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Internet Radio Gets a Stay of Execution

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New royalty rates for Internet radio set to go into effect yesterday have been pushed back until July 15. However, if the new Copyright Royalty Board (CRB) rates are implemented, they will be retroactive to January 1, 2007. The change will give Congress a chance to discuss and perhaps pass the Internet Radio Equality Act.

U.S. congressmen Jay Inslee (D-WA) and Donald Manzullo (R-Il) introduced the Internet Radio Equality Act in an effort to halt the rate hike. It would throw out the Board's decision to hike rates and return the webcasting industry to a percentage of profits system. The percentage would be set at the same rate paid by satellite radio, 7.5 percent of revenue. The bill would also change the royalty rate-setting standard used in arbitrations, so that the standards applying to webcasters would align with the standard that applies to satellite radio royalty arbitrations. Last week Senators Ron Wyden (D-OR) and Sam Brownback (R-KA) introduced similar legislation in the Senate.

Internet Radio providers such as the 6 million-member strong Pandora.com and Miami’s own W305 have said if the new CRB rates go into effect they may have to shut down their stations. Earlier this month Pandora.com closed its station to listeners outside the United States because of high international royalty rates. There are an estimated 34.5 million Internet Radio listeners in the United States. --Tovin Lapan

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