H.R. 1836

Fair Play Fair Pay Act of 2017

This bill amends federal copyright law to extend a sound recording copyright owner's rights to include the exclusive right to perform or authorize the performance of the recording publicly by means of any audio transmission, thereby requiring terrestrial AM/FM broadcast radio stations that play copyrighted sound recordings to pay royalties for the nondigital audio transmissions of the recordings. (Currently, sound recording copyright owners have a performance right that applies only to digital transmissions by cable, satellite, and Internet radio stations.)

Copyright Royalty Judges (CRJs) must commence a proceeding to determine royalty rates and terms for nonsubscription broadcast transmissions. In determining royalty rates for statutory licensing of such digital or nondigital transmissions, the CRJs must: (1) distinguish among different types of services, and (2) include a minimum fee for each type of service. Differences may be based on the quantity and nature of the use of sound recordings and the degree to which use of the service may substitute for or promote consumer purchases of phonorecords.

The CRJs must establish rates that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller. The decision must be based on economic, competitive, and programming information presented by the parties, including: (1) the sound recording copyright owner's other streams of revenue from the recordings; and (2) the relative creative contribution, technological contribution, capital investment, cost, and risk of the copyright owner and the transmitting entity.

The bill caps the annual royalty rate at: (1) $500 for small commercial broadcast stations with less than $1 million in revenues for the calendar year, and (2) $100 for public broadcasting stations. Exemptions are provided for religious service broadcasts or incidental uses of music from royalty payment requirements.

Proceeds for direct licenses of transmissions otherwise licensable under the statutory license must be distributed in the same manner as statutory license proceeds. The bill requires payment of 45% to featured artists, 2.5% to nonfeatured musicians, and 2.5% to nonfeatured vocalists. Such payments shall be the sole payments to which featured and nonfeatured artists are entitled under a direct license.

Performance royalties for sound recordings fixed before February 15, 1972, must be paid in the same manner as royalties for sound recordings fixed after such date.

A collective designated by the CRJs must implement a policy to accept instructions (referred to as a "letter of direction") from a sound recording copyright owner, or from a recording artist, to distribute a portion of performance royalty payments to a producer, mixer, or sound engineer who was part of the creative process behind the sound recording.

The collective must adopt special procedures for a producer, mixer, or sound engineer to receive a portion of royalties for recordings fixed before November 1, 1995, by certifying that a reasonable effort has been made to obtain a letter of direction from an artist who owns the right to receipts payable with respect to the sound recording.