On behalf of the more than 600,000 members of the National Federation of Independent Business (NFIB), I am writing in support of H.R. 789, The Fairness in Musical Licensing Act of 1995, introduced by Representative James Sensenbrenner. The time has come for fairness in musical licensing. Under current licensing agreements, organizations like ASCAP, BMI, and SESAC are allowed to make small businesses pay two, three, maybe four times for music aired on radio or television in public spaces, not to mention compact discs and cassettes. In the case of radio and television, broadcasters have already paid sizable royalty payments to ASCAP and BMI, who represent the artist, to transmit this music. More troubling is the fact that such licensing fees are arbitrarily levied by the music societies and small business owners have virtually no recourse in disputing such rates. One court in New York City is the only place a small business owner can turn if they believe they were treated unfairly by ASCAP or BMI. This is hardly a system fair to small businesses outside of New York City. H.R. 789 constitutes much-needed basic consumer protection that would relieve onerous, expensive, and unnecessary burdens imposed by the current system on small business. More specifically, this legislation clarifies the law by creating an exemption from the payment of royalties to these music societies for incidental music which is rebroadcast over radio and TV, ensures price equity, and provides for local arbitration to resolve licensing disagreements. NFIB members by an overwhelming ninety-two percent have demanded music licensing reform legislation because of the unfairness and injustice in the current system. NFIB members strongly support H.R. 789. We urge you to respond to the calls for fairness from small businesses in your state by supporting this legislation. We look forward to working with you. NATIONAL RETAIL FEDERATION May 7, 1996 The Honorable Jan Meyers Chair, House Small Business Committee 2361 Rayburn House Office Building Washington, D.C. 20515 Dear Chairwoman Meyers: On behalf of the National Retail Federation and the 1.4 million U.S. retail establishments we represent, I would like to express our appreciation to the House Small Business Committee for conducting hearings on the most important issue of music licensing. Small retail companies have long sought relief from the arbitrary pricing, discriminatory enforcement and abusive collection practices of music licensing organizations. Small retail companies are continuously confronted by costly and unreasonable demands from music licensing organizations. These organizations have monopoly power to set rates and, therefore, retailers are frequently asked to pay outrageous and unfair licensing fees to play music which is only incidental to the purpose of their business. Of particular concern is the practice of “double dipping” by music licensing organizations which collect millions of dollars in fees from radio and television broadcasters who pay for the rights to air music, and then use heavy handed tactics to collect a second time from businesses that air such broadcasts. If retailers express concerns about paying these fees, which are arbitrarily set, they are often threatened with lawsuits. The only recourse currently available to retailers in fighting these tactics of the music licensing organizations is to file a costly lawsuit in the federal court for the South District of New York, the single federal court authorized to handle such disputes. The National Retail Federation strongly supports legislation introduced by Congressman Jim Sensenbrenner (R-WI), H.R. 789, that would extend current law to exempt radio or television music from licensing fees as long as the music was purely background or incidental to the main purpose of the business and customers were not charged a fee to listen to the music. This would put an end to the practice by music licensers of collecting exorbitant fees from television and radio stations, and then collecting again from the businesses that carry their broadcasts. The legislation is a modest attempt to level the playing field and bring some fairness into the activities of the music licensing organizations. The World's Largest Retail Trade Association Liberty Place, 325 7th Street NW, Suite 1000 202.783.7971 Fax: 202.737.2849 As the Committee is aware, there have been several direct negotiations between the music licensing organizations and concerned business groups. While the negotiations have yielded some further understanding of the problems associated with music licensing, the retail industry continues to have difficulties with discussions that would allow an exemption from licensing for small businesses based on square footage requirements and the number of speakers located in an establishment. The retail community is extremely diverse and ranges in size from furniture stores, with expansive showrooms, to some specialty shops doing business in a shopping mall corridor. To base an exemption for small businesses based on a square footage requirement of 1500 square feet for retail establishments, as proposed by the music licensers, would allow less than one tenth of NRF's small store membership to take advantage of the exemption. This is unacceptable because it provides no relief for many truly small retailers. Small retail companies across the nation struggle from day to day and make painful decisions on how to reduce expenses in order to survive in today's extremely competitive marketplace. Those decisions should not be made even more difficult or painful by allowing music licensing monopolies to continue to unfairly collect millions of dollars from small businesses. Again, we appreciate the Committee's efforts in examining this extremely important issue. By way of background, the National Retail Federation is the world's largest retail trade association with membership that includes the leading department, specialty, discount, mass merchandise and independent stores, as well as 32 national and 50 state associations. NRF members represent an industry that encompasses over 1.4 million U.S. retail establishments, employs nearly 20 million people, 1 in 5 American workers, and registered 1994 sales of more than of $2.2 trillion. NRF's international members operate stores in more than 50 nations. Sincerely, John J. Motley III Senior Vice President Government & Public Affairs It is stipulated by and between the undersigned parties, by their respective attorneys, that: 1. In lieu of the proposed order attached to the stipulation between the parties dated June 28, 1994, an order in the form attached hereto as Exhibit A modifying the Consent Judgment entered herein against BMI on December 29, 1966, may be entered and filed by the Court, sua sponte and without any further notice to any party, at any time after November 15, 1994, provided that defendant has not withdrawn its motion, which it may do at any time before entry of an order with respect thereto, by filing notice thereof with the Court and serving a copy of said notice upon plaintiff, and provided further that plaintiff has not withdrawn its consent as to all but the modification to Article XIII of the Consent Decree or its position of neutrality with respect to the modification to Article XIII of the Consent Decree set forth in the proposed order, which it may do at any time before the entry of an order granting the relief requested by the movant, by filing notice of the withdrawal of its consent and/or position of neutrality with the Court and serving a copy of said notice upon BMI. 2. In the event plaintiff withdraws its consent and/or position of neutrality, or if BMI withdraws its motion, or if the proposed order granting the relief proposed by the movant is not entered pursuant to this Stipulation, this Stipulation shall be of no effect whatever, the making of it shall be without prejudice to any party in this or any other proceedings, and it shall not thereafter be used in this or any other action, or for any other purpose. |