Debate continues over radio tax

The Department of Commerce supports the Performance Rights Act, said General Counsel Cameron F. Kerry in a recent letter to the Senate Judiciary Committee.

The act aims to change the laws regarding the royalty fees terrestrial radio stations have to pay. Under the current legislation, stations only pay a song-writer fee. If the act is passed, a performance royalty fee would be charged as well.

The act has caused much debate in the past year, as bills have been cleared by both the senate and congress.

Detractors, which include radio stations, interest groups, and even some musicians, argue the fees  only serve the record labels and put financial stress on, or bankrupt, small radio stations.

Supporters, however, argue the act simply illuminates a loophole that has allowed terrestrial radio to get away with not paying anything to performers for more than 80 years.

“At the international level, the Performance Rights Act addresses a long-standing omission in U.S. copyright law that may have harmed American performers and record companies,” Kerry said in the letter. “Today, the United States stands alone among industrialized nations in not recognizing a performance right in sound recordings.”

Marty Machowsky, a spokesman for MusicFIRST, a coalition of record labels, interest groups and more than 200 big-name artists fighting for the bill’s passage, said the administration’s support is “a big boost” to the coalition’s efforts.

“The administration’s letter makes the case for the Performance Rights Act clear and simple — everyone should be paid for their work,” Machowsky said. “It also continues the strong, bi-partisan support from the executive branch. The Bush administration also urged Congress to create a performance right on radio for American artists and musicians.”

Peggy Binzel, the spokeswoman for the Free Radio Alliance, a coalition fighting the act, called the department’s view “a very narrow perspective based on trade and commerce alone.”

“What congress is charged with is looking at the full picture,” she said. “They’re looking at the broader communications landscape, not just the trade, which is just a little bitty piece of this larger puzzle.”

Congress must also consider how radio functions in the community as a news and information source, as well as entertainment, and the financial troubles the act could cause, Binzel said.

Ryan Patena, general manager of WIUX, echoed Binzel’s sentiment. As the station is a non-commercial entity, the funding comes primarily from underwriting, which limits the amount of funding, he said.

“We already aren’t able to do as much as we would like,” Patena said. “If this comes into play, then that’s more money that’s being taken away from the equipment we need, the special events and concerts we put on. Ultimately, it’s the law, so we’re going to have to pay it, but it’s not something you like to hear.”

Machowsky said there are accommodations for small community and college stations, with some fees being as low as $100 a year.

Binzel, however, said she worries these fees are only the beginning of a slippery slope.

“It starts out as one little fee, but there’s only one way they can go,” Binzel said. “They go up. So, whatever ends up being in the legislation is just the starting point. At the end of the day, the copyright board sets the rates. This is just the start.”