06.07.2007 08:00 AM
Webcasters challenge royalties in court

National Public Radio (NPR) has joined a group of webcasters to appeal dramatically increased music royalties that could destroy the fledgling field of Internet broadcasting.

NPR filed a notice with the U.S. Court of Appeals in Washington last week indicating that it would challenge the ruling by a panel of copyright judges. The ruling would sharply raise the amount of royalties that NPR stations and others have to pay record companies for streaming music over the Internet.

The public broadcasters also joined webcasters in asking the court for an emergency stay blocking the adoption of the new rates, which are set to go into effect July 15.

Several NPR member stations, such as KCRW in Los Angeles, have significant online audiences for music programming and would have to drastically cut back those offerings under the new royalty rates, NPR told the court.

Andi Sporkin, a spokeswoman for NPR, called the decision by the Copyright Royalty Board on May 1 “ill-conceived” and warned that it would cause “irreparable harm” to member stations by forcing them to cut back on streaming music online.

The Associated Press (AP) said a group representing major Internet companies including Yahoo, Time Warner’s AOL unit and RealNetworks were expected to join in the motion for a stay.

Separately, in Congress, a bill seeking to block the new royalties and implement a different payment system is gathering rapid support. The Internet Radio Equality Act has 100 co-sponsors in the House and has also been introduced in the Senate.

Kurt Hanson, who operates a small online radio company called AccuRadio, told the AP that the new royalty rates would put smaller operators such as his out of business.

Currently, smaller webcasters pay a portion of their revenues — usually from advertising — in royalties, amounting to about 10 to 12 percent. The new rates would require them to pay each time a song is heard by a listener, as well as minimum amounts per channel.

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