Verizon Ring Tones Hit Sour Note for ASCAP

A court rejects ASCAP's lawsuit seeking royalties for public playing of ring tones on mobile devices.

A federal court has rejected an American Society of Composers, Authors and Publishers bid for additional royalty fees on musical ring tones. ASCAP, which once demanded royalties from Girl Scouts for singing around a campfire, contended that wireless carriers such as Verizon and AT&T are liable for direct and secondary copyright violations whenever phones ring with a musical tone in public.

Under a licensing deal with ASCAP, carriers already pay 24 cents per ring tone in royalties. ASCAP was seeking additional royalties for its artists and performers by claiming ring-tone downloads between carriers and customers and the subsequent playing of those ring tones constitute a public performance and are fair game for royalties.

Wireless carriers countered that "Section 110(4) of the Copyright Act ... exempts public performances undertaken 'without any purpose of direct or indirect commercial advantage,'" according to an Oct. 15 analysis by the Electronic Frontier Foundation.
ASCAP has sued both Verizon and AT&T over the matter. In an Oct. 14 ruling in the Verizon case, U.S. District Judge Denise Cote (PDF) of the Southern District of New York sided with the carriers.
"Despite the accusation that Verizon enjoys revenue from publicly played ring tones, Verizon makes no revenue from the playing of ring tones, in public or elsewhere," Cote wrote in her ruling. "It makes revenue from selling ring tones, and it already pays a mechanical licensing fee in connection with those sales."
Cote also ruled that "customers do not play ring tones with any expectation of profit."