have said that such a license was unworkable. However, SESAC, the smallest of the three licensing societies, has recently announced that the technology to monitor which songs stations play, and thus the ability to charge them for only what they play, has long been available. On the second issue, many AHORA members, as well as other Spanish-language broadcasters have begged and pleaded with the major societies for their lists of Spanish titles and composers. However, the music societies refuse to respond. It is not in their best interest to furnish the catalogs of their repertoire lists. It would not do to release the lists of licensed Spanish language compositions because that would enable Spanish-language stations to "shop around" between the music societies. Under the inequitable status quo, each society gets a percentage of each station's revenues no matter how much of that society's repertoire is publically performed. This provides each society with guaranteed income no matter how much inventory it sells. That is a pretty good deal for them. This brings us to our third point, the distribution of funds to the proper publishers and authors. Informal surveys have shown that among all Spanish-language radio stations, about 8 to 10 million dollars are paid annually to the societies. From further investigation, only about 25% to 30% of that figure can be accounted for as payments to Spanish-language composers and publishers. Because the money is not kept separate, there is no accountability. What happens to the remainder? A poll by AHORA members of local Latin music composers whose music has been aired during any given period indicates that very little, if any, money ever gets into the hands of those local composers. Moreover, AHORA stations note that the licensing societies rarely, if ever, audit stations operating under blanket licenses to see whose music is being played; the indication being that there is no effort to account for who is entitled to royalties. And on further investigation, many local Latin music composers themselves never even heard of the licensing societies and have no notion as to how to join one and take advantage of the payments made by radio stations. If The conclusion of all this is that the performing rights societies in the United States are operating in a vacuum, on their own with nobody to protect the interests of the Spanishlanguage station operator and composer. The current societies protect the interests of their longtime general market members and the hierarchy which has been created over the years. stations fail to pay the percentage of revenues, the societies are quick to file copyright infringement actions. It is interesting to note that ASCAP "promotional" material for Spanish stations stresses the liability of non-payment, rather than the benefits of payment. If the money paid by Spanish-language stations is not going to composers of Spanish-language musical compositions, why should we have to be licensed by these societies. It is the opinion and hope of AHORA members that Congress launch an investigation into all of these disparities and inequitable practices of the performing rights societies. Moreover, AHORA would propose that radio stations be allowed to pay their licensing fees into a trust fund while this investigation is being carried on. Thereafter, the money from the trust can be dispersed in whatever equitable fashion is determined. The United States of America is the only country in the world in which more than one music licensing society is permitted to exist. This is in keeping with our free-enterprise system. However, that system breaks down if stations are forced to pay blanket licenses to all three societies without the ability to shop for the best bargain and take advantage of the competitive market. Moreover, in the case of composers of Spanish-language works, the free-enterprise system is also not working because they are being deprived of payments for their compositions. AHORA proposes several remedies. First, Congress should launch a formal and full-scale investigation of the industry to ferret out and correct all inequities. During said investigation radio stations would continue to pay their licensing fees into a trust fund. Second, a system of "Pay For What You Play" should be imposed. New technology allows for an exact monitoring of what songs stations play, thus making this system workable. Third, the music licensing societies should be required to make their repertoire lists available to broadcasters. Fourth, music societies should be prohibited from co-mingling funds paid by Spanish-language broadcasters. These funds should be kept separate and distributed only to those composers utilized by said broadcasters. Mr. HUGHES. Your organization, Mr. Gomez, brings a rather unique and, I believe, invaluable perspective to our issues. Have you ever considered setting up a Spanish music performing rights society? Mr. GOMEZ. Yes, we have. We have discussed it many, many times. Mr. HUGHES. Is it practical? Mr. GOMEZ. Probably not. For us, we have discussed it, and there are too many negatives. We would prefer to work through the current system, but it is just not fair to us. But that is a distinct possibility, Mr. Chairman. There is still discussion about it. Mr. HUGHES. What suggestions do you have, then, if that's not a practical reality, to improve the amount of information available to stations that play Hispanic music? Mr. GOMEZ. Well, I think the alternative or what we would like is to pay for only what we use, and that all of the moneys that we do pay go to Hispanic composers. That's basically our position. Mr. HUGHES. Ms. Meloy, would you explain the concept of weighted hours a little more? Ms. MELOY. Weighted hours differ from music played. When we say 17 percent of the music is ASCAP, we mean 17 percent of actual total music played. When you go into weighted hours, if for instance, we play a piece that is 3 minutes within that hour, the whole hour, weighted by day-part to approximate revenue, is considered toward ASCAP. The other thing that happens is, Mr. Chairman, if a piece-and we do play very long pieces, as you can imagine, on a classical station-starts at, let's say, quarter to 11, and ends at 5 after 11, then both the hour that it started and the hour it completed is considered an ASCAP hour. After weighting, those are what are called weighted hours. Any time a piece of ASCAP music is played, it triggers a weighted hour. Mr. HUGHES. I see. If you cannot determine whether ASCAP has a particular piece in its repertoire, how do you make a determination that it's covered? Ms. MELOY. At this point in time, Mr. Chairman, we cannot. We play what we feel is just appropriate for the music station and for the listening audience. However, again, as we stated, such things as Rachmaninoff's piano concerto, which at one time, they stated was in the public domain, they are currently claiming, and it is very difficult for us even to judge, because of the different results which we have gotten from ASCAP directly. Mr. HUGHES. Mr. Atsinger, a while back, religious broadcasters filed an antitrust suit against ASCAP, called Alton Rainbow. That suit was settled, back in 1984. Mr. ATSINGER. Yes. Mr. HUGHES. How is that suit relevant to the issues before the committee today? Mr. ATSINGER. Well, I think it demonstrated that an antitrust remedy for users that feel that they have not been offered a reasonable alternative-that the antitrust road or remedy simply is not a practical one, and does not exist. I was not directly involved at the time that those broadcasters initiated that action. It was made a class action. So because it was elevated to a class action, some of our stations would have been included. But we were not active in initiating that suit. Since my involvement with the committee, I have suggested that we try to work through the rate court, and try to use the existing mechanism and see if we can't get some relief in that direction. That seemed to be more practical. It hasn't proved to be much less expensive. It's my understanding that the television interests have expended over $10 million with the first suit that was ever decided in that court to determine what a fair fee is. That was decided 43 years after this court was established as a safety valve-well, some of that balance that you talked about yesterday. It was originally thought that if a court were established, and users could apply to that court, that would provide some balance and some relief. The fact of the matter is, ASCAP has worked with this system for 40-plus years. They understand it far better than the users do. It's in their backyard. They know the ropes and they are very, very good at litigation. It's an unlevel playing field with particularly a small user group like us. And if an individual station owner tried to apply, that would be impossible. If a group of even 400 stations tried to go to the rate court, which we are doing, it's very, very challenging. If we can build upon the record that the TV industry created after 10 years and $10 million, which still isn't over, we would have a chance. We hope we can. Even the Radio Music License Committee, which is far larger than our committee, could probably not sustain the kind of litigation expenses that would be required to go to the rate court. So when we say that ASCAP specifically has circumvented the provisions of the consent decree, they have learned how to neutralize it, they've been pretty good over the last 43 years, and we still do not have a usable per-program license. You asked Mr. Gomez if it would be practical to set up a Hispanic music licensing society. I would submit that it would be, if there were usable per-program licenses available from the other organizations. Because if not, and he set up his music licensing collective for Hispanic stations, all he would do is create another organization that the Hispanic stations would have to pay. They would not decrease their ASCAP or BMI fees, for all of the reasons I outlined. First of all, the stations can't determine, because ASCAP and BMI won't cooperate, who controls what music. But beyond that, the license that they offer, the per-use or per-program license, is not a practical license for the limited user of their product. They have the weighted hour concept, which is really a little more complicated than we've discussed here. That results in-a generalization would be this. If 20 percent of your music, for example, was ASCAP music, you could very easily pay as much as you would pay under the blanket license. So there is no real incentive to find alternate sources of licensing. Most stations just take the blanket license. |