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The Copyright Royalty Board yesterday published in the Federal Register the proposed rates for the public performance of musical compositions by noncommercial broadcasters for the period 2023 through 2027. The rates reflect settlements between ASCAP, BMI, SESAC and GMR with various organizations representing noncommercial broadcasters. The Corporation for Public Broadcasting agreed to one set of rates paid to cover NPR and PBS affiliates. The NRB (the religious broadcasters’ organization) has a Noncommercial Music License Committee that agreed to another set of rates that apply to non-NPR radio stations not owned by colleges and universities, setting out rates that these noncommercial stations pay to each of these rights collection agencies. For these radio stations, the rates are based on the population served by each noncommercial station. College and university-owned stations can take advantage of a third set of rates, based primarily on the number of students in the school with which the station is affiliated. Comments and objections, if any, to these proposed rates are due on or before February 27, 2023.
Commercial broadcasters have royalty rates that are to be paid to these performing rights organizations (or “PROs”) set not through the Copyright Royalty Board but instead through varying processes. ASCAP and BMI are subject to antitrust consent decrees (see our articles here and here on arguments about those decrees). The decrees provide that, if the PRO cannot reach an agreement with representatives of the commercial radio industry (usually the Radio Music License Committee – see our article on RMLC here – although commercial religious broadcasters also negotiate rates with these entities through the NRB), a US District Court judge in New York will hold a trial, acting as a “rate court” to determine the amount for reasonable rates. ASCAP and BMI are currently negotiating with the RMLC on new rates for commercial broadcasters. SESAC is also subject to antitrust settlements with both the RMLC and the TV Music License Committee. If SESAC and the committees cannot reach agreements, an arbitration panel sets the rates (see our articles here and here on radio rates set as a result of this process). After prolonged litigation with GMR to have their rates reviewed in some manner, the RMLC last year dropped its lawsuit seeking that relief and GMR now has no oversight as to the rates it charges (see our article on the GMR license that resulted). Noncommercial broadcasting, however, under Section 118 of the Copyright Act, has its PRO obligations set by the Copyright Royalty Board and, like this year, the result is almost always a settlement between the parties (even though, theoretically, the Board could hold hearings to set the rates if the parties had not agreed to the rates).
This is the first year that GMR is included in the noncommercial broadcasters’ settlement. Five years ago, it was late in trying to enter the CRB proceeding, so it was just lumped in with unrepresented copyright holders that are covered by the statutory license for the performance of musical works issued by the CRB (see our article here). This year’s settlement also recognizes that there may be some songwriters and publishers who are not members of ASCAP, BMI, SESAC and GMR but have music that is played on the air. A $1 fee to cover all of this unaffiliated music was provided in the settlement agreements and in the proposed CRB rates.
These rates cover only over-the-air broadcasting. As the statute was adopted before streaming was important, it was not covered in Section 118 of the Copyright Act. So, unlike the agreements for commercial broadcasters which typically cover royalties due to the PROs for streaming, streaming negotiations are separately held under the same rubric as apply to commercial broadcaster negotiations with the PROs. It should be noted that the agreements for music use by schools and colleges typically include the PRO payments for streaming with the rights given for other campus music uses (e.g., in concert halls, cafeterias, gyms, and other campus venues).
Music rights are always complicated (see our article published yesterday). So consult someone knowledgeable about these issues for full details as to how these royalties apply to your operations.
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