Neowin.net

Once the Liberty Alliance was formed last fall, Microsoft's Steve Balmer believed that it wouldn't stand a chance against their .Net Passport (formerly known as Microsoft Passport) service. However, Steve Balmer was proven wrong once almost 40 enterprises have joined the Liberty alliance. Some of the big names include AOL Time Warner, BCE (Bell Canada Enterprises), Hewlett Packard, Verisign, and its primary founder, Sun Microsystems. You can view the full membership directory for the Liberty Alliance on their website- below .

Although Microsoft .Net's Passport Directory claims to have over 120 sites, those in the Liberty Alliance are stronger competitors. The AOL Time Warner entry could explain that completely with its 33 million or more subscribers to their ISP and over 40 million using their Netscape web browser! However, the Liberty Alliance only accepts Sponsor entries at this moment, which would cost $30 000 US to sign up and then $120 000 US per year. Hopefully by the end of the first quarter of 2002, one can even apply as an affilate at no charge or as an associate for $1 000 US per year with no sign-up fee. And once that's done, I can personally predict a significant surge in the Liberty Alliance support. So if you thought that Microsoft .Net Passport will just simply cause another monopoly, think again!

View: Liberty Alliance Members List
View: Article @zdnet

"The question now becomes how do you pay for all the customers you acquired at a royalty rate that is this high," he said. "Everybody was figuring ... this was going to be an advertising-supported media."

If 1,000 people use their computers to listen to a song through a standalone service, the Webcaster would have to pay $1.40.

Live365 Inc. streamed 6.5 million listening hours in January at a rate of about 15 songs per hour, Jeffrey said. Under the proposal, it would owe about $2 million a year plus retroactive fees since 1998.

MusicMatch, another online broadcaster, offers subscription and free services. It has a separate license with the recording industry and would not be immediately affected by the rates, but in the future it could be.

In that case, the free radio streaming would vanish, said Bob Ohlweiler, MusicMatch's senior vice president of business development.

"It's definitely going to hurt the free radio industry in general," he said. "If and when MusicMatch is affected by the rates, we certainly couldn't afford to keep free radio up and running."

Companies that are able to attract subscribers through added services are more likely to survive than the free services. But it won't be easy.

"(The fee) is within the realm of what we had projected and prepared for," said Matt Graves, spokesman for Listen.com. "It makes it tough. It makes it tough for everybody."

The proposal does finally resolve a long-standing issue in the Internet radio business - how much it costs to operate.

"If we get through the initial devastation that may hit the small Webcast industry ... at least there's clarity for investors and financial planners to understand what their costs are going to be," Potter said.

The proposed rates also would create an extremely high barrier for companies looking to enter the Internet radio business. Capital, once readily available for dot-coms, has all but dried up.

"It's questionable whether any new series will be able to get off the ground now," said P.J. McNealy, research director of Gartner G2.

The Recording Industry Association of America said it was pleased, though the Copyright Arbitration Royalty Panel's recommendation was 35 percent smaller than the industry's proposal.

The music and Internet industries will have 60 days to comment on the recommendations.