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Performance Rights Act Passes House Subcom

NAB plays down the vote, saying it’s not a surprise.

A subcommittee of the House Judiciary Committee this week passed a measure to make U.S. radio broadcasters pay performance royalties.

The vote was not a surprise, according to NAB spokesman Dennis Wharton, given the subcommittee’s “history of support for the RIAA-backed tax on local radio stations.”

A majority of House members oppose the measure, he said, and “question whether a punitive fee on America’s hometown radio stations should be used to bail out the failing business model of foreign-owned record labels.”

Supporters of H.R. 4789, sponsored by Rep. Howard Berman, D-Calif., such as musicFirst, a coalition of performers, applauded the action,but said the effort has a long way to go.

“A loophole in the law lets AM and FM music radio stations earn $16 billion a year in advertising revenue without compensating the artists and musicians who bring music to life and listeners’ ears to the radio dial. It’s not right, it’s not fair and we are going to make sure it is changed,” said musicFirst in a statement.

Supporters of the bill say other music platforms — satellite radio, Internet webcasts and cable television music stations — pay artists and musicians to use their music.

Radio, in turn, says it does pay for its music, to ASCAP, BMI and SESAC. Enactment of the legislation, broadcasters argue, would mean radio stations would pay a total of $3 billion to $7 billion a year more in fees, resulting in layoffs and less diversity in programming and station ownership.

The measure now goes to the full committee.

Of a Senate companion bill, sponsor Senate Judiciary Chairman Patrick Leahy, D-Vt., said he hoped the committee could turn its attention to the issue before the end of the year.

It was a week that heard rhetoric on the issue escalate; musicFirst sent its third in a series of “gifts” to NAB, a red herring, “to make the point that corporate radio’s promotion argument is nothing more than a distraction.” It earlier had sent a dictionary “to help corporate radio understand that a fair performance royalty is not a tax” and songs on iTunes.

Wharton of NAB said the latest gag was “so lame it barely warrants a response” but replied, “Instead of sending fish to radio stations that advanced the careers of artists, RIAA should send food to the entertainers that foreign record labels have abused for decades.” He pointed to lawsuits brought by musicians against record labels for back royalties.

Online debate also ensued this week after a musicFirst spokesman was quoted in a Wired blog comparing the broadcast of music without payment as “a form of piracy, if you will, but not in the classic sense as we think of it.”