Keeping Music on Internet Radio

April 30, 2007

Congress Copyright Royalty Board Corporation for Public Broadcasting CPB CRB Internet radio Internet Radio Equality Act National Public Radio NPR rates RIAA royalites royalty rates SoundExchange webcasters webcasting

On March 2, 2007, the Copyright Royalty Board (CRB) released a decision that dramatically increases royalty payments owed to rights holders for streaming sound recordings of music over the Internet. The new royalty rates announced by the CRB are retroactive to January 2006, and they are so high that they threaten to shut down many, some fear most, webcasters. They go into effect May 15, 2007. (Update: The CRB has changed the deadline to July 15, 2007.) The CRB’s decision also eliminates the distinction between noncommercial and commercial media, and it requires complicated record-keeping that places a huge burden on stations, most of whom (including WDAV) do not have the necessary information to keep such records. If allowed to stand, the CRB decision seems certain to drastically curtail the diversity of music programming now found on the Web, and it will have a negative impact on public radio’s ability to bring new and culturally enriching programming to the American public via the Internet. It also sets a chilling precedent for future rights discussions, negotiations and litigation that may undermine non-commercial public service programming. But the last chapter in this story hasn’t been written, and there is a way you can make a difference. On April 16, 2007, the Copyright Royalty Board rejected all requests by all parties, including NPR’s, to rehear the March 2nd decision. So now, Congress is getting involved. On April 26, 2007, Reps. Jay Inslee (D-WA) and Donald Manzullo (R-IL) introduced the “Internet Radio Equality Act” (H.R. 2060) which nullifies the CRB’s ruling and proposes to replace the onerous new royalty rate structure with a rate of 7.5 percent of stream-based revenue for commercial webcasters. Non-commercial webcasters will pay a rate that is 1.5 times their 2004 rate. Further, the bill seeks to ensure that public broadcasters/webcasters will be treated differently from commercial broadcasters/webcasters in the future by placing public broadcasters/webcasters’ royalty determination within Section 118 of the Copyright Act where other noncommercial royalties such as ASCAP and BMI are covered. At this point, because WDAV is a relatively small player in the streaming world, we are not facing catastrophic fees. However, we will have to pay more than we did before this new ruling. And should the CRB ruling stand, it is almost certain that WDAV’s ability to continue to grow on the Internet will be seriously thwarted. The “Internet Radio Equality Act” will preserve our ability to reach you via the Internet with the best service possible, and it will ensure fairness for all the stakeholders involved. You can voice your support for the “Internet Radio Equality Act” by getting in touch with your Congressman and asking him or her to co-sponsor H.R. 2060. More information is available at SaveNetRadio.org. Get a copy of the Bill.