Lawmakers propose reversal of Net radio fee increases
By Anne Broache
http://news.com.com/Lawmakers++propose+reversal+of+Net+radio+fee+increases/2100-1028_3-6179627.html
Story last modified Fri Apr 27 05:56:04 PDT 2007
A bill introduced in Congress Thursday aims to overturn a controversial
royalty fee increase that Internet radio advocates say threatens to cripple
their
services.
The "Internet Radio Equality Act," introduced by Reps. Jay Inslee (D-Wash.)
and Don Manzullo (R-Ill.), would invalidate
a March 2 decision by the U.S. Copyright Royalty Board
that calls for raising royalty rates paid by Net radio operators.
"You can't put an economic chokehold on this emerging force of democracy,"
Inslee said in a statement e-mailed by a spokeswoman. "There has to be a
business
model that allows creative Webcasters to thrive and the existing rule
removes all the oxygen from this space."
The bill's introduction comes less than two weeks after the CRB
declined to reconsider most of its decision
. Small Webcasters, National Public Radio, Clear Channel Communications and
others had filed petitions for a rehearing. Some have indicated they are
considering
filing an appeal of the rules in court.
If it were to stand,
the CRB's existing ruling (PDF)
would result in fee increases on Internet radio operators ranging from 300
to 1,200 percent between 2006 and 2012, according to a group called
SaveNetRadio,
which has been lobbying Congress for relief.
Specifically, the rules call for rate increases of .08 cents per song per
listener retroactive to 2006. They would also climb to .19 cents per song by
2010,
which amounts to a 30 percent increase per year. Each station would also
have to hand over a minimum $500 royalty payment under the ruling.
The congressmen said they had already received more than 1,000 e-mails and
letters opposing the decision.
In addition to repealing that regime, the new House bill offers a
compromise: It would set the rate at 7.5 percent of the Webcaster's revenue
"directly
related to" its transmission of sound recordings, or 33 cents per hour of
sound recordings transmitted to a single listener. It would be up to the
Webcaster
to decide which model to use. That rate would also apply to satellite and
cable radio operators, Inslee's office said in a statement.
The proposal drew applause from SaveNetRadio, whose members include Internet
radio listeners, Webcasters and artists.
"This bill is a critical step to preserve this vibrant and growing medium,
and to develop a truly level playing field where Webcasters can compete with
satellite radio," said organization spokesman Jake Ward.
The bill also calls for public radio broadcasters to submit a report to
Congress on how to determine rates for their class of services. Andi
Sporkin, NPR's
vice president of communications, called that idea a fair solution that is
consistent with more than 30 years of copyright law, which "has recognized
that
public radio has a very different mission from commercial media and cannot
pay commercial-level royalty rates."
Representatives for SoundExchange, the nonprofit entity that collects the
fees and lobbied for the royalty rate changes, said they were still
reviewing
the bill and had no comment on Thursday.
The organization in the past has defended the CRB's decision as an
appropriate way of ensuring artists are adequately compensated when their
work is broadcast
over the Internet.
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