House and Senate Seek to Save Net Radio
House and Senate Seek to Save Net Radio
House and Senate Seek to Save Net Radio

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    Senator Wyden, joined by Senator Brownback, today introduced a bill designed to nullify the Copyright Royalty Board's recent ruling, which raises music licensing fees precipitously and threatens to put a lot of webcasters out of business.

    The bill, called the “Internet Radio Equality Act of 2007,” first throws out the Board's rulings from this year. Second, the bill changes the standard by which the Board sets fees, making it more like the standard used to set rates for satellite radio services. The bill then temporarily sets the rate at either a third of a cent per hour of music per listener, or 7.5% of the webcaster's revenue. That's the (much lower) rate that satellite radio pays. The Copyright Royalty Board will set rates under the new standard after 2010.

    Third, the bill lets noncommercial broadcasters pay lower rates for their webcasts of sound recordings. Currently, the law lets noncommercial broadcasters pay a statutory licensing fee to songwriters and visual artists, but not to record labels. A temporary fix was introduced in 2002, but expired in 2004. The proposed bill sets a temporary rate for these sound recordings at a 5% increase over the 2004 levels, applied retroactively to 2005 and lasting through until 2012. If noncommercial webcasters have already paid the labels more than they would have under this fee in the meantime, that money is credited against future payments.

    Last week, Representatives Inslee and Manzullo introduced a similar bill in the House. The current incarnation of the House bill also requires a reports from three different bodies (the NTIA, the FCC, and the Corporation for Public Broadcasting) on how Internet radio licensing fees affect the marketplace.

    The resources mentioned by Alex do a good job of explaining this in further detail.