Fla., Alaska in harmony, pass music-license bills

Fla., Alaska in harmony, pass music-license bills – music licensing practices in restaurants

Amy Zuber

WASHINGTON – While federal lawmakers have yet to raise their voices in favor of music-licensing reform, two more states have joined the growing chorus of legislative bodies seeking to stem the licensing practices restaurant operators often call abusive.

Florida and Alaska recently joined 16 other states that over the last two years have passed laws intended to regulate the business practices of such performing-rights groups as Broadcast Music Inc.

“It does help operators because it keeps [licensers] from coming into businesses and being coercive,” said Nora Herron, director of governmental affairs for the Florida Restaurant Association. “They can’t do a sneak attack on business owners. Operators will be treated like business people, not like criminals.”

“Under current federal copyright law, music-licensing groups – including BMI, the American Society of Composers, Authors and Publishers, and the Society for the European Songwriters and Composers – can charge restaurants and others businesses a royalty fee on behalf of performers when they play copyrighted music, even from Commercial radio or television.

However, while music-licensing societies deny any improprieties in collecting their fees, many mom-and-pop operators have complained in recent years that some agents use such tactics as purposefully hiding their identities when they enter a business or forcing them to negotiate agreements without disclosing their rates or providing a list of their copyrighted songs.

To address those concerns, 18 states have enacted music-licensing reform laws designed to better regulate the societies’ business practices. In four other states – California, New Jersey, Ohio and Pennsylvania – similar legislation is pending.

After hearing complaints from members, the Florida Restaurant Association conducted a music-licensing survey, which found that the fees charged by licensers varied considerably, ranging from $50 to $4,497, and that societies did not seem to have a discernible criterion for setting the fees.

Like the reforms previously approved in other states, the new laws in Florida and Alaska are intended to address such discrepancies and stem coercion by requiring music licensers to disclose their rates, provide a list of copyrighted songs and follow certain contract guidelines. Some music-licensing societies already have established toll-free telephone numbers, while others are offering computer access on the Internet to inform business owners of their musical holdings.

Under Florida law agents from music-licensing groups also must identify themselves upon entering an establishment. Lawmakers in Alaska were unable to incorporate a similar provision into their bill because it created too much opposition, according to Carol Wilson, the executive director of the Alaska Cabaret, Hotel, Restaurant and Retailers Association.

Some states have passed even tougher restrictions, requiring representatives from the societies to provide several days’ notice to the owner or staff before entering an establishment.

The Florida law originated as a bill sponsored by Rep. Lori Edwards, D-Fla., and Sen. Bill Bankhead, R-Fla. In Alaska the legislation was sponsored by Republican Sens. Tim Kelly and Robin Taylor. In New Jersey music-licensing legislation awaits Gov. Christine Todd Whitman’s signature. A similar music-licensing bill died last year after the governor turned it back to lawmakers with a conditional veto.

The new bill, which was sponsored by New Jersey state Sens. John Bennett and John Adler and Assemblymen Richard Bagger and Joseph Doria, is more likely to become law, however, because it makes compliance less burdensome for the licensers, state association officials said.

Yet despite the widespread efforts to reform music licensing at the state level, many state associations still want the federal government to change U.S. copyright law so that restaurant operators can play music from commercial radio and television without paying royalties.

“The problem with the state music-licensing bills is that only so much can be done,” Wilson commented. “The real change must come from the federal level. But every state effort does make a difference.”

The state associations also believe the government should establish local arbitration so that restaurant owners are not faced with exorbitant costs when disputes arise. Under U.S. copyright law, the only option business owners have to address grievances against licensing societies is to file lawsuits in federal court in New York.

But federal music-licensing reforms have been slow to come, especially because many lawmakers are wary of changing copyright law. Of the three bills currently pending – one in the House of Representatives and two in the Senate – all await committee action.

Rep. James Sensenbrenner, R-Wis., sponsored a bill that allows restaurants and other businesses, regardless of their size, to play music on the radio or television without paying royalties. After the bill was stalled in a House committee, Sensenbrenner and Rep. Carlos Moorhead, R-Calif., introduced a compromise to help move the legislation forward.

The Moorhead-Sensenbrenner compromise permits retail establishments with 4,250 square feet or less of public space – a distinction that would not include a restaurant’s nonpublic kitchen or storage areas – to play music from the radio or television without paying licensing fees. Larger businesses also would fall under the exemption if they have three or fewer television screens or six or fewer radio speakers.

“Philosophically, I don’t agree with a square-footage limit,” Sensenbrenner pointed out. “In my opinion over-the-air broadcasts that have already been paid for by the broadcaster shouldn’t require another royalty paid by a bar or restaurant. That’s double-dipping.

“The political reality is that nothing was going to be done unless a compromise was reached”, he added.

In addition, the compromise establishes access to the licensers’ repertoire and the option of local arbitration when disputes arise between parties. In order to muster support for music-licensing legislation, the Senate also is moving toward exempting businesses based on their size or the sophistication of their audio system.

A Senate bill, introduced in February by Sen. Hank Brown, R-Colo., allows businesses that have less than 5,000 square feet of public space or gross less than $1 million a year to play incidental music from the radio or television without paying licensing fees. Larger businesses also could fall under the exemption if they have 10 or fewer speakers in their establishments.

The third bill pending in Congress is a Senate bill sponsored by Craig Thomas, R-Wyo., which parallels Sensenbrenner’s original legislation in the House. The provisions of the legislation include allowing all businesses, regardless of their size, to play music from the radio or television without paying royalties.

While the National Restaurant Association remains opposed to businesses paying royalties for music from radio or television, the group supports all three congressional bills as well as the Sensenbrenner-Moorhead compromise.

“We still believe operators should not have to pay royalties,” said Katy McGregor, senior legislative representative at the NRA. “But in trying to resolve the issue, we have showed flexibility.”

To help move the federal legislation forward, the NRA is gathering co-sponsors and is the chair of a 30-member coalition – representing groups from dentist offices to health clubs – that also is supporting the bills.

“There are so many problems out there with music licensing,” McGregor pointed out. “We think Congress will have to address the concerns of operators eventually. The million-dollar question is when.”

McGregor added, “The state efforts have been tremendous and have provided us with an incredible amount of leverage at the federal level.”

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