Internet radio will remain safe and sound, at least through July of this year, on account of a new decision by the US Copyright Royalty Board. Under the CRB’s original ruling, Internet radio stations would have had to begin paying retroactive royalties on May 15, thereby knocking many of them offline due to the crippling fees. The new date, July 15, 2007, is two months later than the original deadline set by the CRB and offers some reprieve for Internet radio stations hoping for a miracle (or Congress) to reverse the CRB’s decision.
The original ruling by the CRB caused widespread outrage from Internet broadcasters and listeners alike. The ruling said that every Internet radio station—even nonprofit stations and those that serve the public—must pay heavily-increased royalty fees to royalty collection entity SoundExchange. The rate hike involved a $500 annual fee for each channel owned by a station and a royalty for every song played per connected user at the time of the song’s broadcast. The CRB ruled that Internet radio stations would have to pay retroactive fees on the new rates to cover 2006 and 2007, as well.
National Public Radio spearheaded an appeal against the CRB’s ruling, arguing that the newly-proposed fees for Internet broadcasters were so high that they would cripple nearly all of the currently-available radio stations on the ‘Net. The organization also reasoned that the fee would be impossible for broadcasters to calculate and begged the CRB to reconsider the formulas for calculating its new fee structure.
The CRB rejected the appeal several weeks later and upheld every part of the original ruling, save for how royalties would be calculated. Instead of charging a royalty for each time a song is heard by a listener, the broadcasters would be able to pay fees based on average listening hours through 2008. However, the new formula would still yield fees crippling most ‘Net radio stations and force them offline once retroactive fee collection started on May 15.
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