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Music licensor seeks to block Pandora from running a radio station

Application just a 'bargaining chip' in fight for lower royalties

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Updated The American Society of Composers, Authors and Publishers (ASCAP) has filed a petition with the US Federal Communications Commission (FCC) to block Pandora from running a terrestrial radio station, claiming that to allow the streaming music service to do so would not serve the public interest.

Pandora acquired the radio station in question – Box Elder, South Dakota's KXMZ-FM – in June, and has been operating it under a local programming and marketing agreement with the FCC since the tenth of that month.

But according to ASCAP's complaint, Pandora failed to meet FCC requirements that it disclose its full ownership and demonstrate that it meets the agency's rules about foreign ownership of radio stations.

"Moreover, Pandora's acquisition of KXMZ would not serve the public interest," the petition states. "Pandora's public statements lay bare its plot: to use KXMZ as a bargaining chip in Pandora's quest to obtain lower royalty rates for its online music streams."

The streaming service has certainly made no bones about why it sought to purchase the station. For months, Pandora has been battling it out with ASCAP over what it claims are discriminatory license fees that wrongly advantage traditional, terrestrial broadcasters over internet ones.

Even some of Pandora's online competitors have been able to pay the Radio Music License Committee (RMLC) rates because their parent companies also own traditional radio stations, Pandora assistant general counsel Christopher Harrison wrote in a June editorial at The Hill.

"This acquisition [of KXMZ] allows us to qualify for the same RMLC license under the same terms as our competitors," Harrison wrote.

But ASCAP argues in its petition to the FCC that flouting music-licensing rules is not a legitimate motive for operating a radio station.

"Pandora is acquiring KXMZ for use as a bargaining chip in its ongoing dispute with ASCAP over performance royalty rates," the petition claims, "not because Pandora wishes to undertake an 'obligation to provide programming responsive to the needs and interests of the residents' of Box Elder, South Dakota, the Station's community of license."

ASCAP isn't the only one that questions Pandora's claim that its royalty payments should be lower, either. In June, the surviving members of famed psych-rock outfit Pink Floyd argued in an open letter that while Pandora paints itself as a victim, it has actively lobbied Congress for an 85 per cent reduction in music royalty payments, something the Dark Side of the Moon rockers described as an "artist pay cut."

"You don't hear grocery stores complain they have to pay for the food they sell," the Pink Floyd members wrote. "Everyone deserves the right to be paid a fair market rate for their work, regardless of what their work entails."

ASCAP's petition asks the FCC to reject Pandora's application for a terrestrial radio license on the grounds that its application is "defective" and that "Residents of KXMZ's service area will be left to suffer the consequences of a licensee who has no desire or intention to serve their local needs."

It's unclear how long the FCC might take to weigh ASCAP's request. ®

Update

Late on Monday a Pandora spokesperson responded to The Reg's request for comment, saying, "We are reviewing the filing and will respond per the standard procedure. We have confidence in the process and strongly believe in our legal position. Our purchase of KXMZ will better serve the community by offering a broader selection of music and artists customized to local tastes. We look forward to providing an enhanced listening experience to the community."

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