Introduction of the Fair Play Fair Pay Act of 2015

Floor Speech

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Mr. Speaker, this is an amazing time for everyone who loves music. We have more ways to listen, incredible new paths to discover new artists, and ``anytime anywhere'' access to almost any type of music. Just as television has moved from a homogenized three-network world to the dynamic multi-platform competition of today--bringing us better and more varied programs than anyone could have imagined just a decade ago--radio has done the same. New digital services offer a dizzying area of choices and stations, and are pushing traditional AM/FM to innovate and break new ground as well.

But the rules governing radio music haven't kept up with the times. After decades of legislative stopgaps, special interest exceptions, and congressional gridlock, radio businesses today operate under an absurd patchwork of inconsistent royalty standards and licensing rules. The result is a serious distortion of the economics of the radio business that artificially props up some services, and tilts the playing field
steeply against others. And more than anything--it massively shortchanges artists and other music creators who, to this day, get paid nothing when their performances are aired on AM/FM radio.

Today in your dashboard you might have an AM/FM radio, a SiriusXM receiver, and an online link to Pandora. If you hear a song on Pandora, the artist and his or her accompanying musicians get a decent royalty, since Internet radio is governed by a fair market value royalty standard. However, if you hit a different button and hear the exact same recording on SiriusXM, the artist gets a much smaller royalty for
the exact same song, because satellite radio pays below market royalties thanks to a 15 year old ``grandfathered'' exception from the normal royalty standard. If you tune in on AM/FM, the artist gets nothing for the same performance. Not a cent.

And if you click over to a song recorded before February 15, 1972, some of the biggest and most successful digital services have ceased paying royalties to older musicians, many of whom are past their working years and have no other way to make ends meet.

In the end, everybody loses under this chaotic system. Radio services are forced to compete in an unfair and distorted market that props up the oldest broadcast technology at the expense of innovative new services. How is it fair that companies like Pandora and SiriusXM, who pay royalties on all (post-1972) music, must compete against big radio conglomerates that don't pay any royalties on most of the music they use? Even within the digital space, Pandora has loudly--and rightly--complained that its competitor SiriusXM pays royalties that are much lower based on totally arbitrary government decisions.

The Fair Play Fair Pay Act, which I am honored to introduce today along with my colleagues Congressmen Marsha Blackburn (R-TN), John Conyers, Jr. (D-MI) and Ted Deutch (D-FL), corrects this unfair and illogical system. It harmonizes the rules for licensing of sound recordings across all platforms and establishes a simple,fundamental principle for the radio business: Fair pay for all artists on all platforms. At the same time, it protects truly small, local, and non-commercial AM/FM radio stations by ensuring that their royalties are affordable, capped at $500 a year for stations with revenue below $1 million a year and at $100 a year for noncommercial broadcasters.

It sets down a clear marker on the need to resolve the dispute over pre-72 music--making clear what should already have been obvious, that all music has value and all who create it should be paid regardless of age. The courts have begun the process of protecting the rights of older artists under state law. In the meantime, the provision in this bill can serve as a placeholder as we continue to monitor those developments, and work toward a long term solution that benefits all stakeholders.

The bill also addresses the distribution of royalties, codifying industry practices that simplify the allocation of royalties to music producers and engineers. And it requires direct pay in direct licensing deals for music that is eligible for the existing statutory license. We are aware that there are ongoing discussions about direct pay for
direct licensing, and the final provisions of the bill on this point will be informed by those discussions and by our commitment to protecting the rights and equities of all music creators, artists, independent labels, and majors.

And it includes a concrete and enforceable protection for songwriters--stating in unambiguous terms that the changes made by this law cannot be used to lower or reduce songwriting royalties in any way.

It is a great time for music lovers today--but if we don't fix the corrosive distortions that are eating away at the core of the radio business that won't be true forever. Artists already struggling with the steep decline in album sales will find it more and more difficult to make a living. Music as a career path will be closed off to many--and if that happens we all lose.

We look forward to working with our colleagues on both sides of the aisle in the House and Senate to consider this legislation and pass it into law.

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