He walked the audience through the anatomy of one "stark example of this illogical system," the rate-setting standards used for webcasters and satellite/cable radio. The delivery of music over the Internet was a new concept back in 1998 when the law was established, so the standard used for satellite and cable radio was grandfathered "without any real understanding of the future implications" and with no "legitimate reason, at the time, to create this bifurcated system," he argued.
Nadler also cited the Songwriter Equity Act, introduced last year by Reps Doug Collins (R-Geogia) and Hakeem Jeffries (D-NY), that aimed to help songwriters obtain a fair market value for their work and mandate a market-based "willing buyer, willing seller" standard for setting mechanical reproduction royalties. (The Copyright Office's report on music licensing has recommended these two points.)
He saved his strongest words for radio. The lack of a performance right for sound recordings on terrestrial radio (also known as AM/FM radio) is "perhaps the most glaring inconsistency and injustice crying out for legislative action," said Nadler. "This is incredibly unjust. The bottom line is that terrestrial radio profits from the intellectual property of recording artists for free. I'm aware of no other instance in the United States where this is allowed."
Continuing on the performance right, Nadler wondered why a performance right is a controversial concept in a capitalist society that takes lengths to ensure property rights. "We do not usually let one party unilaterally appropriate the property of another party without that party consenting to the appropriation, and the terms and conditions. It is wrong."
The Congressman's comments came a day after the Copyright Office released its anticipated study of music licensing. Nadler's talking points touched on many of the recommendations made in the Office's report: fair compensation for creators, a more market-based approach to setting royalties, federalization of pre-1972 recordings and a performance right for terrestrial radio.
Noting last year's House hearings, the recent Copyright Office report, the upcoming Department of Justice review of the ASCAP and BMI consent decrees, and other pertinent legal matters, Nadler said there is "tremendous interest in Congress" toward music copyright right now. And he implored members of the audience to play an active role in educating other creators and contacting their representatives.
"These moments when there is focus and motivation don't come along very often," he said. "We must seize the opportunity or risk losing it forever."