Traditional radio stations have to pay royalties for Net streaming

Court Rules AM/FM Simulcasters Must Pay Royalties

The Third U.S. Circuit Court of Appeals in Philadelphia has upheld a ruling by the U.S. Copyright Office requiring radio stations that stream broadcasts over the Internet must pay royalties to recording companies and artists as well as to composers. Traditional over-the-air radio stations only pay royalties to songwriters.

While AM and FM stations have long enjoyed the royalty exemptions to artists and labels on the premise that radio airplay promotes sales, Congress decided in passing the 1998 Digital Millennium Copyright Act (DMCA) that Internet-only radio stations would not have the exemptions.

The Recording Industry of America Association (RIAA), the principal music industry trade representing the major labels, then asked for a Copyright Office ruling if the DMCA applied to radio stations simulcasting over the Internet.

The Copyright Office ruled that the royalty payment provisions applied equally to webcasters and stations simulcasting over the Internet, which prompted an appeal from station owners and the National Association of Broadcasters (NAB). The broadcasters maintained Congress meant the DMCA to apply only to downloading services, although the language of the DMCA is vague, at best, on that point.

In August of 2001, U.S. District Judge Berle M. Schiller in Philadelphia upheld the Copyright Office ruling. Friday’s decision by the Third U.S. Circuit Court of Appeals found no reason to overturn Berle’s decision.

Read the full story @ Internet.com

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