Can I play the radio at work without paying music licensing fees?

January 24, 2012

Dear Music Lawyer,

Can I play the radio at work without a public performance license from the performing rights organizations?

—Brit

Dear Brit,

Probably.

Without a doubt, legally playing music at a coffee shop is a much easier to accomplish by turning on the radio than by playing CDs or MP3s (which I covered in my last post). The reason is because certain business establishments are exempt from public performance licensing under the Fairness in Music Licensing Act of 1998 (FMLA). Under the FMLA, certain small business establishments (less than 2000 square feet if a non-food or drink establishment and less than 3750 square feet for food and drink establishments) can play audio music from radio without having to pay a public performance licensing fee if the following conditions are met:

(1) the radio station is licensed by the FCC (N.B.: Internet and pirate radio are NOT licensed by the FCC and therefore do not fall under the FMLA exemption);

(2) the transmission of the music does not extend beyond the establishment;

(3) the establishment does not charge admission for listening to the music (i.e., no cover charge); and

(4) the transmission of the work is licensed by the copyright owner (i.e., the radio station has the right to publicly perform the works).

Some restaurants and bars with gross square footage of 3,750 square feet or more may also qualify for the exemption. Under the FMLA, these larger establishments are exempt from music-licensing obligations when they play radios if they meet the above conditions and they have no more than six speakers total, with no more than four speakers per room.

Therefore, in the case of your coffee shop, if the gross square footage is less than 3,750 square feet, then you are free to turn on the radio for your customers without paying licensing fees to ASCAP, BMI, and SESAC. If the gross square footage is more than 3,750 square feet, then you will need to restrict the number of speakers as set forth above. Bear in mind that gross square footage includes all interior and adjoining outdoor space used to service guests, including the kitchen space, bathrooms, closets, etc., but it does not include the parking lot (unless the parking lot is used for a purpose other than parking).

Not surprisingly, the FMLA was strongly opposed by the performing rights organizations (PROs) who claim that the Act exempts 75-80% of bars and restaurants from paying licensing fees. Also unsurprising is that the National Restaurant Association and the National Beverage Licensing Association lobbied heavily for the FMLA's passage.

An interesting consequence of the FMLA is that the United States has reportedly had to pay millions of dollars in fines for alleged violations of its international treaty obligations. For more information on the status of the World Trade Organization dispute, click here.

—Amy E. Mitchell