The U.S. Court of Appeals for the D.C. Circuit has denied an emergency stay sought by the Digital Media Association, National Public Radio and a group of small commercial webcasters to block a recording royalty rate increase imposed on webcasters by the Copyright Royalty Board (CRB).  

“This situation is grave, but that makes the message all the simpler and more serious,” maintains the SaveNetRadio Coalition in an action alert posted on its Website (savenetradio.org) today.  The coalition is encouraging its supporters to call their U.S. Senators and Representatives to urge their support for bringing the Internet Radio Equality Act to the floor for an immediate vote. 

 “Unless Congress acts by July 15th, the new ruinous royalty rates will go into effect on Sunday, threatening the future of all Internet radio,” the coalition maintains.  July 15 is the day on which initial payments are due under the newly increased rates.  Sound recording royalty fees paid by webcasters are slated to rise by 300-1,200 percent, effective that day and retroactive to last year.

In its petition formally requesting that the court delay the implementation of the rate increase, the petitioners had maintained that the treatment of small webcasters, public radio webcasters and 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 as a key way of gaining exposure for their music that they would not otherwise get via 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 (H.R. 2060) 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 (S.1353) has been introduced in the U.S. Senate by Sens. Ron Wyden (D-OR) and Sam Brownback (R-KS).

 “The coalition believes strongly in compensating artists, but Internet radio as we know it will not survive under the new royalties,” according to a statement posted on its Website. 

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.”  John Simson, its executive director, contends 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.