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’
, 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

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

“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.

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