On June 24, the Third Circuit Court of Appeals released its decision on
the case Prometheus v FCC. This was a lawsuit that was filed in August
2003 to stop the Federal Communications Commission’s June 2 rulemaking
on media ownership from taking effect.
In a 218-page decision, the court told the FCC that its attempts to further
deregulate the American media were unjustified. The court determined that
the FCC employed "irrational assumptions and inconsistencies"
when drafting the looser cross-ownership rules, and ordered the FCC to
return to the drawing board to craft regulations that truly reflect the
Commission’s stated goals of promoting localism, competition and diversity.
The Future of Music Coalition was just one of the many groups that fought
hard to urge the FCC to maintain ownership rules to protect the public
interest. Here’s a recap of some of our efforts:
In November 2002, the FMC released “Radio
Deregulation: Has It Served Citizens and Musicians?” In this
report, the FMC thoroughly examined the effect of the Telecommunications
Act of 1996 on radio industry, concluding that radio has become less diverse,
less local, and less competitive. The report urged policymakers to see
the negative consequences of the deregulation of the radio industry as
a “cautionary tale” before proceeding with this broader media
In January 2003, FMC’s executive director Jenny Toomey joined rocker
Don Henley, NAB’s president Eddie Fritts, and Clear Channel’s
Lowry Mays in front of the Senate Commerce Committee to testify about
the impact of radio consolidation on the radio industry, musicians and citizens.
In April 2003, the FMC sent a
letter co-signed by over thirty top-tier musicians to FCC’s
chairman Michael Powell. The letter urged the FCC to grant Congress and
the public a full opportunity to review any proposed changes of media
ownership rules before they are enacted. Over 4100 artists added their
signatures to this letter, which was re-delivered to the FCC on May 28.
In May 2003, the FMC released an analysis
of the FCC’s public comments on this rulemaking finding overwhelming
public opposition to relaxing ownership caps.
In September 2003, the FMC filed a “Petition
for Reconsideration” at the FCC, pointing out the flaws and
inconsistencies in the June 2 order and urging the FCC to reconsider their decision.
The Third Circuit court’s ruling clearly demonstrates that it rejects
the notion of allowing large media companies dominate and grow even larger.
We congratulate and thank Media Access Project for arguing so ably on
behalf of all citizens in this landmark case. FMC will continue to work
in coalition with Free Press, Consumers Union, Common Cause, Media Access
Project, Prometheus Radio Project, and other organizations to ensure that
the FCC remains true to its mission of acting in the public interest.
Read our press release here:
On May 2 and 3, the Future of Music Coalition hosted its fourth annual
FMC Policy Summit in Washington, DC. Once again, this event was a place
where diverse voices came together to debate critical issues at the
intersection of music, law, technology and policy. We were thrilled
with the level and scope of discussion this year, both onstage and off,
and we appreciate the contributions made by so many attendees to various
We’ve compiled lots of follow-up materials, especially useful for those who
weren’t able to attend, accessible from the Summit’s
Detailed Blog of Entire Summit
Thanks to the nimble fingers of Derek Sivers from CD Baby, we have an
amazing record of the entire Summit, typed in live during the event.
Not only a great document of each panel, but also a place to post comments
and continue the discussions. Additional blogs are linked through the trackback.feature.
List of Attendees
A complete list of folks who actually attended is here
or downloadable as a more readable PDF here
Here’s a sample of press accounts, both before and after the Summit:
Musicians Score a Date With Lobbyists
Evidence of the "rock-star effect" was on display earlier
this week as lawmakers, think-tank experts, professors and scads of
musicians gathered at The George Washington University to debate the
politics of media consolidation, music royalties and peer-to-peer file
swapping at the fourth annual Future of Music Coalition Policy Summit.
By David McGuire
May 6, 2004
Record Industry Wants Still More
It’s not enough for the music industry that legal music downloads are
gaining popularity. Company honchos want to raise song prices, gain
more control of distribution and collect higher royalties. Michael Grebb
reports from the Future of Music conference in Washington, D.C.
May 5, 2004
Harmony Rules in the Future of Music
Future of Music Summit Offers an Interlude in the Online Piracy Cacophony
By David McGuire
April 30, 2004
Future of Music Coalition conference
Coming up on May 2 - the Future of Music Coalition policy summit in
Washington, DC. And it’s going to be a truly amazing event.
p2pnet.net April 9, 2004
Assuming all goes as planned, we’ll host our fifth Summit in Washington,
DC, but we may be moving the time of the event to September 2005 in
an effort to avoid a conflict with Jazzfest, Coachella and college finals.
So mark your calendars now for mid-September 2005 and we’ll be sure
to shoot you details as the event develops.
From March 15 – April 15, 2004, FMC and the Pew Internet &
American Life Project hosted a comprehensive online survey designed
to gauge musicians’ opinions about the internet and how it affects
the way they create, promote and distribute music. The online survey
asked musicians a variety of questions about music, technology, copyright,
peer-to-peer filesharing, emerging best practices, and the public domain.
Over the 30-day period, over 2700 musicians participated.
On April 30, Pew Internet released some of the preliminary findings
from the survey in a data memo. The survey shows that musicians are
quite divided in their opinions about the impact of music file sharing
by Internet users. There is no clear consensus regarding the effects
of online file-sharing on artists - about a third of artists say that
file-sharing is simultaneously good for promotional purposes, but also
bad because file-sharing circumvents payments to artists.
The data memo is available on Pew Internet’s website here
We have also posted the key findings included in the data memo here
How do musicians feel about Internet file-sharing?
With all of the hullabaloo about music file sharing on the Internet,
perhaps it’s time to ask the musicians themselves about how they feel.
The Pew Internet & American Life Project has done just that, surveying
2,755 musicians and songwriters between March 15 and April 15. Interestingly,
the responses are far from uniform.
By Eric Sinrod
USA Today, May 12, 2004
Currently, Pew and FMC are working diligently on a comprehensive report
based on the survey’s data. We look forward to sharing the results
with our project partners — CD Baby, Just Plain Folks, Nashville Songwriters
Association, AFTRA, AFM, ASCAP and Garageband.com – and with the
music community as a whole. We hope that the survey provides us all
with a realistic perspective of how musicians use and value the internet.
Stay tuned for a full report in late-August 2004.
On June 16, the FMC, AFTRA and AFM jointly filed comments at the FCC
on Docket 99-325, Digital Audio Broadcasting Systems And Their Impact
on the Terrestrial Radio Broadcast Service.
The FCC has opened this proceeding to collect feedback from various
stakeholders about the transition from an analog transmission of radio
to a digital transmission. With digital signals, radio frequencies that
are currently spread apart on the dial can be placed closer together
since digital transmissions are more precise. The more precise transmissions
would also mean that, theoretically, existing broadcasters would be
able to use the channels adjacent to their current license for other
uses. In other words, a station licensed at 90.1 would theoretically
be able to use the frequencies 90.0 and 90.2 to send data or offer subscription services.
In our comments, we emphasize that the transformation of the terrestrial
broadcast from an analog to a digital service must be viewed in the
context of the well-documented environment of extreme consolidation.
Localism, Competition and Diversity are essential policy goals that
must be at the forefront of any migration to digital broadcasting. At
a minimum, the FCC must address and reconcile the incumbent broadcasters’
questionable record in fulfilling these traditional regulatory goals
before granting them expanded rights to multicast or integrate data
or subscription services. Fair technology standards can only develop
with active participation from all of the various stakeholder communities
who have legitimate interests in the future of this valuable public resource.
As recording artists, musicians and fans, we requested a role that goes
beyond our right to submit comments into the record. We urged the FCC
to include musicians, songwriters and performers in this proceeding
to ensure that the transition to digital is beneficial for the creative
community as well, and not just the incumbent broadcasters.
Over the next month we will be reviewing the comments filed by other
organizations and preparing reply comments, which are due in mid-July.
Read our filing here
You can access other organizations’ comments on the docket here:
type in 99-325 in the “proceeding” box.
On May 5, the New York State Attorney General’s office, under
the leadership of Eliot Spitzer, announced that the Office had reached
an agreement with key major labels and music publishers regarding $50
million in unclaimed recording and publishing royalties.
The settlement was the result of a two-year investigation that found
many artists and writers were not being paid royalties. Spitzer said
that the payment failures were not related to disagreements over the
terms of recording contracts or the amount of royalty payments, but
that the accounting departments had simply failed to maintain accurate
contact information with the artists or their estates and had stopped
making required payments. The list of artists that had been difficult
to contact included obscure musicians with just one hit, as well as
such wallflowers as David Bowie, Dolly Parton and Sean “P Diddy” Combs.
FMC applauds Eliot Spitzer and his staff for highlighting this issue
that has beleaguered major label recording artists for decades, and
has only gotten worse with industry-wide consolidation. As labels merge,
accounting departments merge, which makes it all the more difficult
for the labels keep track of which artists are owed what. Of course,
it’s the same problem for musicians signed to labels that are,
subsequently, bought out or fold – who do you contact at the new
label to check on your royalties? As part of the settlement, the companies
have been tasked to make a greater effort to locate and stay in touch
with artists who are owed payments, and we hope that Spitzer’s
office continues to play a watchdog role on behalf of all artists.
release from the Attorney General’s Office
Labels Agree To $50 Million Royalty Payout
By Brian Garrity
May 5, 2004
While Eliot Spitzer has had some success on the East Coast, the recording
industry seems to be getting their way on the West Coast. On June 10,
the California Assembly held hearings on SB 1034 – the bill introduced
by Senator Kevin Murray in 2003 that was crafted to establish that a
record company’s duty to account accurately for royalties earned under
a recording contract was a fiduciary duty.
The FMC had supported the intent of this bill in its earlier form —
see our testimony filed during earlier hearings here.
But thanks to recording industry lobbying in the California Assembly,
the bill it its compromise form is now not much more than a re-statement
of the language that already exists in most major label contracts regarding
the artist’s right to audit, though it does make the right to
audit a statutory right.
According to AFTRA, which lobbied hard for reform and was heavily involved
in the negotiations, “the amended compromise bill would provide
recording artists under royalty contracts the statutory right to confirm,
through audits, proper payment for their work, and conduct such audits
- or have such audits conducted by their chosen representatives - individually
or in groups. The bill would also codify the ability to hire auditors
on a contingency fee basis, which, combined with the ability to audit
in groups, should increase the probability that artists will actually
Elements sought during negotiations but not in the final bill included:
copy of the amended bill is here (including strikethroughs of what
analysis of the amended bill is here
While the bill does make the right to audit a statutory right, the lack
of remedies and removal of an auditor’s right to review manufacturing
records seriously weakens the bill. We find it difficult to fathom how
an auditor can confidently assess the artists’ royalty situation
without having access to this information, although access to such materials
must be assumed in order to make this statute meaningful.
FMC is disappointed with this outcome since it does little more than
affirm the rights and rules regarding audits that are found in most
current major label contracts. On a positive note, the process by which
this bill was drafted and amended– the hearings held, the testimony
filed, the negotiations themselves – shed some much-needed public
light on major label accounting practices. We hope that this bill puts
us another step closer to ensuring that artists’ royalties are
accounted fairly and properly.
In early June, Senators McCain and Leahy introduced S 2025, legislation
that would reauthorize the Federal Communications Commission to modernize
their outmoded interference protection standards, allowing for expansion
of the FCC’s insanely popular LPFM service to urban markets. Over the
past five years, the FCC has overseen the implementation of hundreds
of new LPFM stations in rural parts of the country. Without this legislation,
however, commercial broadcasters will succeed in their attempts to keep
these tiny stations off the air. FMC is working closely with groups
like Media Access Project,
Prometheus Radio Project,
Free Press, United Church of
Christ and many others to support this bill. We encourage you to drop
us a line if you are interested in learning how you can convince Congress
to allow LPFM in your community.
Senators Back Low-Power Radio
Senators John McCain and Patrick Leahy introduce a bill that would allow
low-power radio stations to get licenses to broadcast in big markets.
But commercial radio interests probably won’t give up the spectrum without
By Ryan Singel
June 5, 2004
As usual, there’s loads of reading in the newsstream.
The FMC would like to welcome Wendy Harman on board as our first and
only employee! Wendy is a recent graduate of Northeastern University
School of Law and is serving as the FMC’s executive assistant.
Wendy will be working out of Jenny Toomey’s house/office in Washington,
DC and can be reached at 202.518.4117 or wendyATfutureofmusic.org
We are also pleased to welcome two summer interns. Juliet Han is a student
at UC San Diego and radio DJ who has come out to Washington, DC to spend
her summer working on FMC projects. Brett Keller, a student in Drexel
University’s music industry program, is working with Kristin Thomson
in Philadelphia on various projects including health insurance and copyright
issues for musicians.
Post summit, Jenny has been working on issues relating to FMC’s capacity.
She has brought on our newest FMC staffer Wendy Harmon and she is anticipating
a brisk summer of interns and institution building. At the end of June
she will take a short leave of absence from FMC to coordinate musicians
in the election.
Walter McDonough has been preparing for his trip to Edmonton, Alberta
where he will be speaking at the National Campus & Community Radio
Kristin recently traveled to Vienna, Austria to participate in the Free
Bitflows conference on a panel about “Alternative Compensation
Systems”; in other words, ideas about how musicians will be compensated
in the digital future. After a quick touchdown in Philadelphia, she
picked up her toddler Riley and headed out to Denver for a week of work
and a weekend of rock shows (just as a spectator). She looks forward
to working with her intern Brett over the summer and diving into various
FMC research projects.
It’s been a busy couple of months for Michael, who emerged from his
post-Policy Summit haze to find a barrel of great issues to focus on.
While this is a singularly odd summer in Washington, with so much energy
focused on the upcoming elections, a good deal of work is happening
behind the scenes that may have a significant impact for years to come.
This includes the FCC’s proceeding on digital radio, Congressional debate
on the proposed expansion of Low Power FM radio, CARP reform and others.
Michael also promises that when everyone in DC goes away for the August
recess he will clean up his office.
Peter DiCola is finishing up a couple of projects on radio consolidation,
and is working on developing a new project related to the media industries.
If you have any feedback, questions, or suggestions please send an
email to suggestions [at] futureofmusic [dot] org,
and let us know how we’re doing.
Thanks for your support and see you next time.