Earlier this month the Copyright Royalty Board (CRB), which
reports to the Library of Congress, increased the charges which
internet radio stations will have to pay in order to broadcast
music. Stations claim that the charges in many cases represent more
than their total revenues, and that they make it impossible to
build a business out of online radio.
The CRB is answerable to Congress, and two members of the House
of Representatives have proposed a law which would withdraw the
CRB's recent ruling and propose a compromise system of
payments.
Internet radio activists say that the system is unfair because
it penalises online radio stations unduly. Broadcast radio pays no
royalty fees, they say, while satellite radio pays far less than
internet radio's new charges.
The new law will charge the same fee to radio stations whether
they are provided via satellite, cable or the internet. It will
offer stations the chance to choose to pay 7.5% of their revenues
or 33 cents per hour per listener.
The bill was introduced by Democrat Jay Inslee and Republican
Don Manzullo.
"Since the CRB's decision to dramatically and unfairly increase
webcaster royalty rates, millions of internet radio listeners,
webcasters and artists have called on Congress to take action,"
said Jake Ward of lobby group SaveNetRadio. "Today Congress took
notice, and we thank Mr. Inslee for leading the charge to save
music diversity on the Internet."
Speaking this month to OUT-LAW Radio Joe Kennedy, chief
executive of Pandora, one of the internet's largest radio-style
services, said that the threat to online radio was severe.
"The judges adopted the proposal to triple the rates for large
webcasters, and for small webcasters it's actually closer to a 12
times increase in the rates that they pay," said Kennedy. "It's an
extraordinary increase in the rates that will effectively kill
internet radio as we know it today."
"Over 90% of internet radio will simply be gone. The net result
will be a huge loss of diversity, a huge loss for music artists and
a loss of virtually all of the internet radio that exists," said
Kennedy.
"You can't put an economic chokehold on this emerging force of
democracy," Inslee said, according to CNet News. "There has to be a
business model that allows creative webcasters to thrive and the
existing rule removes all the oxygen from this space."
