Day of Silence – Internet Radio – June 26th
BY KURT HANSON and DANIEL MCSWAIN
In response to a impending royalty rate increase that, if implemented, would lead to the virtual shutdown of Internet radio in the U.S., thousands of webcasters 
plan to go silent next Tuesday, June 26, to draw attention to their industry’s plight.
This “Day of Silence” is an encore of a successful media event that small webcasters organized on May 1, 2002 in response to a similarly royalty rate ruling from a Copyright Arbitration Royalty Panel (CARP) five years ago. That event garnered national attention and was subsequently followed by a rate cut by the Librarian of Congress and the passage of the Small Webcaster Settlement Act for the period 1998-2005. [Previous RAIN coverage here.]
Webcasters will be alerting their listeners that “silence” is what Internet 
radio may sound like on or shortly after July 15th, the day on which 17 months’ worth of retroactive royalty increase payments are due to the SoundExchange collection organization under the terms of a recent Copyright Royalty Board (CRB) decision.
Although a royalty rate like this is typically 4% to 5% of revenues in other media (e.g., satellite radio), for other rights (e.g., the musical compositions), and in other countries, the rates set by the CRB judges equate to roughly 50% of revenues for large webcasters like Yahoo! LAUNCHcast (and probably many terrestrial station streamers), 150% to 300% of revenues for 
small webcasters like AccuRadio, Radioio, and Digitally Imported, and, for webcasters with large numbers of channels like Rhapsody and Pandora, well more than 1,000% of revenues.
If the rates are left unchanged, virtually all independent webcasters will be bankrupted and most larger parent companies would logically shut down their Internet radio divisions through the end of the 2005-10 period.
‘Day of Silence’ also day for action
Listeners will be urged to call their representatives in Congress that day and to ask them to support the “Internet Radio Equality Act” (IREA) (H.R. 2060 in the House and S. 1353 in the 
Senate) and to call or write their local newspapers that day to ask for editorial support for the bill.
The IREA would vacate the CRB’s decision, while instituting an interim performance royalty rate of 7.5% of revenues (similar to the rate paid by satellite radio services) and change the standard used for future CRB proceedings to the standard typically used in other Copyright Office proceedings (which balances the needs of copyright owners, copyright users, and the general public). The bill currently has 118 co-sponsors in the House and is gathering support in the Senate.
The specific “Day of Silence” date of next Tuesday was selected by members of the SaveNetRadio.org coalition, 
which includes representatives of large Internet-only webcasters, smallcommercial webcasters, terrestrial radio broadcasters, non-commercial broadcasters, hobbyists, musicians, and independent record labels. (Earlier this spring, RAIN had proposed a date of May 8th for a “Day of Silence,” but when the CRBpushed the implementation date of their decision from May 15th to July 15th, webcasters agreed that it would be pragmatic to push back the “Day of Silence” as well.)
Major player support expected this time
Whereas the “Day of Silence” event in 2002 was largely designed by and for smaller webcasters, this year’s version appears as if it will have the support of larger players as well, possibly including Yahoo! LAUNCHcast, Pandora, Live365, MTV Online, many NPR-member and other noncommercial stations, and many 
terrestrial broadcast groups that currently stream their signals on the web.
Most webcasters are planning the June 26 “Day of Silence” to begin at dawn in their time zone and end in late evening. Many webcasters are planning to shut off access to their streams entirely, while other webcasters plan to replace their music streams with long periods of silence (or static or ocean sounds or similar) interspersed with occasional brief public service announcements on the subject.
The CRB denied a motion to re-hear the case filed by webcasters, including NPR and major companies like AOL and Yahoo!; those parties have since filed for an emergency stay with the U.S. Court of Appeals in Washington, D.C., but the court has not yet responded to their filing.
Earlier this month, SoundExchange released press releases in which they offered to grant an extension of 1998-2005 rates to certain small 
commercial webcasters and non-commercial webcasters, with some modifications. However, those modifications have apparently not yet been worked out between the parties involved.
Banner ads and PSAs will be available to all participating stations from SaveNetRadio.org. More details will follow later this week in RAIN.
