This legislation, titled the American Music Fairness Act of 2025, amends federal copyright law to establish a public performance right for sound recordings played on terrestrial radio. It extends the existing statutory licensing framework, previously applicable primarily to digital audio transmissions, to encompass all audio transmissions, thereby requiring terrestrial broadcasters to compensate artists and copyright owners for the use of their sound recordings. The bill mandates that Copyright Royalty Judges (CRJs) initiate proceedings to determine fair royalty rates and terms for these nonsubscription broadcast transmissions, with initial rates effective through 2028 and subsequent reviews every five years.

A key provision introduces special, significantly reduced annual royalty fees for small terrestrial broadcast stations, ranging from $10 to $500, based on their revenue and eligibility criteria, to protect smaller entities from undue financial burden. These specific small broadcaster rates, however, are explicitly excluded from being used as evidence in general rate-setting proceedings. Additionally, the bill modifies royalty distribution for direct licenses between copyright owners and transmitting entities, stipulating that 50 percent of such royalties must be paid to the designated collective for distribution to featured and nonfeatured artists.

Furthermore, the Act clarifies that its provisions will not adversely affect the public performance rights or royalties of songwriters or copyright owners of musical works. It also directs the Copyright Royalty Judges, when determining royalty rates for terrestrial radio, to consider economic, competitive, and programming information, including the potential promotional value of radio play in enhancing or substituting for sales of phonorecords.