Is the Music Industry Shooting Itself in the Foot (again)?

Big wigs and lobbyists in the music industry have pushing hard to get performance royalties from terrestrial radio stations.  On February 4th, Senator Patrick Leahy, the same Patrick Leahy that introduced the PRO-IP Act last Congress, introduced "a bill to provide fair compensation to artists for use of their sound recordings." (S.379)  The bill would adjust the current legislation that provides performance royalties for digital transmission of music to include all transmissions.  It also includes provisions for special blanket licenses at set prices for smaller radio stations and public broadcast stations. 

In a world where radio is already struggling, is extorting money from radio in an attempt to save the record companies really a great idea?  But suppose this bill does pass and performance royalties are implemented for terrestrial radio, what would happen?  Here is one vision of the future.  Imagine....

Radio stations stop playing music for which they would have to pay royalties.  There is a lot of good music out there now with creative commons licenses that would allow air play without fees.  There's probably plenty more independent musicians who would gladly allow radios to play their music without paying performance royalties.  There is enough music out there, in every genre, that radios could find plenty to play without including the big record labels.  (UPDATE:  just found this out, there is already an internet radio station pretty much doing this, uses only Creative Commons licensed music.)

Radio could refocus on local musicians and stimulate new touring.  And as listeners begin to become familiar with music using creative commons type licenses, they will find out how wonderfully simple these licenses make so many things.  Can I put up a YouTube video using this song?  The license answers.  Can I play this song at my wedding?  The license answers.  And as more creators see other creators using these types of licenses, the use will spread.  Access to culture will be free-ed up in the sense that the rules will begin to be understandable by the masses.

Sure, it would be a bit strange at first, the music would sound a little different (and the oldies stations might have some additional problems), but people would start to get used to the new stuff, the same way they get used and then start to love new songs on the radio now.  The constant playing of the formerly underground music would turn it into the mainstream.  These artists would then have a market for their music.  The technology is there (and many of them currently use it) to sell their music themselves.  The record labels aren't needed in the same way.

Since the radios will be playing the music, the artists won't need the huge publicity teams for which record labels are still relevant.  They will be completely, officially, obsolete.  (Except for hoarding the old catalogues they still manage.) 

... It's nice to dream.