The American Music Fairness Act (SB326) would amend title 17 to grant and regulate the public-performance right for sound recordings when transmitted via terrestrial broadcasts and similar audio transmissions. It redefines terms to remove digital-only language and expands the existing license framework to cover terrestrial radio, while establishing a timetable for royalty-rate proceedings and new protections for small broadcasters.
The bill also creates a royalty-distribution framework, clarifies that songwriters’ rights are protected, and instructs how the value of promotion is to be considered when setting rates and terms.
At a Glance
What It Does
The bill expands the public performance right for sound recordings to include terrestrial broadcasts and other audio transmissions, and it broadens the existing licensing framework accordingly. It also redefines key terms to focus on 'audio transmissions' rather than digital-only references and sets up a mechanism for rate-setting and royalty collection.
Who It Affects
FCC-licensed terrestrial radio stations, public broadcasting entities, and other transmitting entities eligible for statutory licensing, as well as sound recording copyright owners, performers, songwriters, and music publishers.
Why It Matters
This creates parity between broadcast radio and other listening platforms by ensuring compensation for the use of sound recordings, while providing relief for small broadcasters through a targeted royalty schedule and a structured rate-proceeding cadence.
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What This Bill Actually Does
The American Music Fairness Act would, if enacted, change how sound recordings are compensated when they are played on radio and similar audio services. The bill expands the public performance right to cover terrestrial transmissions and internet services that deliver audio, codifying this in the existing framework of title 17.
It also removes some of the digital-specific language that previously limited how these rights were applied to terrestrial broadcasts and related transmissions. In practical terms, this means record labels, performers, and songwriters could receive royalties when their recordings are broadcast on traditional radio and comparable services.
The legal mechanics get updated across several sections. The 106(6) definition would reflect that performing a sound recording publicly occurs via an audio transmission, while section 114(d) would broaden the license to cover terrestrial broadcasts.
The bill also introduces a new, formal process to determine royalty rates for nonsubscription broadcast transmissions, with an explicit timeline and a cadence for revisiting those rates every five years. Definitions and cross-references are harmonized to ensure a consistent, non-digital-centric approach to royalties and transmissions.To ease the burden on small broadcasters, the act creates a tiered royalty structure tailored to revenue and public-broadcast status, with explicit caps (e.g., $10, $100, or $500 per year depending on revenue and category).
The act also provides a distribution mechanism: a nonprofit collective designated by the Copyright Royalty Judges would receive a portion of royalties and distribute them according to statutory rules, ensuring that receipts are allocated to rightsholders in proportion to existing distributions.Crucially, the bill includes protections to avoid harming songwriters’ rights and specifies that the value of promotion can be considered when setting rates and terms. The overall design aims to balance fair compensation for artists with the practical realities of smaller radio operators, while anchoring governance in a transparent, regulable process.
The Five Things You Need to Know
The bill expands the public performance right for sound recordings to include terrestrial broadcast transmissions.
It redefines 'audio transmission' and removes certain 'digital' qualifiers across title 17 definitions and sections.
It introduces a tiered royalty schedule for small terrestrial broadcasters based on revenue and public status.
It creates a rate-proceeding framework that begins soon after enactment and recurs every five years.
It directs that 50% of certain royalties be paid to a nonprofit collective designated to distribute statutory licensing receipts.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title and table of contents
This section designates the act as the American Music Fairness Act and lays out the table of contents, signaling the broad policy shift toward equitable treatment of sound-recording performances in terrestrial and related broadcasts.
Equitable treatment for terrestrial broadcasts and internet services
Sec. 2 broadens the performance right for sound recordings to include audio transmissions and expands the existing statutory license to cover terrestrial broadcasts. It also modernizes definitions by inserting a broad 'audio transmission' concept and removing onerous 'digital' qualifiers, aligning transmission concepts across sections to ensure terrestrial broadcasts and related services are treated consistently.
Timing of proceedings under sections 112(e) and 114(f)
This section adds a new provision ensuring royalty-rate proceedings for nonsubscription terrestrial transmissions begin promptly after enactment and establish a five-year cadence for reconsidering rates. The framework ties royalty payments to determinations by the Copyright Royalty Judges and aligns timing with the broader rate-setting process.
Special protection for small broadcasters
Sec. 4 creates a tiered royalty-rate scheme for nonsubscription terrestrial transmissions, with explicit caps and eligibility criteria based on station revenue and ownership structure. It also requires a certification process by January 31 each year for eligible stations and outlines how the revenue test is calculated. The aim is to shield small operators from outsized licensing costs while maintaining fair compensation for rights-holders.
Distribution of certain royalties
Sec. 5 updates how royalties are distributed when licenses apply to transmissions. It introduces a specific mechanism whereby a portion of receipts is paid to a nonprofit collective designated to distribute royalties, with distributions proportional to existing royalty-distribution rules. This clarifies who benefits from statutory licensing and how the funds circulate to the rights holders.
No harmful effects on songwriters
This provision explicitly states that nothing in the Act or its amendments will adversely affect public performance rights or royalties payable to songwriters or copyright owners of musical works, preserving core songwriter protections amid the broader changes.
Value of promotion taken into account
Sec. 7 directs the Copyright Royalty Judges to consider economic, competitive, and programming information — including whether usage of a station’s service substitutes for or promotes the sale of recordings — when determining rates and terms for terrestrial broadcast stations. The clause ensures that promotional benefits are weighed alongside revenue and audience dynamics.
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Explore Economy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Sound recording artists and copyright owners (labels, performers, and songwriters) obtain royalties for terrestrial broadcasts and related transmissions.
- Independent and smaller broadcasters that qualify for the special-rate tiers benefit from lower royalty costs relative to larger operators.
- Public broadcasting entities receive rate protections under the special-tier framework, preserving viability while facilitating compliance.
- Nonprofit collectives designated to distribute statutory licensing receipts gain a formal, regulated role in royalty flows.
Who Bears the Cost
- Large commercial terrestrial broadcasters and networks face higher, non-subscription royalty obligations compared with current licensing frameworks.
- Transmitting entities that participate in the statutory license may see changes to rates, terms, and administration under the new tiers and proceedings.
- Administrative and compliance costs rise for rights-holders and payors due to new procedures, reporting, and distribution requirements.
- If rate proceedings produce higher royalties, the broader music ecosystem (investors, advertisers, and platforms) could feel indirect cost pressures.
Key Issues
The Core Tension
Should rights-holders receive full parity for terrestrial broadcasts now, even if that raises costs for small broadcasters and introduces new administrative layers, or should the system prioritize gradual, scalable parity with robust safeguards for small operators and revenue certification?
The bill’s trade-offs hinge on balancing artist compensation with the cost burden on broadcasters. Expanding rights to terrestrial transmissions closes a gap between traditional radio and digital platforms, but the small-broadcaster protections may limit revenue recovery for rights-holders.
Additionally, the governance around rate setting — including the five-year cadence and the designated nonprofit distributor — introduces administrative complexity and potential disputes over distribution formulas and eligibility certifications. Finally, the measure leans on regulatory processes (Copyright Royalty Judges and regulation of the distribution collective) that will require careful implementation to avoid delays or inconsistencies in royalties.
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