Copyright Royalty Board Challenged as Unconstitutional

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constitutionThe Copyright Royalty Board is a three-member panel that sets the rates paid for statutory copyright licenses. In other words, they determine how much a webcaster or radio station has to pay in royalties if they play a band’s music.

Now, I’ve had a number of comments from webcasters on my posts about the Performance Rights Act stating that they see no reason why broadcast radio should not have t pay the royalties that they do. In my opinion, that is a reversal of the horse and cart. Online royalties were ushered in despite the fact that broadcast had set the precedent of a value for value exchange (airplay promotion in exchange for broadcasting rights).  Then the push began using online audiocasting as the precedent to apply these royalties to their predecessors in the AM/FM world.

Well, despite the artificial divide that has been created between the two, there is common cause for a bit of optimism. On August 31, Live365 filed a complaint against the Copyright Royalty Board (CRB) in the U.S. District Court in Washington, D.C., stating that the CRB violates the Constitution’s appointments clause.

The basic argument is that due to the power held by the three-member board, its members should be considered “Principal Officers of the United States”. That definition make the positions Presidential appointees whereas at present they are appointed by the Librarian of Congress.

BLT: The Bog of the Legal Times provided a great quote from Judge Brett Kavanaugh of the U.S. Court of Appeals for the D.C. Circuit, who wrote on July 7 that the CRB might well run into appointment clause issues due to the way in which its membership is selected.

Nonetheless, in a concurring opinion, Kavanaugh opined that the manner in which the board is selected “raises a serious constitutional issue.” He wrote, “[B]illions of dollars and the fates of entire industries can ride on the Copyright Royalty Board’s decisions.” He compared its power to that of the Securities and Exchange Commission and the Federal Energy Regulatory Commission. “But unlike the members of those similarly powerful agencies, since 2004 Copyright Royalty Board members have not been nominated by the President and confirmed by the Senate.”

This is not an issue that is isolated to one group based on how they broadcast; it is an issue of vast importance to all of us. Judge Kavanaugh is right in his analyses of the far reaching implications for our industries. We have already seen the start of this impact in the CRB’s relationship with webcasters.

It would behoove all of us to pay attention to this case as its ramifications will ripple through the radio industry rapidly once a verdict is reached.

Image: caveman_92223 / CC BY-ND 2.0
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