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Association Criticizes Failure To Appeal Music Licensing Ruling

August 7, 2000

The National Restaurant Association is applauding a bipartisan group of members of Congress for opposing the Clinton administration’s decision to side with the World Trade Organization (WTO) on a copyright issue instead of fighting to protect current U.S. law.

Eleven members of Congress, led by Rep. Jim Sensenbrenner (R-Wis.), sent a letter July 27 to the United States Trade Representative expressing disappointment with the decision. The Association is urging the administration to side with the United States and small business, and appeal the WTO ruling.

At issue is a dispute over an exemption for small restaurants and retailers who wish to play only radio and television music in their businesses. In 1998, President Clinton signed the “fairness in music licensing” provisions into law.

Although the U.S. House of Representatives had strongly supported a much more generous exemption, the new law allows restaurants and bars an exemption from music licensing royalty fees if they play radio and television music only and are under 3,750 gross square feet. Small retailers under 2,000 gross square feet may also be exempt. The law also provides a limited equipment exemption.

The law did not change the fact that restaurants, bars and other businesses of all sizes must continue to pay licensing fees when they play compact discs, tapes, music on hold or have live music in their businesses.

Earlier this summer, the WTO sided with the European Communities (EC) and ruled that the narrow exemption for American bars, restaurants, florists, salons and other small businesses denied Irish musicians copyright royalties. Final resolution of this issue will not occur for several months.

”This law came about because Congress recognized that there needed to be some fairness for small business owners who just want to turn on the radio or television in their establishments. It is frustrating that the administration chose to turn its back on hardworking small businessmen and women,” says Association Board of Directors Member Wade Avondoglio (Perona Farms, Andover, N.J.).

Source: Washington Weekly, National Restaurant Association

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