The AFL-CIO is joining the music industry in opposing legislation favored by Internet radio provider Pandora and some broadcasters that would lower the royalties paid to performers by Internet radio stations.
The labor group said it opposes the legislation introduced last month by Rep. Jason Chaffetz, R-Utah, and Sen. Ron Wyden, D-Ore., because it is concerned it will result in much less revenues for musical artists. The bills would require the federal government's royalty rate-setting body known as the Copyright Royalty Board to use the same standard in determining rates paid by Internet radio stations as is used for satellite and cable music providers. Internet radio stations like Pandora complain that they pay much higher royalties than cable and satellite providers.
The legislation "would mandate that more than eighteen hundred Internet radio stations pay recording artists and musicians far less than their recordings are worth, just because three digital services do," William Samuel, director of the AFL-CIO's government affairs department, wrote lawmakers last week in a letter released on Thursday. "This would start a race to the bottom in performers' compensation, violating the founding principle of America's labor movement: a fair day's work deserves a fair day's pay."
The AFL-CIO's opposition was revealed on the same day that Pandora joined major broadcasting chains such as Clear Channel and Salem Communications and others in launching the Internet Radio Fairness Coalition to support the Chaffetz-Wyden legislation.
The music industry launched its own coalition known as MusicFIRST in 2007 to push Congress to pass legislation that would require traditional terrestrial radio stations to start paying fees to performers for playing their music on the air. While traditional radio stations pay royalties to composers and music publishers, they have been exempt from having to pay performers because musical artists were viewed as benefiting from the exposure they received from airplay on AM and FM radio stations. In the 111th Congress, broadcasters successfully derailed legislation that would have required radio stations to pay performance fees and have now joined forces with Pandora and other Internet radio interests in pushing for the Chaffetz-Wyden legislation.
MusicFIRST has criticized the legislation for not addressing the terrestrial radio station royalty issue. The group also says the Chaffetz-Wyden legislation would reduce revenues for musicians.
"This bill is now commonly known as the 'Screw Artists Act' because it would produce a windfall to millionaires, mandate a pay cut for artists, and provide no benefits to subscribers," MusicFIRST Executive Director Ted Kalo said on Thursday in response to the new Internet Radio Fairness Coalition. "Pandora's attempt to hide behind a coalition of the already willing reeks of a desperate attempt to dodge accountability and create 'faux-mentum' for a bill facing growing opposition."