A lack of economic data hampers the debate over fair royalty rates, said Casey Rae, deputy director of the artist-centered Future of Music Coalition. “There’s a need for more fact-based study of the economic impact of royalty rates” for different broadcast technologies, he said. “The rates should be reasonably platform neutral.” Different technologies will likely require different royalty rates, and a “one-size fits all’ solution isn’t ideal, he said. Rae and Kalo said changes should include a performance royalty for terrestrial radio, though Rae also said royalties assessed to over-the-air broadcasters might need to be structured differently. Congress should reject IRFA and instead seek a solution that embraces market-based mechanisms for setting royalty rates, said the testimony of American Enterprise Institute visiting scholar Jeff Eisenach. Legislation like IRFA is “designed to tilt the playing field in such a way as to subsidize a particular class of copyright users,” he’ll say. The Recording Academy said it also opposes IRFA because it would reduce artist royalty payments by as much as 85 percent, according to the testimony of Recording Academy Chair Emeritus Jimmy Jam. Congress should instead focus on closing the “corporate radio loophole” that prevents broadcasters from “paying a single penny” to artists, he’ll say.
IRFA sponsors argue that lower webcasting rates will create more webcasting opportunities for artists and generate more revenue. When Wyden spoke to the Future of Music Summit in Washington earlier this month, he defended his legislation as policy that could help expand revenue options for artists by encouraging investment in new Internet radio services. Broadcasters, as well as most other stakeholders, would seek some changes to IRFA as introduced, said Oxenford. Many broadcasters want to expand their reach to Internet audiences but are reluctant due to the royalty rates, he said.