Congressmen: This Is Not a Royalty Increase to Be Tossed Aside Lightly. It Should Be Thrown With Great Force.
by John Paczkowski
Posted on April 30, 2007 at 8:43 AM PT
Looks like May 15 may not become the day that music broadcast over the Internet died. A bill introduced in Congress last week may overturn a controversial royalty-fee increase that Internet radio station operators say would put them out of business. The Internet Radio Equality Act, introduced by Reps. Jay Inslee (D., Wash.) and Don Manzullo (R., Ill.), would invalidate a March 2 decision by the U.S. Copyright Royalty Board (PDF) that essentially applies download service royalty rates to Internet radio stations, threatening to raise them between 300% and 1200% over the next five years. “You can’t put an economic choke hold on this emerging force of democracy,” Inslee said in a statement. “There has to be a business model that allows creative Webcasters to thrive, and the existing rule removes all the oxygen from this space.”
Indeed, according to ‘Net radio advocates, it would strangle the industry in its crib. “If this rate does not change, it will wipe out the vast majority of Web radio,” Tim Westergren, founder of the music discovery service Pandora, told Newsweek. “If this stays, we’re done. Back to the Stone Age again.”
