The Internet Radio Fairness Act Provides Long Overdue Fixes to an Antiquated System

(Washington, DC) -- Lee Knife, Executive Director of the Digital Media Association (DiMA) issued the following statement in response to today’s introduction of the “Internet Radio Fairness Act of 2012”:

“The Internet Radio Fairness Act of 2012 sheds light on a Copyright Royalty Board (CRB) system in need of meaningful reform.

“The legislation wisely sidesteps many of the extraneous issues involving AM/FM radio to focus on the core problems associated with the current rate-setting process – namely, the fact that the current CRB system forces Internet Radio services to pay unjustifiably high royalties, and is replete with a series of procedural rules that disadvantage licensees.

“Statutory royalty rates for most music licenses – including all digital music services except Internet radio – are determined by a standard commonly known as 801(b). For reasons that defy logic, rates for Internet radio are determined under a unique, higher, anti-competitive standard – often referred to as the ‘willing buyer – willing seller’ standard. The Internet Radio Fairness Act would eliminate this unfair distinction and institute 801(b) as the standard for ALL music services seeking a statutory license.

“New and emerging music platforms such as Internet Radio have revolutionized the way countless individuals enjoy music; and it is more important than ever that Congress update existing law to guarantee the continued development of these services.  Applying the existing 801(b) standard, which is already applied to all other statutory music licenses, is a key step towards achieving this objective.

“The 801(b) standard has been widely used for nearly half of a century; and it’s worth pointing out that those who complain about applying the 801(b) standard to Internet Radio today have conspicuously never complained about the application of that very standard by the CRB when setting the rates to be paid for their mechanical licenses.

“We would like to thank Representatives Chaffetz and Polis and Senator Wyden for their help in addressing this very important issue.”

About DiMA

The Digital Media Association (“DiMA”) is the trade association representing the legal and policy interests of the nation’s leading online distributors of digital music, movies and books.  DiMA members are constantly developing new and innovative ways to provide consumers with increased access to legitimate online content, and DiMA helps its members accomplish this objective by representing the industry in a wide variety of legal, political and regulatory matters.