Copyright Royalty Board Rejects Webcaster Rehearing

Major Setback Will Force Many Online Radio Stations Out Of Business

The US Copyright Royalty Board (CRB) has rejected motions for a rehearing by Internet radio broadcasters related to increased royalty payments for the use of master recordings.

The three judge panel stated, “the parties filed various responses per our request, having reviewed all motions, responses to those motions, and written arguments, the Judges now deny all such motions.” The five-page document noted that internet broadcasters largely rehashed earlier arguments in their rehearing requests, or raised issues that could have been offered during earlier proceedings. “We find, however, that none of the moving parties have made a sufficient showing of new evidence or a clear error or manifest injustice that would warrant a rehearing.”

The denial follows an original ruling in early March of this year that significantly raised royalty payments. Motions were filed by the Digital Media Association (DiMA), Intercollegiate Broadcasting System, Inc., Small Commercial Webcasters, National Public Radio (NPR), and various others. The rejection was received favorably by the somewhat unctous SoundExchange entity, which represents the interests of major recording labels and artists. “We are gratified that the CRB has upheld its decision,” said Michael Huppe, General Counsel at SoundExchange.

The CRB also refused to grant a stay on the payment of retroactive royalties until all legal appeals are exhausted, a decision that will generate a lump payment for a number of internet-based radio providers. “In just about one month from today … the Copyright Royalty Board expects internet radio stations to pay millions of dollars in retroactive royalties – and this will drive most stations out of business,” said Jonathan Potter, executive director of DiMA.

Others promised a fight and rallied behind the banner of SaveNetRadio, a group committed to pushing back against the escalated rates. “The CRB’s ill-informed decision to increase royalty fees to this unjustifiable level will quite simply bankrupt most webcasters and destroy internet radio,” said SaveNetRadio spokesperson Jake Ward.

The alliance, which announced itself at the Radio and Internet Newsletter (RAIN) Las Vegas Summit yesterday, promised to fight against rates that it described as crippling. “Before this ruling was handed down, the vast majority of webcasters were barely making ends meet as internet radio advertising revenue is just beginning to develop,” the group said in a statement. “Without a doubt, most internet radio services will go bankrupt and cease webcasting if this royalty rate is not reversed by the Congress.” The group carries the rather focused goal of eliminating the revised rate structure, which replaces per-revenue royalty calculations with per-play penny rates.

More information on Save Net Radio.

Author: FutureMusic

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