Congress introduces Internet radio legislation

Legislation that would overturn a decision that threatens to put Internet webcasters out of business because of dramatically higher royalty payments has been introduced in both bodies of Congress.

If passed, the Internet Radio Equality Act would vacate the recent ruling by the U.S. Copyright Royalty Board (CRB) that raised payment rates for music on the Internet by 300 to 1200 percent. It would reinstate the current standard of paying 7.5 percent of the broadcaster’s revenue.

Sens. Sam Brownback, R-KS, and Ron Wyden, D-OR, co-sponsors of the Senate bill, said they supported independent Web services that stem from Internet radio broadcasts. “Keeping Internet radio alive is part of a broader issue that is important to me — keeping the e-commerce engine running by preventing discrimination against it,” Wyden said.

Brownback, a Senate Judiciary Committee member and Republican presidential candidate, expressed “alarm” at the decision of the Copyright Royalty Board. Reps. Jay Inslee, D-WA, and Donald Manzullo’s, R-IL, introduced companion legislation in the House.

The new rates were scheduled to take effect on May 15, retroactive to the beginning of 2006, but the CRB agreed to extend the date to July 15, giving the opposition more time to lobby Congress to pass legislation and to raise awareness of the issue.

SoundExchange, the royalty collections division of the recording industry, pushed the CRB for the higher rates. The new rules require that royalties be paid for streaming a single song to a single listener.

Webcasters say the cumulative effects of the royalty payments would be too much for all but the biggest Internet radio sites to handle, putting them out of business. The new rules also mandate flat minimum payments to be paid for any streaming in addition to the royalty payments.

National Public Radio (NPR) lost an appeal to the CRB, but has filed an appeal in Washington, D.C., district court to stop the new rules from taking effect.