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RealTime IT News

Anti-CARP Lobby Heads to Washington

The anti-CARP Webcasting lobby has gone into overdrive with more than two dozen Net radio firms heading to Washington to protest a royalty rate structure they believe will "effectively bankrupt" the entire sector.

On the heels of a 'Day of Silence' protest, the Webcasters have descended on Congress to petition for the controversial Copyright Arbitration Royalty Panel (CARP) ruling be dismissed or modified.

The Webcasting lobby plans to outline their objections to members of Congress on Thursday and attend a roundtable discussion on Friday at the United States Copyright Office. At the roundtable, the anti-CARP group is expected to debate and propose the best structure for Webcasting recordkeeping of sound recordings during a broadcast, according to organizers.

At issue is a ruling from the arbitration panel that would set royalty fees at 14/100 of a cent per performance, a price tag that Webcasters believe will force them out of business.

With a May 21 deadline looming for the Copyright Office to either accept, modify or reject the CARP recommendation, the move to Washington to lobby Congress is seen as an all-out, last-minute drive to win support for its cause.

It appears momentum is on the side of the Internet radio stations. The group has already won support from 20 House representatives who dispatched a letter to the Library of Congress arguing that the CARP recommendation went against the intent of Congress' general policies.

The letter, drafted by Congressmen Jay Inslee of Washington, Chris Cannon of Utah and Rick Boucher of Virginia, described the CARP recommendation as "both contrary to the intent of the DMCA and Congress's general policy not to stifle innovation on the Internet."

The Congressmen mirrored the anti-CARP argument that the proposed rate structure would "stifle the industry and force hundreds of small Webcasters out of business." Webcasters want royalty rates to be set as a percentage of revenue.

"Congress intended the statutory license process to be fair and efficient so that the Webcast industry -- both Internet-only programming and terrestrial radio retransmissions -- could be free of legal uncertainty, grow quickly and pay creators increasing amounts as the industry developed," according to the letter.

While the show of support from Congress could be seen as an attempt to prod the Library of Congress into overruling the CARP recommendation, the Recording Industry's SoundExchange agency has launched a grassroots campaign of its own to support the recommended rate structure.

SoundExchange, the royalty-collection agency of the Recording Industry Association of America (RIAA), has launched a letter-writing blitz and has purchased ads accusing Webcasters of launching a campaign of misinformation.

"Despite the fact that the rate is closer to their proposal, Webcasters and simulcasters have launched a campaign to undermine the arbitration process. They are inundating Congress with complaints that they cannot afford to pay for the music -- even though they pay market value for things like bandwidth and rent," SoundExchange said.

"Some of these complaints are based on confusion. Some are based on misinformation, resulting in grossly exaggerated projected fees. Others seek to perpetuate the royalty-free status enjoyed by broadcast radio, arguing that artists and labels shouldn't be fairly compensated even when their music is performed by those building businesses on recordings," it added.

The Webcasting lobby disagrees. ""We are at the crux of a pivotal time in this industry. Internet radio Webcasters are banding together with their allies in the digital media industry, large and small, to fight for fair royalty rates that will ensure diversity and minority ownership in this new form of 'broadcasting'," said Kurt Hanson, who is leading the fight for the Net radio group.

"If Internet radio is allowed to survive, it will obviously be a 'win' for consumers, but it will also be a 'win' for artists and creators, keeping alive new venues for their work," Hanson added.

He gets a chance to explain this in Washington today and tomorrow.