Illinois Republican Don Manzullo and Washington Democrat Jay Inslee have introduced a bill to overturn a Copyright Royalty Board decision to increase royalty rates for Webcast music, setting a retroactive rate of $0.0008 per song for 2006. The rate in 2005 was $.0007 per song. Under the ruling, announced March 2, the amount is set to rise to $0.0019 per song by 2010. As well, each station has to pay a $500 fee and fee schedules that based fees on a percentage of revenue were eliminated. The Internet Radio Equality Act would mandate royalty parity for Internet, satellite, and cable radio, as well as jukeboxes and traditional radio. The CRB"s rules are scheduled to take effect May 15, and Internet broadcasters will be hit not only with an increase in current rates but a bill for the retroactive fees.
Jack Ward, of SaveNetRadio, the group lobbying against the Recording Industry Association of America and the CRB ruling, said in an interview Friday that the increases are "astronomical" and the difference in the old rates and the retroactive hike is one "no small Webcaster can pay." Internet music providers and supporters believe that the increases will bankrupt some companies and force others to stop streaming on-air programs over the Internet.
The RIAA referred questions about the bill to SoundExchange, which represents record labels and artists. John Simson, executive director of SoundExchange, said: "The idea that this bill would help small Webcasters or artists is ludicrous since less than 2% of all royalty payments in 2006 came from small Webcasters. The true beneficiaries are the mega-multiplex services like AOL, Yahoo, Microsoft, and Clear Channel, which will benefit from rates substantially lower than those set by the Librarian of Congress in 2002."