WASHINGTON -(Dow Jones)- A U.S. House subcommittee passed a bill Thursday requiring radio stations to pay royalties to performers.
The bill passed on voice vote in the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property.
Opponents say the apparent unanimity of the subcommittee masks opposition in the full committee and the House.
The National Association of Broadcasters, which is fighting the measure, has secured support from a majority of House members to block it.
The recording industry, which has suffered in recent years due to a decline in CD sales, is championing the bill.
Broadcast radio stations now pay song royalties to songwriters and producers, but they pay no performance fees for playing artists' music. By contrast, cable, satellite, and Internet radio pay performance royalties.
Rep. Howard Berman, D-Calif., who chairs the subcommittee and sponsors the bill, said he wants lawmakers to consider "a sliding scale" for payments by smaller radio stations that may have difficulty paying the full fees.
As written, the bill caps performance royalties at $5,000 per year for radio stations with less than $1.25 million in annual revenue.
The bill's impact on small radio stations has been a concern for many lawmakers, but larger broadcast companies such as Clear Channel Communications Inc. (NYSE:CCU) (CCU) and Cox Radio Inc. (NYSE:CXR) (CXR) would be on the line for millions if the bill becomes law.
Independent labels would be the beneficiaries of that money, as well as large record labels such EMI, Sony/BMG, and Warner Music Group, which is owned by Time Warner Inc. (NYSE:TWX) (TWX).
NAB isn't likely to budge from its firm opposition to the bill, arguing that broadcasters do a service for performers by promoting their music.
Berman made a plea to NAB to bend from that position. "The broadcasters have refused to acknowledge that there may be a sum above zero that they are willing to pay," he said, adding that he would "love to have a discussion" with the broadcasters about a reasonable payment.
The next step is a vote by the full Judiciary Committee. It is possible, but unlikely, that the bill will reach the House floor this year.
Before the full committee votes on the bill, Berman said he wants to work on language that would more closely tie the size of royalty payments to the size of radio stations.
Rep. Howard Coble, R-N.C., the ranking Republican on the subcommittee, said he considers the measure a work in progress. Coble announced earlier this month that he would support the measure.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
(END) Dow Jones Newswires 06-26-08 1132 Copyright (c) 2008 Dow Jones & Company, Inc.
