Bill Offers Possible Reprieve for Indie Internet Radio

Editor's Note: Since publication of this article, the Copyright Royalty Board has changed the start date for the new royalty schedule from May 15 to July 15.)

Next Tuesday, May 15, is a day that many in the internet radio industry, which makes extensive use of streaming media technology, are dreading. On that day, the Copyright Royalty Board's modified internet radio royalty rates kick in, retroactive to January 1, 2007 (see "New Royalty Schedule May Scuttle Independent Internet Radio".

But the plight of small, independent internet radio stations is getting attention from diverse and-in some cases-powerful players.

At the top of the heap is a piece of legislation introduced into the U.S. House of Representatives by Rep. Representative Jay Inslee of Washington. Dubbed "The Internet Radio Equality Act," the bill's intent is to "reverse the recent [Copyright Royalty Board] decision and change the royalty rate-setting standard that applies to commercial internet radio royalty arbitrations so that it is the same standard that applies to satellite radio," according to a memo from Inslee's office. In addition, the bill specifically "sets a royalty standard designed for noncommercial entities" such as public radio stations.

The National Association of Broadcasters, which has just finished its annual show in 2007 and had, in the past, actively discouraged the growth of internet radio streaming as a threat to local traditional broadcasters, is now firmly behind the move to reverse the Copyright Royalty Board's decision. A press release from the 8,300 member organization said the organization "will work with Congress to craft a solution that helps ensure the survival of a fledgling audio platform" and that it is reviewing Inslee's bill to "overturn the Copyright Royalty Board's disappointing decision to dramatically raise fees for companies that stream music over the Internet."

Part of the reason that NAB may have come around to backing internet radio streaming may be gleaned from another unlikely source: the hip-hop blogosphere. Davey D, a noted hip-hop critic and radio host based in Oakland, recently noted in his blog that the change in internet radio royalty rates may result in some strange bedfellows.

"Now that we have people ready to push for better music, how do we intend to distribute?" he asks. "The [new] U.S. copyright law flipped the script and developed a new type of payola which effectively has wiped out internet radio and any other digital distribution streams."

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