NAB, RIAA Were Close on Audio Flag Before Talks Collapsed—Bainwol

Flag negotiations between broadcasters and record labels took place during much of 2006’s first half but broke down and are in limbo, NAB and RIAA executives told us. And they never really included CE. “The talks broke off when RIAA pushed for legislation, which they did not accomplish successfully,” said NAB Exec. Vp Dennis Wharton. This year, all sides have been waiting as the new Congress got organized and made committee assignments, Wharton said. Despite “several offers” by RIAA over the years to negotiate, “the NAB began negotiating with us last year only after being ordered to do so” by the Senate Commerce Committee leadership,” said Mitch Glazier, RIAA exec. vp-govt. & industry relations: “We look forward to meaningful negotiations with broadcasters on an effective solution.”

NAB, which favors private industry talks, had asked RIAA not to pursue audio flag legislation for fear it would delay the HD Radio rollout, RIAA Chmn. Mitch Bainwol confirmed in an Aug. 3 letter to NAB Pres. David Rehr. RIAA gave us a copy of that letter, which Bainwol sent Rehr in an apparent attempt to revive the talks. “As I explained at the time, we could not and cannot make such a commitment,” Bainwol said: “I did communicate to you, and have multiple times, that I would like to solve this issue quickly and privately to the extent possible… I look forward to working together to address issues of content protection that includes preventing the ‘cherry-picking’ of songs in a manner that benefits both of our industries and the listeners of our music over your radio stations.”

Bainwol’s appeals before and since Aug. 3 appear to have carried little weight at NAB. His letter to Rehr opened by expressing frustrations that NAB had walked out of the talks: “We've known each other for a very long time so let me get to the punch line. You can’t be serious. It’s unfathomable to me that an agreement not to negotiate in the press would be stretched into a gag order that prevented us from responding accurately and completely to the Congress.”

In the talks, NAB and RIAA reached “general agreement on the rules related to implementation of an audio flag,” Bainwol told 9 members of the House Commerce Committee in a July 25 progress report, a copy of which RIAA also provided us. Before talks began, CEOs of major record labels and broadcast companies met in N.Y. to hash out the “parameters and goals of the discussions,” Bainwol said. The 2 governing principles agreed to that day, according to Bainwol: (1) Designing “usage rules preventing the disaggregation or ‘cherry-picking’ of songs from surrounding content transmitted over HD radio.” (2) “Ensuring an expeditious rollout of HD radio nationwide.”

Two working groups were formed and met every 3 weeks beginning last April, Bainwol said. One of the groups -- an “Audio Flag Task Force” -- last met May 15, he said. The other -- a “Technical Implementation Working Group” -- last met June 6, he said. Ultimately, NAB and RIAA agreed on all the usage rules proposed by RIAA to the FCC in 2004, Bainwol said. There was disagreement in 3 areas, but those debates were resolved in negotiations or were about to be, he said.

Here’s how compromises on the 3 disputed areas were reached, according to Bainwol: (1) There was agreement that the minimum duration of a recorded block should be reduced from 30 min. to 15. (2) Broadcasters wanted a way to allow listeners to skip back automatically to an ad within buffered or recorded content. Record labels didn’t object, but wanted “to ensure that it can be done in a manner that does not undermine protection,” Bainwol said: “After some discussion, the group agreed that the Technical Implementation Working Group should determine whether it is feasible technologically for listeners to skip back to specific advertisements while accommodating recording company concerns.” (3) Broadcasters wanted functions to label manually recorded material by artist, album or song title information. Recording company representatives suggested a solution that would allow consumer to label their own recorded files, Bainwol said: “Broadcaster representatives agreed to consider the proposal as a compromise solution.”

CEA has refused to join the NAB-RIAA discussions. If RIAA wants to raise a technical proposal on audio flag, it should do that at the Copyright Protection Technical Working Group (CPTWG), CEA has said. RIAA has said it would - if CEA first “agree[s] to discuss appropriate content protection that truly addresses the problem encountered when digital listening services transform themselves into download-like or copy services without a marketplace license for that activity,” Bainwol told Rep. Boucher (D-Va.) in a letter last summer. But CEA has refused on grounds that audio flag discussions should be limited to stopping “mass, indiscriminate Internet redistribution of content” and not take up content cherry-picking from digital radio.