Don't Pull The Plug On Internet Radio!

I don't stream radio over the Internet very often, maybe three or four times a week, for about two hours (at most). But I was still outraged by the decision in March by the Copyright Royalty Board (part of the Library of Congress) to order a new royalty payment formula. The new fees, made retroactive to 1 January 2006, will require huge increases in payments (in some cases, 1000%!) by webcasters & radio stations with Internet streaming. Since most cannot pay, they will have to cease operations.

SoundExchange, the industry board set up the record industry (read: the RIAA) to collect and distribute royalties to artists and record companies claims that the new fees are for the good of the artists, but this claim is highly dubious. Artists should be fairly compensated, but Internet radio provides important exposure, build audiences, and sell CDs. Besides, as an article in the Houston Press shows, SoundExchange hasn't exactly been killing itself to find all of the musicians who it says are entitled to receive royalties. Instead, it pockets the money. What a disgrace!

Shutting down webcasting will be also bad for non-profit radio stations, some of which, like WXPN, have a large, out-of-market audience. It will further kill off any interest in some music formats, like jazz, blues, classical, and world music, which have carved out a small niche on the Web.

The new fees are scheduled to take effect on 15 July. There is legislation before Congress to overturn the CRB decision, and instead, establish a royalty payment of 7.5% of revenues. Next week, I'll be writing and emailing my U.S. Representatives & Senators to support the Internet Radio Equality Act. In the House, the bill is called H.R. 2060, and in the Senate, it's S. 1353. Over the last 10 years, Congresses under the control of both major parties have avoided taxing Internet sales, access, etc., because they know its importance to future of the U.S. economy.

This bill must be passed.

Progress of this legislation in the U.S. Congress can be tracked here

Savenetradio is probably the leading group looking to overturn the CRB decision.