Tech groups slam peace deal between broadcasters, record labels

The deal would settle a long dispute between NAB and RIAA about performance royalties. The parties have fought over whether AM and FM radio stations should have to pay performers when they air their songs. Broadcasters are not subject to such a fee, which applies to satellite and Internet radio. 

Broadcasters have said a new fee could bankrupt radio stations. Record labels pointed to unequal treatment with Internet and satellite radio. 

Over the course of the long dispute, the RIAA and the NAB have each pushed separate legislation and publicity campaigns to slam the opposition. So it could be viewed as a breakthrough that radio stations and record labels are nearing a proposal on how to make amends.

But the possible deal revealed this month did not sit well with cell phone manufacturers. The pending proposal would mandate royalties on broadcasters — but limit them — while requiring phone makers to include FM receivers on every cell phone. That provision is designed to help radio stay relevant as technology changes.

Six tech trade groups spoke out against the possible deal in a letter to the House and Senate judiciary committees on Monday. 

“Calls for an FM chip mandate are not about public safety but are instead about propping up a business which consumers are abandoning as they avail themselves of new, more consumer-friendly options,” the letter said. 

The letter was signed by the Consumer Electronics Association (CEA), the wireless group CTIA, the Information Technology Industry Council, the Rural Cellular Association, TechAmerica, and the Telecommunications Industry Association. 

The groups said the receiver mandate would raise consumer cell phone prices. It also said that the NAB and RIAA lack expertise in cell design. 

Supporters of the FM receiver idea say it would have public safety benefits.

“Day in and day out, local radio stations serve as a reliable lifeline in times of crisis and weather emergencies,” said NAB executive vice president for communications Dennis Wharton. “In an increasingly mobile society, it would be unfortunate if telco gatekeepers blocked access to public safety information offered by free and local radio.”

CEA’s chief executive, Gary Shapiro, pointed to light-weightedness and battery life as cell features that could be compromised by the proposal.

“Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do,” he said.

Broadcasters disputed the negative characterization of their industry.

“Countries around the globe have added radio-enabled cell phones that are increasingly popular with consumers. The reality is that 239 million Americans tune in to free and local radio every week, and seven million new radio listeners we’re added just last year,” Wharton said. 

The possible deal would need a congressional blessing to take effect. Lawmakers have been divided over the NAB-RIAA standoff for years, but its unclear whether they would see the proposal as a viable solution.

The FM receiver idea has garnered some support outside this proposal, with backers who say it benefits public safety by allowing messages to get to people’s cell phones in times of emergency. Sixty members of the House sent a letter to the Federal Communications Commission last year advocating for the technology, citing safety concerns.

Backers also argue that consumers might enjoy it, that it would be cheap on a mass scale, and that it could possibly provide new revenue sources for the cell phone industry.

Updated at 3:48 p.m.