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.
Here’s what I’ve written to Rep. Sue Myrick:
I write to urge you to support this bill: 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. Public stations serving the Charlotte region–WDAV and WFAE–would be greatly harmed by the Copyright Royalty Board’s ruling to increase internet rates. The action destroys the value of access, including the ‘little guys,’ and would make a mockery of the value of this new technology and its service. My 89 year-old mother can only hear WDAV over the internet and she loves it. I hope you’ll be a co-sponsor and urge others to get behind this important legislation. Thank you. John Clark
It would not be the end of the world for WDAV fans if this happens. We will still have the radio.
True, WDAV will still be broadcasting over the airwaves in spite of what happens to Internet radio…at least for the foreseeable future. But there are a few things to consider here.
First, WDAV has a number of listeners these days who listen to us exclusively over the Internet. We got an email from a listener just this morning asking for CD recommendations because he can only get us online and misses us when he’s in his car. Most of these listeners are in the Carolinas, but there are many who are in different parts of the U.S. as well as those who reside in other countries.
As a public broadcasting service, it’s part of our mission to provide quality, meaningful programming to as many people as possible. The Internet has proven a wonderful way to do just that. Not only are we able to share our classical music mix, but we’re also able, through programs like Carolina Live and The Main Street Sessions, to showcase our local talent to anyone anywhere in the world. What a shame these new rates effectively clamp down on our and other broadcasters ability to provide this wonderful programming to the global public.
And back to Mr. Burns’ point that WDAV listeners will still have the radio (at least those in the coverage area)…It is not a safe assumption that the folks who want to collect these royalties, namely the Recording Industry Association of America (RIAA), will stop at charging Internet radio stations. They have already made noises about going after traditional terrestrial broadcasters. Traditional broadcasters do not pay royalties on sound recordings because many years ago Congress decided radio provided considerable promotional value to the record labels. But now, with the recording industry in decline, RIAA is going after every penny they can get. And were WDAV to have to pay similar rates for our on-air service, we’d be in serious trouble.
So, this is an issue worth following for a number of reasons.
I support the Internet Radio Equality Act, but do not feel that my letter to Ms. Myrick would have any influence as she has repeatedly voted for whatever is good for business (usually big business) since that is where her support comes from.
If this administration follows form it will attempt to uphold the decision of the CRB and Ms. Myrick will “stay in line” with her Washington “minders.”
Sorry to be so cynical on this topic. Hopefully, I am wrong and the administration will see this as an opportunity to garner some public support, especially since they must realize they lost the entertainment establishmen and well as the “thinking public” that enjoys public radio years ago.
FYI. At last count, 52 representatives had signed on as co-sponsors of the Internet Radio Equality Act. That’s good support, but the legislation stands a better chance if number of co-sponsors is around 100. As of this writing, neither Rep. Myrick or Rep. Watt have joined the co-sponsor list.
“It would not be the end of the world for WDAV fans if this happens. We will still have the radio.”
That’s easy for YOU to say! My area doesn’t have a station that plays much classical music and I depend on WDAV’s internet stream.
I used to listen to Pandora regularly until the regulation kerfluffle blocked it for listeners outside the US. Now I use Last.fm, and although I quite like it, it would be nice to officially have the option of Pandora once more…
Nice good blog!