A new bill, titled the Copyright Royalty and Distribution Act, calls for the Library of Congress to hire a full-time judge who would hear disputes over "reasonable" royalty rates.
The bill makes dozens of changes to one of the most convoluted portions of U.S. copyright law, which essentially says the federal government will set rates for compulsory licenses for broadcasts and Webcasts of music. Because it is backed by Reps. Lamar Smith of Texas, and Howard Berman of California, the top Republican and Democrat on the House subcommittee overseeing copyright law, the measure had been expected to receive a favorable reception at Thursday's hearing.
"This legislation will streamline the process and help reduce its unpredictability and inconsistency," Smith said in a statement.
The proposal envisions replacing the current system of Copyright Arbitration Royalty Panels (CARPs) with a judge who would be required to be a copyright lawyer with at least 10 years of experience. Decisions made by the judge may be appealed directly to a federal appeals court.
A notable CARP proceeding over Webcasting rates concluded last year with the Library of Congressthe panel's recommendation. Fees for online transmission of music have been a source of contention since the enactment of a 1998 copyright law in which Congress required Webcasters to pay record labels and artists a royalty for playing their music online.
The, which prompted some Webcasters to close up shop, required Web companies to pay about a fourteenth of a cent each time they played a song online for a single listener. Radio stations pay the same amount when they place their music programming online.
At the time, the Recording Industry Association of America, which represents the major music labels, blasted the rates as too low.
Under the Smith and Berman bill, the judge would be required to consider a "fair income" for a copyright holder and could adjust rates for inflation. The judge would serve for a term of five years and could be reappointed.