Washington Update
August 2009

NMPA Legislative Priorities 2009

Public Performance in an Audiovisual Download
This is NMPA’s top legislative priority.  Songwriters and composers collect a public performance royalty any time their music is included in a movie, television show, or any audiovisual work.  However, when the audiovisual work is digitally distributed as a download, no public performance royalty is paid.  NMPA is working with ASCAP, BMI, SESAC, NSAI, and SGA to ask Congress to clarify in the law that a musical work public performance royalty should be paid on Audiovisual downloads.  No legislation has been introduced.  

Constitutionality of the Copyright Royalty Board
On October 2, 2008, the Copyright Royalty Board (CRB) ruled that the mechanical rate for physical products (such as CDs) and permanent downloads (such as iTunes) is 9.1 cents with an overtime rate.  The CRB judges established for the first time a rate of 24 cents for each ringtone subject to the Section 115 mechanical license.  The CRB also incorporated the industry settlement establishing rates and terms for interactive streams and limited downloads. Furthermore, music publishers were granted a 1.5 percent late fee, calculated monthly.  After the decision was released, the Recording Industry Association of America (RIAA) appealed the late fee provision and the ring tone rate to the D.C. Court of Appeals, requesting a rehearing from the CRB.  

On July 15, 2009, the CRB denied the RIAA's Motion for Rehearing.  

Additionally, the constitutional standing of the CRB itself has been under attack by a party to the separate webcasting rate proceeding.  On May 13, 2008, Royalty Logic, LLC, filed a supplemental brief with the D.C. Court of Appeals in Intercollegiate Broadcast System v. Copyright Royalty Board asking the court to vacate the CRB's decision in the webcasting rate proceeding based on their argument that the appointment of the Copyright Royalty Judges by the Librarian of Congress is unconstitutional as the appointment violates the Appointments Clause of the Constitution. The RIAA's appeal in the mechanical rate proceeding before the same court was held in abeyance until the constitutionality issue was decided.  

On July 10, 2009, the Court of Appeals declined to rule on the constitutionality question 'on the basis of hasty, inadequate and untimely briefing.'  While the court also expressed an ongoing concern regarding the appointment of the CRB Judges, the court's decision is a sigh of relief for the music industry, preventing what would have certainly been chaos in an already tenuous marketplace, and offering the affected parties a chance to resolve the issue through legislation.   While we are hopeful Congress will address any long term concerns regarding the Copyright Royalty Board, we are pleased the Board's recent rate decision will remain as law.  

Sound Recording Performance Right
On May 13, 2009, the House Judiciary Committee passed the Performance Rights Act, H.R. 848, which creates a public performance right for sound recordings in terrestrial broadcast radio.  The vote was 21-9.  NMPA worked with Congressman John Conyers (D-MI), Chairman of the House Judiciary Committee and sponsor of the Performance Rights Act, and his staff to include important songwriter protection language in the bill, ensuring that songwriters are not harmed in the process of fairly compensating performers and record labels.  The next step is consideration by the full House of Representatives.  The Senate has a similar bill (S. 379) that has not yet been reported out of the Senate Judiciary Committee, but the Senate Judiciary Committee held a hearing on the bill on August 4, 2009.  NMPA will continue to work with the Senate to make sure songwriters are not adversely affected.  

Additionally, legislation opposing the Performance Rights Act has been introduced in the form of a nonbinding resolution, The Local Radio Freedom Act (H.Con.Res 49 and S.Con.Res 14), and currently has 245 cosponsors in the House (which is a majority) and 23 cosponsors in the Senate.  The bill states that Congress should not impose any new sound recording performance fees on local radio stations.  No action has been taken on the bills.  

Digital Radio/Satellite Radio
Senator Feinstein intends to incorporate language harmonizing the different compulsory rate standards in the Performance Rights Act this year.  NMPA has submitted comments and new language that focused on changing 801(b) to reflect the 'fair market value' standard and asked that evidence outside the regulated market be considered in setting the musical work standard.  Senator Feinstein's next steps will be to hold stakeholder round table discussions of the different proposals.  

Piracy and Privacy
The House Government Reform Committee has re-launched its investigation into piracy and privacy issues (such as leaking important government files through file sharing software) and has sent letters to Eric Holder, Attorney General; John Leibowitz, the Chairman of the FTC; and LimeWire. NMPA has been in touch with the Committee staff on this issue.  The Committee held a hearing on this important issue on July 29, 2009.  

Orphan Works
Orphan works legislation passed the Senate in the 110th Congress, and Senator Leahy will push this legislation this Congress.  In the House, Chairman Conyers will be the lead on orphan works legislation, and we have met with Cong. Conyers’ staff to discuss our position on orphan works and to stress that it is very important to include protections for copyright owners.

Anti-Piracy Enforcement
Piracy remains a top priority to the content industry, even though the PRO IP Act was enacted in 2008.  Many compromises were made to pass the bill, so we expect another enforcement bill to be introduced at some point in the 111th Congress to cover all issues that dropped off during negotiations.  We expect that Senator Leahy will continue to push for granting DOJ civil enforcement.

PRO IP Act Appropriations
We are working to secure appropriations to fund the law enforcement provisions in the newly enacted PRO IP Act.