Australia's PPCA is challenging the country's commercial radio sector for a bigger cut of broadcast income.

On behalf of its membership, the Phonographic Performance Company of Australia launched a constitutional case in the High Court arguing that the commercial radio industry was obliged to pay an unfairly low rate for the recordings it broadcast.

The PPCA wants the High Court to examine a price cap introduced 40 years ago under the country's Copyright Act which limits the amount Australia's commercial radio stations can be required to pay to artists and labels.

The broadcast cap -- mentioned in section 152(8) of the Copyright Act -- is fixed at no more than 1% of a broadcaster's gross income, argues PPCA Chief Executive Stephen Peach, a figure which converts to just $4 million Australian ($3.5 million) for all the recordings played each year across the country's 261 commercial radio stations.

"For years now, Australian recording artists and record labels have effectively been subsidizing a billion dollar industry because of an antiquated piece of legislation," comments Peach.

"Since this inequitable price cap was introduced in 1969, radio operators have built large and profitable networks based on the music that is played every hour of the day but for which very little is paid," he adds. "All we are seeking, and all that a successful challenge in the High Court will deliver to us, is the right to make our case to the independent umpire, the Copyright Tribunal, for a fair return to artists and labels."

Trade association Commercial Radio Australia disputes the PPCA's figure. CRA's chief executive Joan Warner claims that Australia's commercial radio stations pays close to $25 million Australian ($22 million) each year in copyright fees. "We understand only around one third of the copyright fees collected by PPCA are subsequently distributed to the artists," says Warner in a statement. "This is all about increasing the profit margins of the multi-national record companies at the expense of Australian commercial and public radio stations."

The PPCA is basing its case on the Australian Constitution and that an arbitrary price cap fails to meet the "just terms" test, particularly given the existence of an independent price regulator in the Copyright Tribunal.

The PPCA is no stranger to the Copyright Tribunal. In 2007, the Copyright Tribunal ruled in favor of the PPCA in its dispute over the tariff paid by Australia's nightclubs sector. Separately, the PPCA last March called upon the tribunal to adjudicate its spar with the fitness club industry, a decision for which is pending.