The Digital Media Association, National Public Radio and a group of small commercial webcasters filed a joint petition seeking an emergency stay of a recording royalty rate increase imposed on webcasters by the Copyright Royalty Board (CRB). Last week’s filing with the U.S. Court of Appeals for the D.C. Circuit was prompted by concern that pending bills in Congress to repeal the rate increase may not be brought to a vote in either chamber by July 15, the day on which initial payments are due under the newly increased rates.
In its petition formally requesting that the court delay the implementation of the rate increase, the petitioners contend that the treatment of small webcasters and public radio webcasters, as well as the CRB royalty rates themselves, are “arbitrary and capricious.”
As previously reported on AcousticMusicScene.com [The Future of Internet Radio May Hinge on Royalty Rates Issue, May 9 – posted in News-U.S. National, Acoustic Radio Waves and on the Home Page], many independent artists have come to rely on online radio to gain exposure for their music that they would not otherwise get through commercial broadcast radio. But just how many webcasters (primarily nonprofits or small organizations) will be playing music in the near future — and the diversity of styles that will be heard — may well depend on the outcome of the currently raging battle royale over Internet royalty rates.
In an effort to prevent what they foresee as the demise of Internet radio and the stifling of diverse and independent musical voices, U.S. Reps. Jay Inslee (D-Wash.) and Don Manzullo (R-Ill.) introduced a bill on April 26 known as the Internet Radio Equality Act. The bill would nullify the CRB decision that would significantly raise the rates that webcasters pay to copyright holders for streaming songs. A companion bill has been introduced in the U.S. Senate by Sens. Ron Wyden (D-OR) and Sam Brownback (R-KS).
Branding this “a Titanic rate increase [that] is simply untenable for many Internet radio broadcasters,” Inslee, a member of the House Energy and Commerce Subcommittee on Telecommunications and the Internet, maintains “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.” To date, Inslee and Manzullo have enlisted more than 100 co-sponsors for their bill.
Jake Ward, a spokesman for the SaveNetRadio coalition, said “we are hopeful that the motion for an emergency stay will afford the Internet radio industry crucial time to [reargue its] case.” He expressed confidence that “Congress will continue to give the Internet Radio Equality Act the attention it deserves with the urgency it requires… SaveNetRadio and the millions of webcasters, artists, and listeners we represent urge the Court to give this motion full consideration.”
SoundExchange, the sole administrative entity designated by the U.S. Copyright Office (which appointed the three-judge CRB) to collect and distribute performance royalties that are owed artists and labels by webcasters, views things differently. It decries the proposed legislation as “a blatant attempt to strip artists and record labels of their hard-won royalties for the use of their sound recordings on Internet radio.” In a news release issued last month, John Simson, its executive director, said that the Internet Radio Equality Act will give more money and power to the big operators in the webcasting industry rather than helping small webcasters and artists.
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