

Recording industry tells federal regulators the proposed merger shouldn't be approved unless the combined satellite radio providers pay "fair market" royalties and do more to protect their content.



In comments filed with the Federal Communications Commission on Monday, the RIAA urged the agency to "make clear that its approval of a merger is conditioned upon the continued protection of sound recordings from unlawful infringement."

Under copyright law, separate licenses exist for the "performance" of a song and for the recording or "distribution" of it. Satellite and Internet radio broadcasters (unlike traditional radio) are already required to pay performance-based royalties.

But the RIAA said it's concerned that both satellite radio companies have invested in technologies that allow them to shortchange artists on the distribution side "by giving users the ability to download copyrighted sound recordings to portable devices, effectively transforming a radio-like service into a digital distribution subscription service like Rhapsody or Napster."

A merger could bolster those investments and "seriously threaten the viability of the music industry as a whole," the RIAA wrote. The group also called on the FCC to require the merged companies to pay higher royalty rates in general to the record industry, arguing the firms are "no longer new, struggling companies" that can get away with paying what it called "below-market rates."

The RIAA has already earned some U.S. senators' blessings this year for a bill that would impose new limits on the broadcasters, including a requirement that they cloak their streams with copy-protection technology, but the proposal hasn't gone anywhere yet.

XM and consumer advocacy groups that have come to its defense insist that the devices in question don't violate copyright law because they operate within a listener's home recording and fair use rights.

The RIAA's comments came on the final day for submitting comments about the public-interest implications of the XM-Sirius deal in general. As of this blog post, more than 5,000 comments had been posted to the FCC's online database. According to a press release distributed Monday afternoon by a firm representing the radio companies, more than 3,500 of those comments came from individuals supporting the deal.

The FCC is still accepting comments for at least another month on a more specific question: whether, if it finds the XM-Sirius deal is hunky-dory for the public, it should waive a decade-old rule prohibiting a single operator from controlling all of the satellite radio spectrum.

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