Webcasters Plan a Tuesday of Silence

The sounds of silence will be deafening Tuesday when webcasters plan to
cut their feeds for a day to protest an increase in Internet radio royalty
rates. The idea, event organizers say, is to give listeners a taste of what
will happen if the new rates actually kick in on July 15.

The national “Day of Silence” will be marked with some webcasters simply
turning off their streams while others will intersperse stretches of silence
with public service announcements (PSAs) about the fee hike. The webcasters
claim the new fees will force many of them out of business.

“On June 26, millions of net radio listeners will experience a preview of a
post July 15 Internet radio industry decimated by these increased royalty
rates and arbitrary fees,” SaveNetRadio’s Jake Ward said in an e-mail
statement to internetnews.

Since the March announcement by the Copyright Royalty Board (CRB) that nearly triples the royalty rates for music played over Internet radio stations, webcasters have been furiously lobbying Congress for a reprieve while seeking at least a temporary stay of the rate hike in the courts.

Musicians have also flooded Capitol Hill carrying SaveNetRadio’s message that
July 15 will be the day music dies on the Internet. On that day, 17 months
worth of retroactive royalty payments based on the new fees will come due.

Whether that actually happens, though, is problematic thanks to pending
legislative or court action. The webcasters plan to hammer home the importance
of contacting lawmakers through their PSAs on Tuesday.

“We are encouraged by the number of webcasters who have chosen to stand
together in a national day of silence,” Ward said. “The diversity of those
webcasters in terms of size, style and geography is a clear reflection of the
importance of this issue and reality of this threat.”

The new rates for commercial and for larger non-commercial webcasters are
based on a pay-per-play rate of $.0008 for 2006, $.0011 for 2007, $.0014 for
2008, $.0018 for 2009 and $.0019 for 2010.

The three-judge CRB panel denied motions by webcasters and the Corporation for
Public Broadcasting (CPB) for a rehearing on the royalty rates. The CRB said
none of the motions “made a sufficient showing of new evidence or clear error
or manifest injustice that would warrant a rehearing.”

The CRB also refused to stay the implementation of the new royalty rates until
all legal appeals have been exhausted. “Congress determined that these rates
would go into effect, notwithstanding any pending motions for rehearing,” the
CRB wrote in its decision.

Those decisions prompted Reps. Jay Inslee (D-Wash.) and Don Manzullo (R-Ill.)
to file the
Internet Radio Equality Act, which would vacate the CRB decision and apply the
same royalty rate-setting standard to commercial Internet and satellite radio,
which pays a lower rate than webcasters. Similar legislation is pending in the Senate.

The Digital Media Association (DiMA), National Public Radio and a coalition of
small commercial webcasters have also filed for a stay of the
rates with the U.S. Court of Appeals for the D.C. Circuit.