Must the Senate Butt In?
by Tibor R. Machan
As I do my frequent working trips around Europe, I often listen to webcasts from various good radio stations. I am especially fond of one that offers all piano jazz, all day round, with just a few ads.
There is a persistent message, though, that the management airs, having to do with a bill in the US Senate that aims to establish what its promoters call Internet Radio Equality. One Rep. Jay Inslee (D-WA) has introduced one in the House that would reportedly overturn a recent ruling that requires webcasters to pay a flat rate per song streamed, rather than the traditional percentage of their revenue.
The website about this bill reports that something called "the Copyright Royalty Board recently raised rates on Internet webcasters, who will soon face greatly-increased fees for streaming music on their stations." It goes on to state that when this occurred it "affected not just Internet broadcasters but noncommercial groups like NPR, and the broadcasters filed an appeal of the decision earlier this month, but were denied." The management of the piano jazz station to which I listen so loyally urges listeners to call their senators and leave messages urging the passage of the Senate version of Jay Inslee’s bill so they can continue to offer the music they feature without what they fear will be onerous fees.
Not being an expert on the ins and outs of copyright law regarding the use of recorded music by radio stations, I am not about to try to figure out the legal intricacies of the matter at hand. I do however have my doubts that this, as so many other issues in our country, requires the federal government to enter the fray and make yet another cumbersome law.
In particular, I believe that the way music can be featured by radio stations and webcasters could be decided by way of contracts between the composers, producers, and the stations (or their representatives). The idea that radio stations shouldn’t be billed in line with what the producers are willing to settle for as they use the music they want seems bizarre to me—after all, how are all those engaged in working to produce the music the radio stations are using going to make a living? They cannot go to their gas stations, dentists, grocery stores, and such and insist that the goods and services they want be provided to them free of charge or even at some set low price. Market forces will play the major role in coming up with the prices and we should know by now that fixing them by some central authority is a very bad idea both in the short and the long run.
Admittedly there are complications. The history of intellectual property is confusing. Just consider public libraries that lend out books to people in their neighborhood nearly free of charge. How does that help compensate the authors, editors, publishers, and sellers of these books or magazines the libraries provide? Yet the practice of stocking these books in libraries and making them available to readers is a very old one and seems not to have destroyed literature and scholarship. Even apart from that, millions of books and other reading materials are circulated among readers once they have been purchased by some one individual or organization.
When the dentist subscribes to People or TIME, all those in his or her office can read it without having to pay for it again and again and there appears to be no movement afoot to bring this to a halt, nor does it appear to have caused the destruction of the magazine industry.
True, it could be argued that just because we don’t detect the destruction it doesn’t follow that it isn’t there. In the spirit of Frederick Bastiat’s famous insight that often the economic consequences of destructive policies aren’t seen—a tax may well lead one to forgo the purchase of a vital automobile tire, which then can lead to a deadly crash but will not be connected to the tax—perhaps there would be a lot more writing and composing going on if people would be required to pay for what they consume. Or perhaps they wouldn’t consume these things in the first place if they would have to purchase them. It is difficult to know.
But isn’t there a principle that should guide our thinking about all this? After all, the producers, creators did invest part of their lives and resources in bringing these goods and services to market, so why should they not have a chance to bargain for a good return on their investment? Why should radio stations and webcasters be authorized to serve their costumers without having to meet the terms of their suppliers?
I am not sure about the answer but I am doubtful that I will call my Senator to insist that the bill enabling radio stations and webcasters to avoid having to meet the terms of those who supply them with the product they transmit. This despite how much I enjoy receiving their webcasts of fine music. I think some accommodation needs to be reached wherein all the parties can bargain freely and reach an un-coerced resolution of the controversy.
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