RECORDING ARTISTS COALITION
ON THE MOVE

The Recording Artists Coalition's August newsletter gives a fairly detailed account of the group’s activity since its emergence amid the flap over California’s seven-year statute two years ago. RAC has had a fairly low public profile since the heyday of California Senator Kevin Murray’s political pot-stirring, but the group has been busy weighing in on a host of issues and “monitoring” certain settlements and legislative processes.

One of the issues RAC has taken part in is the FTC CD price-fixing ruling spearheaded by New York Attorney General Eliot Spitzer. RAC is monitoring the two part settlement, which requires the record labels to pay a total of $67.4 million to consumers (at $13.86 each) and to distribute $75.7 million in CDs to libraries, colleges, and schools, to make sure the labels see the settlement through.

Another two issues RAC is involved in are the FCC’s rules for the proposed transition to high-definition digital radio and proposed legislation to allow more low-power, non-commercial radio stations. In the case of digital radio, RAC is lobbying to secure recording artsts a performance right for songs broadcast digitally. Currently, only publishers and songwriters receive performance royalties, but because the advent of digital broadcasting is likely to negatively impact sales of physical product, RAC wants to level the playing field for artists. It also proposes that digital broadcasts be encrypted to slow the capture and propagation of digital broadcasts as downloadable files.

In the case of low-power stations, RAC backs legislation proposed by Senators McCain and Leahy allowing the expansion of low-power radio into urban areas. RAC thinks such expansion will be good for the health of independent music and new music genres, and so is working to help get the bill passed despite opposition from the National Association of Broadcasters.

RAC has also been active in keeping fine increases for performers out of the Broadcast Indecency Act passed by the Senate; supporting the Third Circuit Court’s decision to block the FCC’s new media consolidation rules from taking effect; supporting Sen. Murray’s record-royalty accounting bill (which has been passed and is expected to be signed but no longer includes specific remedies for artitsts); and backing New York Attorney General Spitzer in his settlement with the record labels to distribute $50 million in unpaid record royalties. RAC is monitoring the settlement to ensure label compliance and says it was member Bob Donnelly who originally brought the issue to Spitzer’s attention and gave ideas on how to resolve it.

Perhaps the most compelling issue RAC is currently involved with, however, is Senator Orrin Hatch’s so-called INDUCE Act, which RAC backs as an “incredibly important piece of legislation.” INDUCE is a bill that would allow copyright owners to sue those whose products or businesses may be used to infringe copyrights, under the theory that such products or businesses induce people to infringe. If enacted, the bill would effectively overturn the recent Ninth Circuit Court of Appeals' ruling that P2P developer Grokster and others are not guilty of vicarious or contributory copyright infringement because P2P networks have significant non-infringing uses (upholding the Betamax precedent) and because the decentralized nature of P2P networks doesn’t allow their developers sufficient time to identify and stop infringement (as opposed to the original Napster, which operated an array of central indexing servers).

While RAC’s intent, naturally, is to reduce copyright infringement and restore the financial value of artists’ works, some believe INDUCE is a misguided bill that would actually work to stifle technology developers who might otherwise help the cause of legitimate digital distribution. These critics see the bill as overbroad and anticipate that it would encourage a deluge of frivolous lawsuits.

Nevertheless, RAC sees INDUCE as the right way to go, in that it would allow its members to go after the companies providing the technology to infringe copyrights—the “inducers”—rather than suing individuals—the actual infringers—who also happen to be the consumers who buy RAC members’ products. RAC says it will continue to monitor the situation.