Before Congress adjourned in October of 1998, it passed a major piece of legislation that directly affects songwriters' ability to earn income from their work. The good news is that the Copyright Term Extension means that copyright protection on a work now extends to the life of the author plus 70 years, which is twenty years more than US law previously allowed. This change bring the United States up to the standard rest of the international community, where copyrights have long been valid for life plus 70.
The bad news is that the misnamed "Fairness in Music Licensing" Act of 1998, also known as "the Restaurant Bill" was included as part of the legislation. This unfair law now gives restaurants and small businesses free use songs for their commercial gain. This means that songwriters lose the royalties to which they've historically been entitled while the restaurants profit from the use of our work. The United States is the only country in the world that allows businesses to use songs without paying for them.
The law applies to music that is broadcast over the airwaves and then re-transmitted into small business establishments. Businesses use such music to enhance the ambience of their establishments, which helps them attract and keep customers. Supporters of the legislation argue that the original broadcaster already paid a royalty on the song when it was broadcast, and thus it's not fair to make restaurants pay again. This argument might seem to make sense on the surface, but only to those who fail to understand how songwriters get paid.
Without copyright protection, songwriters would be unable to earn income from their work. Copyright protection gives creators the right to control copying and use of copyrighted works. Songwriters earn income by charging users of songs a small license fee (royalty) for each use of the song. A public performance of a song is one kind of use, and royalties for public performances are the main source of income for songwriters. Because the royalty for each performance is very small, it takes many, many performances of a song for a songwriter to earn any substantial income. It's critical to their ability to earn a living that songwriters be able to collect royalties for each and every use of their songs. This is the only way that songwriters can get paid.
When a business, such as a restaurant, plays a song over a PA system, they are using the song to increase profits. Music is used to enhance the ambience of their establishment, thus helping them to attract and keep customers. The restaurant is a commercial user of music, and needs to pay for the music it uses. It doesn't matter if the source of the song is a CD, a tape, a live performance, or a radio broadcast. What's important is not the source, but the fact that the song is using the song for its commercial gain by broadcasting it over a PA system to customers.
When a restaurant plays music from the radio for its customers to hear, they are re-broadcasting the music from the radio. Although the radio paid a royalty to transmit the song over the airwaves, this royalty does not cover re-broadcasts of the transmission by business establishments. You've probably noticed disclaimers on TV broadcasts of sporting events stating that the copyrighted telecast may not be re-broadcast or re-transmitted. This is because these TV broadcasts are protected by the same copyright law that has always protected songs. However, restaurant owners were able to use their political clout in Congress to push through a law giving them the privilege of royalty-free re-broadcasts of songs at the expense of songwriters.
The average restaurant owner makes around $44,000 per year, according to the National Restaurant Association. The average songwriter makes around $4,700 per year from performance royalties. There's certainly nothing fair about giving restaurant owners free use of our songs. This new law means that Congress has voted songwriters a pay cut estimated to be as much as 15-20% of gross income so that restaurants can avoid paying a fee that averages about $1.58 per day, far less than 1% of their gross income.
Restaurant owners argue that songs are incidental to their main line of business and therefore needn't be paid for. That's a ridiculous argument for a number of reasons. Carpet, light bulbs, and parsley are all items that enhance the environment of restaurants, and these items all need to be paid for. Music is no more "incidental" than these items. Furthermore, atmosphere is a major reason why people choose to dine out at restaurants. If songs weren't important to these businesses, they could simply turn the music off. They know music is important, which is why they lobbied so hard to pass legislation that gives it to them for free.
This law is not only a moral and economic outrage against songwriters, but it also appears to violate the Fifth Amendment of the Constitution of the United States. The Fifth Amendment says that no private property shall be taken for public use without just compensation. This law, however, gives restaurants and small businesses free use of songwriters' copyrighted work, which is intellectual property owned by the writers.
It's also an international trade issue. All other countries that participate in the international Berne Convention on Copyrights require restaurants and small businesses to pay royalties for use of songs. They collect royalties for US songwriters whose songs are performed overseas, and they are outraged that the US has chosen not to reciprocate. Foreign countries are likely to retaliate against the US for the violation of international trade agreements that this law represents.
If you are a songwriters or someone who supports songwriters right to earn a living, you should write, call, FAX, and/or email your US Congressperson and your two US Senators to express your outrage over the passage of the so-called "Fairness in Music Licensing" Act, which is so clearly unfair.
More information on this issue can be found on the websites of NSAI, ASCAP, and BMI.