Internet Radio Equality Act proposed

May 1, 2007

Internet radio broadcasters may find a savior in a recent proposition in the US Congress. The recently proposed Internet Radio Equality Act, introduced by representatives Jay Inslee (D-WA) and Donald Manzullo (R-IL), would strive to revert the drastic changes applied to Internet radio royalties by the Copyright Royalty Board (CRB) that will go into effect on May 15, 2007, and retroactive since January 1, 2006. The proposition aligns Internet broadcasting fees to be more inline with those of satellite radio, for a flat fee of 7.5% of the broadcaster's revenue, rather than the CRB rules of .08 (2006) to .19 (2010) cents per song for private broadcasters, or $500 per month for public broadcasters if below a specific number of listening hours.

According to Inslee, the fees that would go into effect on May 15 would be a chokehold on democracy, and claimed in a statement that webmasters need a functioning business model.

A common fear among Internet broadcasters is that they will have to file for bankruptcy once the fees of the CRB will go into effect. "Over 90% of internet radio will simply be gone. The net result will be a huge loss of diversity, a huge loss for music artists and a loss of virtually all of the internet radio that exists," claimed Joe Kennedy, CEO of Pandora.

SoundExchange, supportive of the CRB rules and a major collector of artist royalties from radio stations, has claimed the new fees are necessary to pay the artists that deserve it.