If you go to the FCC’ s website, there it is in bold letters, “FCC Grants Petition for Declaratory Ruling of Pandora Radio LLC.” All that aforementioned statement basically means is that Pandora is now the proud owner of a radio station in South Dakota that can broadcast on the FM dial and can take full advantage of paying lower broadcast radio royalties.
Technically Rapid City, South Dakota’s KXMZ was purchased by Pandora Media back in 2013 but the juggernaut streaming service company wasn’t able to broadcast via FM due to a Communications Act law preventing broadcast radio stations from being owned by foreign entities.
This move was also being heavily blocked by performance rights organizations like ascap in attempt to protect songwriters from being short changed by Pandora, which will now look to pay the lower royalty rates offered by ASCAP to companies which own broadcast radio stations and their digital subsidiaries.
While Pandora currently pays the PRO 1.85 percent of revenue, they will now be able to take advantage of the 1.7 percent of revenue offered to broadcast radio platforms.
Consider this decision from the FCC a win for Pandora and loss for songwriters as ascap vehemently disagrees with the FCC’s ruling as the told Billboard magazine, “Pandora has to comply with a number of requirements pertaining to its foreign ownership. It has 90 days to do so; and assuming it does comply with the FCC’s requirements, the FCC will then consider Pandora’s application for permission to purchase KXMZ. In the meantime, ascap will be considering what, if any, additional comments to make, or other steps to take, in light of the FCC’s Declaratory Ruling. Pandora’s purchase of KXMZ is a transparent ploy squarely aimed at paying songwriters even less for online music streams and serves as yet another example of the urgent need for reform of the nation’s music licensing system.”
While the FCC respects ASCAP’s stand on the matter, they disagree with the performance rights company. “With respect to ASCAP’s allegations regarding Pandora’s motivation in acquiring the Station,” the FCC writes, “the Act does not require us to examine the business rationale” of a sale, only whether it runs afoul of foreign ownership law.”
We will continue to watch this closely to see what transpires but as of now, Pandora has the upper hand.