Two bills are back in motion in the U.S. Congress—the AM Radio in Every Vehicle Act, and the American Music Fairness Act (AMFA). As I argued in a post for The Hill last May, if the first bill is to become law, then the second bill should also become law. While the AM radio provision arguably has some public-serving benefits, it is unavoidably a favor to broadcasters—and to pass it without finally delivering long overdue justice for music artists would be unconscionable.
AM Radio in Every Vehicle
The AM Radio in Every Vehicle Act, mandating that all new vehicles include receivers for the AM band, was initially drafted in response to the auto industry signaling a move away from AM radio in new cars. For instance, in electric vehicles (EV), the powertrains interfere with AM radio reception, but even manufacturers of traditional powertrain vehicles were recognizing a downward trend in AM listeners and, therefore, planning to discontinue AM receivers in new sound systems. Thus, Senator Ed Markey (D-MA) and Representative Josh Gottheimer (D-NJ) sponsored the AM Radio in Every Vehicle bills, which gained bipartisan support, albeit along partisan lines.
Republicans emphasized the importance of conservative talk radio while Democrats highlighted the role of AM in the emergency broadcast system and its reach to underserved markets. Make of those rationales what you will (e.g., most people likely get their emergency messaging on their cellphones), but there is no question that AM in Every Vehicle would be a legislative favor to broadcasters, extending the life of terrestrial radio as the market moves toward alternatives like streaming and podcasts. Even if the market eventually abandons the AM band, the bill can serve as a precedent for FM radio, where more drivers listen to music. And that is significant because U.S. broadcasters still do not pay royalties to music artists for terrestrial radio play. That’s where AMFA comes in.
American Music Fairness Act (AMFA)
While the AM Radio bill was reintroduced this week by Rep. Frank Pallone, Jr. (D-NJ), Senators Marsha Blackburn (R-Tenn.), Alex Padilla (D-Calif.), Thom Tillis (R-N.C.), and Cory Booker (D-N.J.) reintroduced AMFA. “The United States is the only democratic country in the world in which artists are not paid for the use of their music on AM and FM radio,” said Senator Blackburn. “This legislation would close an outdated loophole that has allowed corporate broadcasters to take advantage of artists and their songs for decades.”
That’s it in a nutshell. And in a time when bipartisanship is in short supply, one would be hard-pressed to find a Member of Congress who does not agree that radio broadcasters should pay royalties to music artists for their vital contributions to the stations. The broadcasters will oppose AMFA, as they have always opposed royalty legislation, on the basis that 1) they cannot afford the royalties; and/or 2) their promotional value outweighs the royalty value. These claims are overstated, but even if they were not, the AMFA bill answers both. As describe in an older post:
For smaller stations (under $1.5 million/year), the AMFA caps royalties between $10/year to $500/year depending on revenue and status as either a public or private station. For larger stations and networks, rates would be set, as they for the rest of the performance licensing market, by the Copyright Royalty Board (CRB). Under the provisions of AMFA, the CRB must consider station size and revenue when setting rates and must also consider the station’s promotional value to recording artists. It’s hard to imagine how the deal gets more fair than that.
As composers and artists have noted in many contexts, music is more regulated in terms of price than most other products on the market. While radio broadcasters are free to charge what the market will bear for advertising on their networks—and the largest entities earn billions in revenue—the music artists, with AMFA, are asking for a regulated price of more than zero for use of the only product that draws listeners to the stations in the first place. (Or do you listen to radio for the commercials?)
Further, not only should Congress condition passing AM Radio on passing AMFA, but it should set aside the political theater of a little-known resolution called the Local Radio Fairness Act (LRFA). Since at least 2008, this insincere (one might say cynical) never-to-be-passed resolution is akin to a loyalty pledge to the broadcasters, promising not to mandate royalties for musical artists. For instance, last year’s resolution highlighted the unfounded implication that radio play only benefits the artists rather than the honest assessment expressed in AMFA that the benefits are at least mutual if not generally tilted in favor of the broadcasters.
If Congress wants to mandate that AM radio remain in automobiles for the foreseeable future, so be it. But Members should also acknowledge that the law is a gift to the broadcasters and a precedent for a similar mandate for FM in the future. As such, it is only fair that Congress finally require American radio stations to pay artists for the music without which many radio stations would have little or no value whatsoever.
Photo by Ababil12
