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Outrageous Royalty Ruling To Be Reviewed

While the Bush administration may not be capable of saying "Oops, we screwed up," it seems that another part of the federal government -- the U.S. Copyright Review Board -- might have had a change of heart. After facing a storm of outrage, the board this week agreed to review its decision to impose staggering new royalty payments on Internet radio broadcasts -- fees that would swiftly put most Web broadcasters out of business and bring an end to the brief flourishing of Internet radio.

Under the new plan, the royalties that Web broadcasters pay to copyright holders via SoundExchange, the collections arm of the Recording Industry Association of America, would climb from .0008 cents per "performance" to .0019 cents in 2010, sending total annual fees sky-high. Not only that, but the new structure -- essentially created by the RIAA and approved by the CRB, which, believe it or not, is a division of the Library of Congress -- is retroactive to January 2006

Most Web broadcasters are enthusiasts who make little if any profit from their stations and who have an idealistic sense of mission around promoting and disseminating new, hard-to-find, and innovative music.

I've written elsewhere about Pandora, the create-your-own-music-channel site based on the Music Genome Project, which has become for many people both a source of great new music and a symbol of the possibilities offered by Internet broadcasting. According to founder Tim Westergren, Pandora would be looking at "millions and millions of dollars" in additional fees -- and would be unable to continue operations. On his blog, Westergren called the original plan "an utterly ridiculous ruling that renders any form of Internet radio noneconomic."

A coalition of Web broadcasters, independent music labels, and public radio stations has mounted a campaign to reverse the ruling, and now it seems the CRB will listen. Whether we all get to listen to new music over the Internet remains to be seen.

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