations.  Due to an unfair exception, however, artists cannot negotiate in the same manner with traditional AM-FM radio.  Unfortunately, proposed federal legislation backed by broadcasting interests would cement that anomaly.  Deceptively entitled the “Local Radio Freedom Act” (“LRFA”), the bill would stifle a potentially freer marketplace and foreclose future negotiation for payment to musicians for songs.

If successful, that would perpetuate terrestrial radio broadcasters’ ability to exploit a legal loophole allowing them to earn billions of dollars by playing songs whose artists would remain uncompensated.  Exacerbating matters, those same terrestrial broadcasters simultaneously ask Congress to require cable and satellite providers to pay them for retransmission of television programming from stations that they own.  That similarly violates straightforward concepts of fairness and intellectual consistency.

This past January, CFIF joined an array of other free-market organizations in a letter to Congress opposing the LRFA and setting forth the policy basis for our objection:

The Constitution protects private property rights and specifically delegates to Congress authority to protect creative works.  Unfortunately, LRFA closes the discussion about how best to protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  That is not equitable treatment for any musical artist or music distribution service.”

Fortunately, there’s a superior alternative also before Congress.

Representative Marsha Blackburn (R – Tennessee), perhaps the most reliable advocate of property rights in Congress, has joined Representatives from both parties in introducing the Fair Play, Fair Pay Act of 2015.  This bill would correct the existing unfairness described above by finally requiring terrestrial broadcasters to negotiate with artists who seek compensation for broadcast of their creative works.

Advocates of LRFA claim that artists have no reason to complain when terrestrial radio plays their works without compensation, since that provides them publicity and free advertising.  But that’s something for artists and broadcasters to freely negotiate, rather than have broadcasters make that decision for them and deprive them of choice in the matter.  Some artists may indeed opt to allow their works to be broadcast for free.  But as Taylor Swift just illustrated in standing up for her rights, other artists have a right to disagree and negotiate payment for those playing their songs.

CFIF believes that property rights, including intellectual property (IP) rights for artists and musicians, must be fiercely defended.  America’s foundation of strong IP protections is one reason we’re the most innovative and artistically productive nation in human history.  Accordingly, we encourage our supporters and activists to contact their representatives, demanding that they reject the dangerous LRFA and support Rep. Blackburn’s PRMA.