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| Bill Would Overturn Increase In Internet Radio Royalities
Bill Would Overturn Increase In Internet Radio Royalities
The bill would overturn a decision that would require Internet
broadcasters to pay three times as much as their over-the-airwaves
counterparts for the right to play music.
»www.informationweek.com/story/sh···99202191
By K.C. Jones
InformationWeek
April 27, 2007 12:21 PM
Internet radio broadcasters could get a break from a bill introduced
this week that would lower the rates they pay for playing music.
U.S. Reps. Don Manzullo, an Illinois Republican, and Jay Inslee, a
Washington Democrat, introduced a bill to overturn a Copyright Royalty
Board (CRB) decision that would require Internet broadcasters to pay
three times as much as their over-the-airwaves counterparts for the
right to play music.
The Internet Radio Equality Act, introduced Thursday, could ultimately
impact up to 70 million Americans who, according to Nielson Media
Research, listen to online music stations each month. The bill would
mandate royalty parity for Internet, satellite, and cable radio, as well
as jukeboxes and traditional radio.
The CRB increased royalty rates(PDF) for Webcast music, setting a
retroactive rate of $0.0008 per song for 2006. The rate in 2005 was
$.0007 per song. Under the ruling, announced March 2, the amount is set
to rise to $0.0019 per song by 2010. That -- plus a $500 per station fee
and the elimination of fee schedules that based fees on a percentage of
revenue -- could amount to a 300% for large operations and up to 1,200%
for smaller operations, according to digital media representatives.
"In last few days, we have received hundreds of e-mails from
constituents of ours, who are online music listeners," said Rich Carter,
a spokesman for Rep. Manzullo, in an interview. "I think we're going to
see a massive grassroots interest in this. Hopefully things can come
together quickly on this and we can get it changed."
The CRB's rules are scheduled to take effect May 15, and Internet
broadcasters will be hit not only with an increase in current rates but
a bill for the retroactive fees.
Jack Ward, of SaveNetRadio, the group lobbying against the Recording
Industry Association of America and the CRB ruling, said in an interview
Friday that the increases are "astronomical." He said the bill for the
difference in the old rates and the retroactive hike is one "no small
Webcaster can pay."
The RIAA referred questions about the bill to SoundExchange, which
represents record labels and artists. That orginization said the
proposed legislation would "gut the fair market rates.
"If passed, the bill would also result in a windfall of more than $50
million to mega-corporate webcasters like Clear Channel and Microsoft at
the expense of recording artists across the country," the group said in
a prepared statement. "Because the bill is retroactive, artists would
have to write checks to cover refunds to corporations whose CEOs and top
executives are paid millions of dollars per year."
John Simson, executive director of SoundExchange, said: "The idea that
this bill would help small Webcasters or artists is ludicrous since less
than 2% of all royalty payments in 2006 came from small Webcasters. The
true beneficiaries are the mega-multiplex services like AOL, Yahoo,
Microsoft, and Clear Channel, which will benefit from rates
substantially lower than those set by the Librarian of Congress in 2002."
Reps. Manzullo and Inslee echoed the concerns of Internet music
providers and supporters who have said the increases will bankrupt some
companies and force others to stop streaming on-air programs over the
Internet.
"This Titanic rate increase is simply untenable for many Internet radio
broadcasters," Inslee, a member of the House Energy and Commerce
Subcommittee on Telecommunications and the Internet, said in a prepared
statement. "You can't put an economic chokehold on this emerging force
of democracy. There has to be a business model that allows creative
Webcasters to thrive and the existing rule removes all the oxygen from
this space." |
