U.S. Reps. Don Manzullo (R-IL) and Jay Inslee (D-WA) today introduced bipartisan legislation to protect Internet music Web casters from unfair government regulations that threaten to put them out of business and end the access to music over the Internet for more than 70 million Americans.
The Internet Radio Equality Act would reverse a recent decision of the federal Copyright Royalty Board (CRB) to at least triple the amount of royalties Internet radio broadcasters pay to copyright holders for playing a song.
In March, the CRB drastically increased royalty rates for webcasters – starting retroactively at $0.0008 per song in 2006 and climbing to $0.0019 per song in 2010. Though it costs only fractions of a penny per song, the change amounts to a 300 percent cost increase for the largest webcasters and up to a 1200 percent increase for smaller operations. These increases would bankrupt many Internet music Web casters and force U.S. radio stations to stop streaming their programs on the Internet.
“The Internet has provided us with amazing opportunities to enjoy music, and this unfair action by the Copyright Royalty Board threatens to take it all away,” Manzullo said. “Our legislation overturns the huge rate increases and sets up a system that is fair to Web casters, web users and the artists whose music we all enjoy. And most importantly, it will keep music playing on the Internet.”
“This Titanic rate increase is simply untenable for many Internet radio broadcasters,” said Inslee, a member of the House Energy and Commerce Subcommittee on Telecommunications and the Internet. “You can’t put an economic chokehold on this emerging force of democracy,” he added. “There has to be a business model that allows creative webcasters to thrive and the existing rule removes all the oxygen from this space.”
The legislation would provide royalty parity for Internet radio providers. It would vacate the CRB’s March 2 decision and apply the same royalty rate-setting standard to commercial Internet radio, as well as satellite radio, cable radio and jukeboxes. A transition rate of 7.5 percent of revenue would be set through 2010.
According to Nielsen Media Research, 70 million Americans listen to online radio each month.
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