Pandora’s own Tim Westergren took to the blogosphere on Friday to urge support for a new performance royalty reform bill freshly introduced to Congress: Representative Jason Chaffetz’s (R-UT) Internet Radio Fairness Act.
The proposed law would correct an “unfair royalty system that forces us to pay massive licensing costs,” the founder of the music streaming service says on his explainer video. Internet radio is subject to a “discriminatory standard,” the blog post continues:
The resulting bias is staggering. To give you an idea, last year Pandora paid about half of all its revenue in performance fees alone. In that same year, SiriusXM paid 7.5%. No radio service anywhere in the world pays more than 15% of its revenue in such royalties. The anti-internet bias in federal law is nothing short of absurd.
So IRFA (HR 6480) would put Internet radio under the so-called ”801(b) standard.” 801(b) is a section of the Copyright Act used to determine performance royalty rates for satellite radio and cable. The expectation is that this would result in much lower rates than the controversial percentages that have been established by various panels of copyright judges as per current law.
Observers have been expecting Chaffetz’s bill to jump out of the box for about a month. It is co-sponsored by Jared Polis (D-CO) and Senator Ron Wyden (D-OR).
Hopefully this legislation will have a better shot at passing than Rep. Jerry Nadler’s (D-NY) rather weird proposed royalty bill, which would redress the fact that over-the-air radio stations don’t pay performance royalties by jacking up their web simulcast fees.