Hypercube Posted July 26, 2002 Share Posted July 26, 2002 By Andy Sullivan WASHINGTON (Reuters) - One day before Congress adjourned for its summer break, several lawmakers introduced a bill that would let small Internet broadcasters defer royalty payments that could drive them out of business. The measure would give small "Webcasters" a new lease on life by allowing them to defer royalty payments to musicians and recording companies until a new round of negotiations begins next year. But the bill must advance quickly as Congress has only one more month of activity scheduled before the fall elections. Conventional radio stations have long been exempt from paying royalties to recording artists and anyone else who owns the rights to the "sound recording" of a song, but Congress said sound-recording owners should get paid for Internet transmission when it updated copyright laws for the digital era in 1995 and 1998. The Library of Congress established a rate of 0.07 cents per listener per song in June, which means that small Webcasters like Beethoven.com and broadcast giants like Clear Channel Communications Inc CCU.N . that "stream" online broadcasts would be on the hook for 70 cents for each song played to an audience of 1,000 listeners. Webcasters say the rate is too high, and several have already announced that they will shut their doors because their royalty bill will exceed their income. Virginia Democratic Rep. Rick Boucher, the bill's primary sponsor, said his legislation would allow Webcasters with annual revenues of less than $6 million to keep broadcasting until royalty negotiations start up again next year. "The goal is simply to give them life support until they get to the next round," Boucher said. Larger Webcasters would still be obligated to pay the established royalty rate as well as royalties for past broadcasts dating back to 1998, he said. The bill would also allow small Webcasters to participate in royalty negotiations without paying arbitrators' fees, and would exempt them from royalty payments on "ephemeral" buffer copies of songs that are stored on Internet servers but never heard by the public. It would also free U.S. Copyright Office arbitrators to consider what effect any royalty-rate decision would have on the industry, rather than modeling their decision only on other agreements reached between Webcasters and content owners. Boucher acknowledged that Congress has little time to consider the bill, but maintained that it could pass if enough Internet users spoke up. "Congress can act with tremendous dispatch when there is a will to do so," he said. The Digital Media Association, which includes Webcasters, said the bill "provides reprieve from bankruptcy for thousands of small Internet radio companies, and that corrects significant problems with the royalty arbitration process that imposed a devastatingly high cost on the nascent Internet radio industry." A spokesman for some copyright owners said the bill would prevent musicians from getting fair pay for their work. "These Webcasters are businesses. ... Why shouldn't they pay fair market value for the music which is the very core of that business?" said John Simson, executive director of SoundExchange. The bill, which has 10 co-sponsors, will be referred to the Small Business and the Judiciary committees. http://reuters.com/news_article.jhtml?type...StoryID=1258334 Link to comment Share on other sites More sharing options...
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