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Internet Giants Endorse Music Licensing Legislation (EXCLUSIVE)

WASHINGTON — The trade association representing Google, Facebook, Pandora, and Spotify said it is backing proposed legislation to streamline music licensing.

The endorsement of the bill by the Internet Association removes a big hurdle, as previous efforts have gotten tangled in the past by the opposition of burgeoning music streaming services.

Michael Beckerman, the president and CEO of the Internet Association, said with their support, the legislation “now has the backing of the entire music community. This bill builds on the internet innovations driving growth in the music industry to modernize music licensing laws.” He said the 40 members of the organization were “fully committed” to advancing the legislation.

On Wednesday, a group of senators introduced the Music Modernization Act, with the intent of updating music licensing laws to make it easier for songwriters to get paid when their music is streamed or purchased online. The bill is similar to one introduced in the House.

The Music Modernization Act updates music licensing laws to make it easier for songwriters to get paid when their music is streamed or purchased online. Songwriters have been seeking legislative changes for years, pointing out that they have not been receiving fair market value for their works on digital platforms like Spotify and Pandora.

The IA said the current music licensing system is cumbersome, as licenses must be obtained song by song, made even more complicated because a work may have multiple writers. The bill would create a blanket licensing system with a central clearinghouse and administration.

The IA’s complete letter to the bill’s initial sponsors is here.

Other changes in the bill include:

  • In a new standard, mechanical royalty rates will be based on what a willing buyer and a willing seller would negotiate in a free market.
  • Rate courts will be able to consider sound recording performance royalty rates when determining musical work performance royalties for digital services.
  • ASCAP and BMI are now subject to the same two judges presiding over the rate courts that decide songwriter compensation. Under the legislation, each new rate-setting case would be randomly assigned to a federal judge consistent with other federal litigation.

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