New Rules Threaten Internet Radio

Anne Broache from CNET news reports that a Congressional hearing on the
Future of Radio contains some very bad news for smaller radio stations
attempting to compete with satellite providers. According to Edward
Markey (D-Mass) and other critics , a Tuesday ruling by the U.S.
Copyright Royalty Board threatens the viability of small commercial
providers. The proposed changes increase royalties to record companies
by 30%, retroactive to 2006, and each station would have to fork out a
$500.00 minimum payment. According to Markey:

Robert Kimball, the general council for RealNetworks, spoke on behalf of the Digital Media Association and told Congress that if the CRB decision is not overturned, homogeneity will invevitably result. He suggested that a proposed merger between SM and Sirius be postponed until certain biases against internet broadcasters are corrected.

The report cites two instances of such biases. At present, certain programming restrictions apply only to webcasters, including a prohibition against announcing upcoming songs, and the Copyright Act also prohibits net radio from offering its own recording devices and portable radio devices. Neither restriction applies to satellite based stations.

The Radio and Internet Newsletter(see the rates) estimates that the new rates would require webcasters to pay 1.28 cents per listener per hour.

Related Link: Video of the Hearing from the Committee on Energy and Commerce

Related Link: Copyright Board Decision (115 pages, PDF)