Federal Court Denies Motion to Stay Webcasting Royalty Rates

The U.S. Court of Appeals for the District of Columbia Circuit denied all motions to stay any aspect of the ruling by the Copyright Royalty Judges on the new rates Webcasters are required to pay recording artists and record labels.
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The U.S. Court of Appeals for the District of Columbia Circuit denied all motions to stay any aspect of the ruling by the Copyright Royalty Judges on the new rates Webcasters are required to pay recording artists and record labels.

Rates are set to increase Sunday.

The new rates would increase Internet radio sound recording royalty rates by up to 1,200 percent, and to impose a $500 per-channel “minimum fee” that will total more than $1 billion annually, according to the Digital Media Association, representing Webcasters in the fight.

The general appeal will still proceed, according to SoundExchange, which represents music labels in the debate over raising Internet radio royalties.

SoundExchange is pleased about the decision but says it has offered to extend 1998-era below market rates to small commercial Webcasters, and to keep rates at 2003 levels for thousands of non-commercial Webcasters. This would mean that the vast majority of Internet services would have no rate increase of any kind from 1998-2010, according to SoundExchange, which is in negotiations with the Digital Media Association and others with respect to a cap on minimum fees.

Jonathan Potter, DiMA Executive Director, said in a statement: “DiMA members and all Web casters are disappointed by the court’s decision, and are now forced to make very difficult decisions about what music, if any, they are able to offer. The result will certainly be fewer outlets for independent music, less diversity on the Internet airwaves, and far fewer listening choices for consumers.”

DiMA is hoping Congress plays a role in the outcome of the dispute.

Reuters quoted the SaveNetRadio coalition of Webcasters saying it will continue fighting the hikes in Congress. The group said the six biggest Internet radio stations -- Pandora, Yahoo, Live365, RealNetworks Inc., Time Warner Inc’s AOL and Viacom Inc’s MTV Online -- will pay 47 percent of their anticipated 2006 combined revenue of $37.5 million in performance royalties.

The Los Angeles Times reported on stations shutting down because of the pending rate change.

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