House Judiciary Chairman Pushing for Stay of Internet Music Fees (Sep 28, 2002)

In a surprise move, the chairman of the House Judiciary Committee introduced legislation Thursday that would push back the date webcasters are supposed to begin paying for music streamed over the Internet.

Rep. F. James Sensenbrenner, R-Wis., introduced the one-paragraph bill that would postpone the payment date for six months. Sensenbrenner and his staff did not give an explanation for introducing the bill, but a staff member said he expects the full House to vote on the measure Tuesday.

"It's a surprising development considering how productive our discussions with webcasters have been," a Recording Industry Association of America spokesman said.

The webcast royalty rate has been a controversial measure since it was set by the U.S. Copyright Office's Copyright Arbitration Royalty Panel last year. Since then, Librarian of Congress James Billington Jr. has cut the rate in half, and both the RIAA and webcasters have filed court cases appealing the rate. Billington set a rate in June that requires webcasters to pay copyright holders 70 cents per song for every 1,000 listeners.

The RIAA and the webcasters have diametrically opposed reasons for filing their appeals. The RIAA contends the rate is far too low, while webcasters contend that the rate is so high it will destroy their nascent business.

Delaying the royalty payment deadline for six months would "promote fairness and support small businesses," Sensenbrenner said.

The legislation will allow for the appeal of the royalty rate to run its course, a pair of lawmakers supporting the bill agreed.

"I want to commend the chairman for taking this important step in averting the detrimental effects of the Oct. 20 payment deadline," Rep. Rick Boucher, D-Va., said. "For thousands of Internet radio providers who are providing diverse musical programming to consumers via the Internet, the tortured webcasting CARP proceeding made real many of the obstacles in copyright law I have been actively trying to remedy. This is a necessary measure at this time for saving from certain shutdown thousands of small businesses and Internet radio webcasters who legally offer music listening services. I applaud the chairman's introduction of this measure and urge my colleagues in the House and the Senate to act quickly and support this measure -- before Internet radio providers must pay a highly disputed retroactive royalty payment."

John Jeffrey, executive vp corporate strategy at Internet radio company Live365, applauded the bill as a step in the right direction. "The unintended consequence of the royalty rate ruling is to choke all independent webcasters or those not affiliated with the funding from large media conglomerates," he said.

In fact, Jeffrey was set to take that sentiment one step further today. In his role as general counsel for Live365, he was ready to file a motion requesting a stay on any payment until an appeal of the rate is heard.

"This will give the librarian an opportunity to stop the Oct. 20 payment," Jeffrey said. "We are asking the court to ask that the payment not occur until the judicial action has been concluded."

His underlying hope is that a closer examination will stop the payment entirely. "It (would) cause irreparable harm to the entire business of Internet radio, which we believe if permitted to grow will represent a positive benefit to the entire music industry and its artists," Jeffrey said.

The new CARP will start in January, and Jeffrey and many other webcasters see it as an opportunity to discuss alternatives to the current situation.

"All along, we've been willing to pay a fair digital sound recording performance royalty," Jeffrey said. "But as it stands, we believe the royalties we're being asked to pay will be used to build up the (recording industry's) SoundExchange. Yet, despite that and their deeper pockets, these royalties are not levied on terrestrial radio."

From Kurthanson.com

That means that, for supporters of Internet radio, the time to act is TODAY!

In our midday edition of "RAIN: Radio And Internet Newsletter," we've got easy, step-by-step instructions on how YOU can contact your representative in the U.S. House of Represenatives, get the right legislative aide on the phone, and voice your support for HR 5469.

This bill is good for consumers, for broadcasters, for webcasters, for artists who benefit from Internet radio airplay, and even (although they may not be willing to acknowledge it) for labels.

The new edition of RAIN is available online right now at http://www.kurthanson.com

And for listeners, we've got a revised "Save Internet Radio" home page up at http://www.saveinternetradio.org.

Sincerely,

Kurt Hanson
Publisher
RAIN: Radio And Internet Newsletter

P.S. Lightningcast has once again set up a fax system for Internet radio supporters to easily send a "personalized" fax, with all the relevant details, to their specific Congressmen. The URL is: http://www.broadcastpromotions.net/carp/hr5469/

From live365.com

Over the past seven months, we have been actively fighting the performance royalty rates (DSRP) as determined by the Librarian of Congress.

Yesterday, a new bill was introduced in the US House of Representatives that would allow for a six month stay on the DSRP royalty rates.

This is HUGE, in that it permits an opportunity for Congress or the courts to remedy the unfair royalty!!!!

But we must act quickly. Because without it, Independent Webcasting will be bankrupted and silenced.

I know you're tired of hearing about this stuff. But we need to blow this out on the order of the CARP effort last spring!

Please contact your U.S. Representatives before September 30, 2002 and ask them to support H.R. 5469.

Visit this link for how you can impact the future of Internet Radio:

http://www.live365.com/carp/hr5469.html

Tell your friends. Pass this email on to your mailing lists. Spread the word. We have until Monday, September 30th.

Thank you for your attention to this important matter.

kind regards,

betty ray
live365 senior editor

Dear Live365 Activists -

----------------------------------------------------------
BROADCASTERS - EDUCATE YOUR LISTENERS
----------------------------------------------------------

http://live365.orbitjuice.com

If you want to create your own to add to this library for others to use, please do! Just send me a 56kbps file (at mailto:liveeditor@live365.com). If you include any music, BE SURE you created it yourself, or own the copyright or have a license. It's not enough to have purchased the CD.

Check here for updates and additional links: http://forums.live365.com/viewtopic.php?t=1193

Thank you for your urgent attention to this matter. We have until Monday, September 30 to take advantage of this opportunity. The fate of Independent Webcasting is truly in the balance.

More From kurthanson.com

How you can help:

Because this bill is scheduled to come to the House floor for a vote on Tuesday, the time to show your support of this bill is today!

(1) Identify your Congressman Look up the phone number of the Washington, DC office of your representative in the House of Representatives via the Congress.org website here: (A) Type your ZIP code into the first box on the page. (B) If necessary, use the form at the bottom of the next page to find your nine-digit ZIP code. (C) Under the photo of your "Rep.," click the "info" link.

(2) Call and ask for the right person Ask to speak with "the legislative aide in charge of Internet and copyright issues." Learn his or her name. Explain that you're a constituent - i.e., you live or work in the Congressman's district.

(3) Ask for their support "I'm calling to urge you to support HR 5469 next week - the bill that would prevent Internet radio from being shut down on October 20th. (It will be up for a vote on Tuesday.) As you probably know, the CARP process was a total failure. Both copyright owners and webcasters are unhappy with the decision. This bill would postpone the CARP decision for six months so that both sides can have time to have their appeals heard in the Court of Appeals."

(4) Add personal insight Talk about how the CARP decision affects you as a small businessperson and/or a listener. Mention the great Internet radio stations we've already lost (Entercom stations, smaller-market Clear Channel stations, SOMA FM, free KPIG, etc.). Mention the new artists you've discovered and the CDs you've purchased thanks to Internet radio. And make sure they understand the difference between Internet radio and peer-to-peer download services like Napster - they're totally different! ("Napster bad (maybe)! Internet radio good!")

(5) Ask for a commitment Offer to leave your number if they have any questions. If they're noncommittal, ask if you can call back on Monday to see what they've decided. In the unlikely event that your Congressman's aide is unfamiliar with the bill or needs a copy, feel free to point them here (or simply download the Adobe Acrobat file yourself and e-mail it to them):

http://www.kurthanson.com/documents/SENSEN_089.pdf/

Now send a fax, too!

Another way to communicate your message is to use the automated fax system Lightningcast has prepared: http://www.broadcastpromotions.net/carp/hr5469/

One simply needs to supply one's name, address, and nine-digit ZIP code, and a "personalized" fax with all the relevant information is sent to the appropriate Congressman.

Later today, if you're a webcaster or broadcaster, you can also ask your listeners to help. Please scroll down to find banner ads and PSAs (or links to such) near the bottom of today's issue. And we've revised the home page of SaveInternetRadio.org.

Webcasters offer banner ads, PSAs in support of HR 5469

Various professionals from the Internet radio industry are contributing their talent and efforts to build a storehouse of resources to support font color="#990066">Rep. Sensenbrenner's "Relief for Small-Business Webcasters" bill. These various graphic and audio files are intended to be shared by the industry, and used by anyone who'd like to encourage support of the bill.
Here are a "banner" and a "tile" for use on your site (courtesy of IRH-Live's Rabbett). He links them to his info page here, but the text on the images is such that they could link to any info page (such as SaveInternetRadio.org).

ALSO SEE kurthanson.com for a growing list of Internet broadcasters who have shut down in the past three months.

The H.R. Bill

From L.A. Times

(L.A. Times view): 9/27.2/02 - "Webcasters May Get Reprieve on Royalties. Media: Lawmaker seeks six-month delay in fees Internet broadcasters must pay to record labels and artists. Offering a potential lifeline to hundreds of Internet radio stations, the chairman of the House Judiciary Committee introduced a bill Thursday to give Webcasters a six-month reprieve on the new royalties they must pay to record labels and artists." More at http://www.calendarlive.com/tv/cl-fi-webcast27sep27.story

Excerpts: At issue are the controversial royalties set by the Librarian of Congress, who based his finding on a proposal from federal arbitrators. Starting in mid-October, commercial broadcasters on the Net must pay 0.07 cent per song for each listener tuned in, or $92 per listener per year for stations playing a steady diet of music.

Hundreds of stations have shut down in the face of those fees, and many more were expected to close rather than pay the three years of accumulated royalties that were due Oct. 20.

Sensenbrenner's bill would delay the royalties for six months, giving Congress more time to consider changing the way royalties are set. Advocates say the current system leads to unfair results, such as the arbitrators' proposal, which was based entirely on the royalties deal that online powerhouse Yahoo Inc. struck with the Recording Industry Assn. of America.