SoundExchange Possibly Overstepping Its Bounds With Illegal Lobbying

It looks like internet radio's favorite fee-collection organization, SoundExchange, might be playing hard and fast with legal limits on how it can spend collected money. Not on the list of three kosher uses (full legal mumbo-jumbo post-jump) is lobbying and PR. But Listening Post's Eliot Van Buskirk noticed that it appears to be engaged in both.

Under Section 114(g)(3) of the Copyright Act, it's only allowed to use the money for

(A) the administration of the collection, distribution, and calculation of the royalties;

(B) the settlement of disputes relating to the collection and calculation of the royalties; and

(C) the licensing and enforcement of rights with respect to the making of ephemeral recordings and performances subject to licensing under section 112 and this section, including those incurred in participating in negotiations or arbitration proceedings under section 112 and this section, except that all costs incurred relating to the section 112 ephemeral recordings right may only be deducted from the royalties received pursuant to section 112.

Yet, it's a member and financier of the musicFIRST coalition (fairness in radio starting today), a PR group which aims to end the "free ride" regular radio stations get by not paying performance royalties (satellite radio already does and net broadcasters might soon).

Despite my lack of a law degree, I'm pretty sure none of musicFIRST's activities are listed in those provisions. But organizations connected to the music industry specialize in creative legal interpretations (they represent artists after all), so I'm sure there's a perfectly good explanation for that. [Listening Post]