Day of silence protests increased royalty fees for webcasters

WASHINGTON: Internet radio stations across the country went silent this Tuesday, but Congressional office phone lines were ringing off the hook.

WASHINGTON: Internet radio stations across the country went silent this Tuesday, but Congressional office phone lines were ringing off the hook.

In a grassroots effort to protest a proposed set of steeply heightened royalty rates that many webcasters fear will silence music streams forever, thousands of listeners contacted their representatives by phone and e-mail, urging them to support the Internet Radio Equality Act, a bipartisan bill which would overrule the increases and put Web radio on a royalty scale parallel to satellite radio.

Thousands of the nation's 30,000 webcasters - including Yahoo, Pandora, MTV Online, and Rhapsody - participated in the "Day of Silence" campaign. Online stations interrupted programming to direct listeners to a SaveNetRadio.org site, where they could learn about the royalties debate and find contact information for their regional representatives.

According to campaign supporter Paul Maloney, editor of RAIN (Radio and Internet Newsletter) and affiliate Webcast AccuRadio, response was tremendous; many listeners were actually unable to reach their representatives by phone due to the high volume of calls, and the effort effectively generated coverage in dozens of mainstream media outlets, from the Washington Post to CNN. Currently, however, the federal Copyright Royalty Board has denied all motions for rehearing the ruling, so it will be up to the Congress and Senate to step in.

In March, three Congress-appointed copyright judges ruled to increase royalties paid by webcasters by 300%; the first payments are due on July 15, are retroactive to 2006, and in some cases, include multiple $500 administrative fees. The royalties are paid to SoundExchange, a music industry group that distributes them to artists and labels.

"Internet radio has knocked down all the walls: You can get what you want, when you want it," said Jake Ward, director at Qorvis Communications which represents webcaster coalition SaveNetRadio. But, Ward said, if the new royalty rates do go into effect, many online broadcasters will not be able to afford even the initial invoice.

Artists, too, are actively involved in the campaign, including more than 30 who performed for congressional staffers in a SaveNetRadio concert on the lawn on June 18, according to Ward.

Though royalties directly benefit them, Ward said, the musicians involved say it's ultimately more important to have Internet radio exist as an outlet than earn a few extra bucks each year.

"It's the lifeblood of millions and millions of independent artists right now," Ward explained. "It enables artists to find new fans."

SoundExchange representatives could not be reached for comment. But the organization has stated that large companies like Yahoo and AOL can afford to pay the new royalty rates, and that it is currently in negotiations with smaller webcasters.

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