NRB Asks CRB for Lower Rates
The Copyright Royalty Board should reduce the rates noncommercial broadcasters pay in online music royalties, said the National Religious Broadcasters Noncommercial Music License Committee during closing argument Tuesday in the CRB proceeding on streaming music royalty rates (14-CRB-0001-WR [2016-2020]). SoundExchange, which represents artists and record labels, has argued that the noncommercial streaming rates shouldn't change. In June filings, Wiley Rein attorney Karyn Ablin pointed to superior deals made by College Broadcasters Inc. and NPR as evidence that the rate should change.
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SoundExchange hasn't justified its arguments and spent no time during its portion of closing argument discussing noncommercial rates, Ablin said. “SoundExchange has essentially defaulted,” she said in rebuttal filings with the CRB. “There is no basis for the Judges to adopt SoundExchange’s fee proposal.” Most of SoundExchange's arguments and most of the CRB hearing Tuesday were focused on commercial broadcast rights (see 1507210071).
Noncommercial broadcasters pay a flat fee of between $500 and $1,500 per stream for a little over 200 listener hours of music rights. If they go over the allotted amount, they have to pay the commercial rate, according to filings with the CRB. Going over is so expensive that noncommercial stations make sure they never do so, and that's evidence that the fee structure should be changed, NRB said. “No noncommercial webcasters are paying CRB-set commercial usage fees.” Instead, stations take steps such as capping listenership, NRB said.
NRB and Intercollegiate Broadcasting System (IBS) were the principle noncommercial entities arguing before the CRB Tuesday because NPR and the CPB already reached an independent deal with SoundExchange that's awaiting approval by the CRB. It's expected to be approved, King & Spalding attorney Kenneth Steinthal told us. Under the deal, NPR and its stations pay a flat fee similar to the status quo, but with a much higher threshold of listener hours, high enough that they're unlikely to exceed it, broadcast attorneys and noncommercial broadcasting officials told us.
The NPR deal and a similar deal reached between SoundExchange and College Broadcasters are the basis for the NRB argument that the current rates are too high. Broadcasters taking steps to avoid going over the listener cap are an indication the current rate doesn't reflect the deal a “willing buyer and willing seller” would make, NRB said. The CRB uses the “willing buyer" standard to guide its rate setting -- the board is supposed to set rates as it believes the market would if there weren't a statutory licensing requirement. Since there is such a requirement and entities know that they have to license their content to sell it, the market is skewed, SoundExchange has argued.
IBS has asked the CRB not to approve the NPR deal, and it has been involved in successful litigation against CRB royalty rates in the past, CEO Frederick Kass told us. Entities that use digital music in similar ways should pay the same royalty rates, IBS said.