August 17, 2004  ·  Tim Wu

Witness the Copyright Gap in its full majesty. In the UK, Digital Radio has been live at the BBC for about three years now. As the BBC says, “Digital Audio Broadcasting gives you far greater station choice, better reception & clarity of sound with no re-tuning.”

Yet meanwhile, in the country that invented both the radio station and the transistor, digital radio is stuck. Among other problems, the FCC is contending with the RIAA’s arguments that, absent proper controls, digital radio would be “the perfect storm” for the music industry. Digital radio, the RIAA believes, must be prevented from causing the “enormous damage wrought by peer-to-peer piracy.” On Monday, the RIAA filed a new letter reiterating that the �threat” from digital radio is “real and imminent.”

In addition, anyone who wants to run a digital radio-station through the network as opposed to broadcast is at an immediate disdvantage over those who stay analog or terrestial. A 1995 Act mandates that digital broadcasters pay an additional license fee (for sound recording copyrights) above and beyond the usual fees due ASCAP or BMI. That puts network radio, the technology of the future, at a cost disadvantage. And who gets those extra fees? You guessed it — the RIAA.

So next time you�re wondering why radio isn’t any better: its not the technology that’s the problem.

  • JonBuck

    So much for innovation. As long as stuff like this keeps happening, the United States will lag behind nations with less restrictive copyright laws.

  • Fred von Lohmann

    A minor correction. Digital audio broadcasters do NOT have to pay any additional royalty to owners of sound recordings (i.e., RIAA member companies). The terrestrial broadcasters, working through the powerful NAB, managed to get themselves exempted from the digital performance right in sound recordings when broadcasting, whether analog or digital. See 17 USC 114(d)(1)(A). If an FCC technology mandate is adopted, then digital broadcast technology will be impaired vis-a-vis its analog counterpart.

  • Javier

    Fred: could you please explain the terminology? What is the difference of Terrestrial broadcasters vs Non Terrestrial broadcasters in regards of Digital Broadcast transmission vs Analog Broadcast Transmission?

    Correct me if I am wrong, but I think you are making a difference here between Webcasters and the traditional broadcasters. Am I right?


  • n o s i l A

    Terrestrial broadcasters are ones that use FCC allocated spectrum (e.g. AM, FM radio bands) to broadcast their programming. Digital radio (aka IBOC) would fall under this definition, I believe, but webcasting wouldn’t.

    Now the US standard is a little different from the UK standard for digital radio. The proposal here is to allow traditional broadcasters to use extra portions at the fringes of their ordinary FM or AM allocation to transmit in digital. The maximum bitrate available in this hybrid mode is around 100kbps. So the statement that it “gives you far greater station choice, better reception & clarity of sound with no re-tuning” isn’t entirely true for the US. At least in the near term, only existing broadcasters would be able to transmit digital radio. Each station is tuned individually like regular FM. The coverage area for digital is smaller than analog due to lower power levels, and the codecs they use aren’t a huge win over FM quality.

    The issues holding back digital radio right now aren’t copyright related. When the FCC issued an NPRM about digital radio a few months ago, the copyright question was but a brief mention in an NOI portion, which means it’s on a much slower track than the technical adoption. There are serious technical issues to work out, like AM nighttime operation, effect on LPFM stations, interference issues, etc. There are a few other non-copyright policy questions, such as should broadcasters be required to simulcast their regular FM audio, and should they be able to charge for extra services.

    I’m not thrilled that the copyright question is even being raised, but it’s not true that “it’s not the technology that’s the problem”

  • Thomas Hawk

    I attended a talk by some folks at Microsoft Reseach re: mylifebits in February where they discussed a PVR radio that they had put together and had been testing. The technology definately exists. We should have it today. Recordable radio along with a corresponding guide should be built into Microsoft’s Media Center Edition software.

  • Tim Wu

    Thanks Fred. Corrected.

  • Doug Lichtman

    Tim -
    This seems a little one-sided, doesn’t it? RIAA is right, after all, that digital broadcasts do pose a greater piracy threat, especially in a world where peer-to-peer continues to thrive. You rightly emphasize that digital radio also delivers a greater payoff: it would be great to have a radio station delivered over the Internet, tailored to my tastes, and so on. But smart policy has to balance these two concerns.

    So, yes, it is not the technology that’s the problem; but duh. The problem always comes in figuring out how to account for the harms and benefits of new technologies. To focus only on the benefits is unfair to the music industry which has good reason to worry about the harms as well.

    And besides, isn’t a blanket license a great compromise from your perspective? Isn’t that the likely result here, as Fred notes above?

  • Adina Levin

    A blanket license is certainly more straightforward for digital radio, where the license-payers are broadcasting companies, than for individual users of p2p.

    A blanket license for filesharing would need to bill millions of individuals, or place a tax on all network users, based on some sort of sampling.

  • Rob

    I have yet to be convinced that I should feel any sympathy for the poor benighted music “industry”. At this point I don’t care if they are harmed, go out of business or whatever. The industry has lost sight of its role in the promotion of art and culture and is instead merely concerned with its own profits. It is of no material benefit to society and I will not mourn its passing, if indeed all its prophecies of doom were to actually be realized. Music will still be created and we will still be entertained.

  • Raoul

    Everyone with an internet connection should be able to webcast a stream of music, of their choice, without ever having to pay anyone anything. I know this thread is dealing with digital broadcasts but with wifi and other technologies we should be able to have webcast broadcasts available everywhere. The world is changing. Evolution at its finest, adapt or face extinction.

    The world can have 7 billion radio stations but the old money interest do not want that.

    “The issues holding back digital radio right now aren�t copyright related. “

    LOL! The reason why we cannot move forward is because the old money has to ensure they get paid. Period. Old money broadcasters and old money copyright holders. Admittedly, with some governmental bureaucracy thrown in. However, such bureaucratic sluggishness is partially to be blamed on the lobbyists.


    Makes absolutely no sense whatsoever. The idea that if one can record a digital song from digital radio will allow one to make that song available on a P2P network is laughable. That song is already available on the P2P networks. I can get on the web right now and download any song I want. The threat to the RIAA is already at 100%. There is no additional threat. Their companies now offer ZERO added value to the equation. Deadmen walking. It’s over. They should just crawl away and die gracefully.

    Additionally, the term piracy is again being misused.

    United States Code
    Title 18. Crimes and Criminal Procedure
    Part I. Crimes
    Chapter 81. Piracy and Privateering
    � 1651. Piracy under law of nations


    The crime of piracy, as defined by the law of nations and the Acts of Congress, consisted of robbery or forcible depredation upon the sea. U.S. v. Chapels, C.C.Va.1819, 25 F.Cas. 399, No. 14782.

  • Kristin Thomson

    Thanks as always for a provocative post. I’m usually a just a reader but thought I could contribute to this one.

    Tim is right that the rollout of DAB is much farther along in Europe, UK and Asia than here in the US, but I’d say this is fundamentally less a copyright issue and more a licensing issue.

    As mention in other posts, currently the terrestrial broadcasters in the US do not pay a performance royalty. That means when you here Patsy Cline singing “Crazy” on the AM/FM radio, the songwriter Willie Nelson is paid via ASCAP/BMI, but the performer Patsy is not. But if you hear “Crazy” on XM, Sirius, Music Choice (on cable TV), or on a webcasting station, both Patsy and Willie are paid — Willie by ASCAP/BMI and Patsy by SoundExchange. And to correct what I think Tim was saying in the last sentence of his post, this money is not paid to the RIAA. 45 percent of the SoundExchange royalty goes DIRECTLY to the performer — not filtered through the record label where it might be subject to “creative accounting” or posted against back debts. 50 percent goes to the record label, which may or MAY NOT be an RIAA-member label. (Remember that there are thousands of independent record labels that are also participants in the music industry in the US). The remaining 5 percent goes to back-up performers via a fund administered by AFM/AFTRA.

    The terrestrial broadcasters in the US have avoided paying this performance royalty for decades because they have said that the record labels and the performers have benefited from the promotional value of radio airplay, which increases record sales. But in the Europe and UK, there is a performance royalty on terrestrial radio. I assume that this has had an impact on the rollout of DAB since there are fewer issues related to establishing content protection controls since performers, songwriters, labels, and creators can not only benefit from the rollout of a better version of radio that allows for more programming, a better sounding signal but also can see this as a reliable (albiet small) revenue stream.

    This has become a copyright control issue in the minds of many because a performance license doesn’t apply to terrestrial broadcasters in the US. So if this DAB rollout could include an effort to harmonize the performance royalty in the US, not only across media forms (webcasting, satellite radio, etc.) but also get the US in line with UK and Europe as far as payments to artists, some of these copyright control/broadcast flag issues might subside, and we’d all be able to benefit from the emergence of DAB.

    FMC filed comments and reply comments about the transition to DAB in the FCC proceeding, which are downloadable from this page .

  • Tim Wu

    Kristin’s point is a good one. Licensing systems and other royalties-systems can be useful frameworks for innovation. They are, in another lingo, liability schemes that make it clear what the costs of opening a copyright-dependent business will be.

    However, Kristin, I don’t think that it is a lack of a performance royalty for terrestial analog radio in the US that is holding back digital radio. It is the lack of a clear system for licensing copyrights in general for businesses that need them.

    One proposal, from the 1930s, was to eliminate “property remedies” in copyright, to be replaced with liability remedies. It’s a proposal worth reconsidering, as it might force more bargaining. If, for example, the only remedy against Napster were damages, we might be closer to a settlement of the war in online music.

  • Fred von Lohmann

    Says Doug Lichtman: This seems a little one-sided, doesn�t it? RIAA is right, after all, that digital broadcasts do pose a greater piracy threat, especially in a world where peer-to-peer continues to thrive.

    Nope. The RIAA is entirely mistaken in its proposition that digital broadcasts pose a greater “piracy threat.” As documented in extensive detail in EFF’s submission to the FCC on this point, there is no credible evidence that digital broadcasts pose a greater threat than analog FM (the content on each is identical by FCC mandate), or cable music services, or any other broadcast source. The quality, the content, the ability to “disaggregate”, and the “capturability” are all effectively the same.

    Now the existence of P2P may have increased the risks to copyright owners from all of these broadcast mediums. But there has been no showing that digital radio broadcast is special in this regard.

  • Doug Lichtman

    Fred -
    I know that the EFF makes that claim, but it does not ring fair or true. I guess I do not see the point of pretending that the other side is completely wrong. That allows for punchy posts, but it does not really help move the ball forward.

    And Tim -
    If we move to a system where there are only cash remedies, in essence the government is setting the price for music. I thought copyright was a property right for precisely the opposite reason: we want people to negotiate in the market, not the court room.