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"Parity" is the new "neutrality" - July 29, 2008

When it comes to radio-like music services, everyone, it seems, is in favor of "platform parity." Or nearly everyone. The record companies are all for parity. They want all types of "radio"--AM/FM, satellite, cable, Internet--to have a "level playing field" with respect to performance royalties and copy-protection standards. SoundExchange, which collects digital performance royalties from Internet broadcasters, also wants parity. So, too, do Internet broadcasters like Pandora and Live365. Artists and songwriters are all over it. What's not to like about parity? It's about treating everyone equal. It's democratic. It's fair-minded. It has 12 essential vitamins and minerals.

Too bad no one can agree on what it means. In Washington telecom circles, "platform parity" has become this season's "network neutrality": Everyone claims to be for it, they all want to bake into legislation or regulation, but it means different things depending on where you sit.

The only group that seems certain on what it means is AM/FM broadcasters, but only because they're firmly against it. They still enjoy a sweet deal dating to the early days of radio that exempts them from paying performance royalties on sound recordings (they do pay songwriters) and they see no reason to start leveling that playing field.

At a Senate Judiciary Committee hearing Tuesday on "Music and Radio in the 21st Century," at which no broadcaster testified, it was parity all around:

• Geffen Records exec VP/GM Jeffrey Harlston said it's time for Congress to "update the law to ensure that the playing field upon which [radio services] compete is as level and fair as possible." By which he means, AM and FM stations should start having to pay performance royalties to record companies for the music they play on the air, just as Internet, cable and satellite services must. He also wants all of them to be required by Congress to design their services to prevent listeners from recording music as they listen to it.

• Pandora CEO Joe Kennedy was all for parity between Internet and over-the-air radio so long as it means that Internet services can pay a lower royalty rate than required currently under their statutory license--not exactly what Harlston had in mind by a "level playing field." To Kennedy, "parity" also means Internet services should not be burdened with "technological mandates" regarding copy protection when over-the-air broadcasters carry no such burden.

• To SoundExchange executive director John Simson, "parity" means Pandora and its kin should stop whining and pay up because the widows and orphans of hardworking American musicians depend on performance royalties from their love-ones' recordings. I kid you not. He also wants AM and FM stations to start paying, too.

• Five for Fighting lead singer John Ondrasik was in Simson's corner on Internet services, while indie singer/songwriter Matt Nathanson wanted to cut them some slack because they're good for indie artists. Both naturally called for "parity."

I could go on but you get the picture. "Parity," like "neutrality," is in the eye of the beholder.

The witnesses' prepared testimony is available here.
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