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The Internet Radio Fairness Coalition Launches

Pandora and iHeartRadio are on the same team here

Internet Radio Fairness Coalition
Organizations ranging from Internet radio services to broadcast companies have joined to form the Internet Radio Fairness Coalition and to urge Congress to support the Internet Radio Fairness Act of 2012.

The coalition supports this legislation because they believe it will help to foster what they describe as a “sustainable business model” for the 21st century age of digital music (including both Internet and satellite radio) by creating a single standard for royalties. The current royalty system is overseen by the Copyright Royalty Board and divides digital music into Internet and satellite radio, and the coalition claims that this system does not support artists and record labels, nor does it encourage entrepreneurs to invest in the development of new methods of music delivery.

The coalition brings together some traditional competitors and puts them on the same team in a way. Clear Channel Media & Entertainment, which runs iHeartRadio, and its new media competitor Pandora are both founding members; and the announcement placed quotes from Clear Channel CEO Bob Pittman next to comments by Pandora founder Tim Westergren. 

The bills, H.R.6480 and S.3609, were introduced by Reps. Jason Chaffetz (R-UT), Jared Polis (D-CO), Darrell Issa (R-CA), and Zoe Lofgren (D-CA) in the House and Sen. Ron Wyden (D-OR) in the Senate. If the legislation passes, the CRB would not only have one standard for both Internet and satellite radio, it would aslso provide for presidential nomination and Senate confirmation for the board’s judges and create a forum for artists and labels to negotiate royalty rates outside the CRB.

Michael Petricone, senior vice president of government and regulatory affairs at the Consumer Electronics Association went so far as to call the current royalty rates for Internet radio discriminatory, saying that a new standard will promote a healthier digital music industry.