Tuesday, April 17, 2007

Copyright Royalty Board Denies Rehearing On Webcast Royalties

The U.S. Copyright Office's Copyright Royalty Board has denied requests by Internet radio operators for a rehearing on the CRB's decision setting performance royalty rates for Internet radio from 2006 to 2010. On March 2, the CRB raised the statutory royalty to be paid by Internet radio operators from .07 cents per performance to .08 cents in 2006, .11 cents in 2007, .14 cents in 2008, .18 cents in 2009 and .19 cents in 2010. Additionally, there is a minimum annual fee of $500 per streamed channel.

The Digital Media Association filed a request for rehearing on March 19, saying the higher royalties will "shut down the vast majority of legitimate online radio services." On April 2, National Public Radio filed a request for rehearing on behalf of itself, all NPR member stations and all Corporation for Public Broadcasting-qualified radio stations.

The CRB wrote in today's decision, "None of the moving parties have made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing. To the contrary ... most of the parties' arguments in support of a rehearing or reconsideration merely restate arguments that were made or evidence that was presented during the proceeding."

Additionally, the CRB denied webcasters' requests to stay implementation of the new royalty rates until all legal appeals have been exhausted.

John Simson, executive director of royalties-collection organization SoundExchange, called the decision a "victory" for performing artists and record labels. AFTRA, meanwhile, applauded the CRB's decision to uphold the royalties.

At the request of webcasters, the CRB will allow them to continue to use estimated aggregate tuning hours to determine audience listening for 2006 and 2007. This is a transitional period to allow webcasters to switch over to performance-based music tracking. Meanwhile, in response to SoundExchange's request for clarification regarding whether the initial decision covers webcasting services delivered over cellular networks, the CRB indicated that it does.

By Brida Connolly

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