It's too bad George Carlin died this week, as the prickly comedian's scathing wit would be perfect for the current debate over whether AM/FM radio should pay money to the artists whose music it plays. It sounds like a simple question, but billions of dollars are at stake, and neither side looks interested in taking anything resembling the "high road." How else to explain the fact that cans of herring are being sent through the mail and foreign ducks with suitcases are appearing in newspapers?

While radio currently pays the songwriters who pen the music and lyrics, it doesn't have to pay the performers; by contrast, satellite radio and Internet radio have to pay both groups. As music label revenues have declined, labels and artists have naturally turned to what they see as a huge potential revenue source. The two bills under consideration in Congress would make all forms of broadcasting liable for public performance fees, but broadcasters militantly insist that they provide crucial promotional support for artists and should be able to keep spinning discs without paying.



Nothing says "I have disdain for your

ideas" like canned herring

The spat between artists and record labels on one side and broadcasters on the other has exploded into the open recently as Congress has taken up a piece of legislation that would force radio to start paying artists for music. At a House subcommittee hearing this morning, HR 4789 was marked up and passed on to the full committee for a vote, while S 2500 waits for action on the Senate side.

"Today's vote comes as a complete nonsurprise, given the House IP Subcommittee's history of support for the RIAA-backed tax on local radio stations," said the National Association of Broadcasters after the vote. "Despite today's action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on America's hometown radio stations should be used to bail out the failing business model of foreign-owned record labels."

New tax or old loophole closed?

The rhetoric of taxation and punishment might seem a bit extreme, considering that radio does pay such a royalty already to songwriters and that other media have to pay the artists as well. Indeed, the artists claim that this isn't so much a tax as an attempt to close a Congressional loophole only brought about through the power of the broadcasting lobby back in the 1930s.

Nancy Sinatra (daughter of Frank) sent a letter to House Speaker Nancy Pelosi this week in which she said that "the fact is people who do the work, regardless of any promotional effect either way, should have the right to be paid fairly for it." All other developed countries do require radio to pay performers.

musicFIRST, a group backed by the RIAA and SoundExchange, certainly has an argument to make, one that Congress is currently considering. But it's also not above stooping to odd publicity stunts, such as sending the National Association of Broadcasters a can of herring and then issuing a press release about it. The goal? To show that the broadcasters' arguments are nothing more than "red herrings." Clever.

The broadcasters weren't amused, with NAB Vice President Dennis Wharton saying that the stunt was "so lame that it barely warrants a response. Instead of sending fish to radio stations that advanced the careers of artists, RIAA should send food to the entertainers that foreign record labels have abused for decades."

The dig about "foreign record labels" should give you a clue about just how nasty this debate is going to get. That's right, "xenophobia" is the new "logic." The NAB is today running ads in DC publications that show a duck with a briefcase full of cash. On the briefcase are stickers from Japan, England, and France, helpfully marked with the music label that is based in each country (Sony, EMI, and Universal). No mention is made of the fourth label, Warner, which is based in the US, nor of the fact that EMI is by far the smallest of the four.

"While three of the four major record labels are located outside the US, free, local radio stations are the lifeblood of towns and communities right here in our country—delivering vital local news, weather and emergency information to your constituents," says the ad. "Don't let the recording industry hurt local radio stations just to put money in the hands of big international companies."

Instead, the money should apparently stay in the deep, deep pockets of US broadcasting execs at companies like Clear Channel.

If the entire debate sounds like it's teetering on the edge of full-blown farce, that's only because each side is pulling out all the stops due to the massive money at stake. The Free Radio Alliance, which also represents broadcasters, says that a performance royalty could cost US radio stations between $3 billion and $7 billion each year.

When US recorded music sales currently hover in the $10 billion-per-year range, an extra infusion of $3 billion to $7 billion must look like a pretty meaty prize.