Federal Gov’t Threatens Bankruptcy of Non-profit Radio Stations

Non-profit public radio is being forced to pay commercial rate royalties for live broadcast internet streaming or turn off their webcasts altogether. The “Internet Radio Equality Act” can fix this. Congress act now. Source: Mike Gauss/ Articulon
Jun 19, 2007 13:11:28
Click to see PDF Version of this Press Release

(PRLog.Org)A grassroots movement among non-profit radio listeners has begun. The goal is to save Internet streaming of live-radio broadcasts. The majority of the operating budget for most non-profit radio stations comes from individual listener donations.

•   In 1998 the copyright laws were amended to include Internet radio streaming.
•   The law did not properly differentiate between commercial radio streaming and non-profit radio streaming.
•   Appeals to The Copyright Royalty Board have ended with a ruling that all Internet streaming royalty assessments will be calculated in the manner commercial radio royalties unless Congress amends the law.
•   The new rate structure takes affect July 15, 2007. All royalties will be due and retroactive to January 1, 2006.
•   According to the grassroots campaign, SaveNetRadio.Org, past due royalties alone will be enough to bankrupt virtually all small and mid-sized non-profit radio webcast streamers.
•   According to the Radio and Internet Newsletter, the royalty rate increase includes a $500 per-channel administration fee. They estimate that administrations fees alone will amount to $1 billion per year. Currently, administration fees total approximately $20 million per year.
•   In addition to the administration fees, per-play, per listener song royalties will translate to a 300 to 1,200 percent increase. The royalty structure is calculated on a station’s number of listeners and different formats of listening online. Formats include Real Player, Windows Media Player, MP3, QuickTime, Ogg Vorbis, etc.
•   Two bills have been introduced into Congress to correct the law, one in the Senate and one in the House, both known as “Internet Radio Equality Act.” The bills have been remanded to committee.
•   Non-profit radio stations across the country are asking listeners to write their representatives in Congress to support this legislation and move it to the floor of the House and Senate for passage.

One of the first radio stations to stream live on the Internet is WCPE, TheClassicalStation.Org. Founded in 1973 by five North Carolina State University graduates, WCPE is a 100 percent listener-supported, non-profit classical music station.

Available for interview is WCPE General Manager, Deborah S. Proctor.
•   Proctor is a 28-year veteran of non-profit radio operations.
•   She has made amicus pleadings to, and testified before U.S. Patent and Trademark Offices.
•   She presented testimony to the House Judicial Subcommittee on the Internet.
•   She participated in several cases before the District of Columbia Court of Appeals.
•   She worked with former Senator Jesse Helms to get the Small Webcasters Settlement Act passed in 2002. This act played a major role in the growth of independent Internet radio stations by correcting deficiencies in the 2002 Copyright Arbitration Royalty Panel.
The release below gives more detailed information.

I would be glad to answer any of your questions and arrange an interview with Deborah S. Proctor. Please call me at (919) 232-5008 or e-mail me at mike@articulon.com.

Mike Gauss
Sr. Account Manager

For Immediate Release
Media Contact:
Mike Gauss

U.S. Law Makers Need to Support Public Radio
Non-Profit Radio to pay the price

WAKE FOREST, N.C. (June 19, 2007) — The “Internet Radio Equality Act”, which affects every public radio station in the nation (Senate Bill S-1353, and Congressional Bill HR-2060), was introduced over one month ago. Less than one-fourth of US Representatives and only a handful of Senators are signed on as author or co-sponsors as of June 13, 2007. Lack of additional support could cause the bills to die in committee, forcing non-profit public radio to pay commercial rate royalties for live broadcast internet streaming or turn off their webcasts altogether.

Public radio listeners have begun grassroots lobbying efforts on behalf of all public radio stations, including WCPE, TheClassicalStation.Org. National Public Radio, National Federation of Community Broadcasters, Corporation for Public Broadcasting, Collegiate Broadcasters, Inc. and Intercollegiate Broadcasting System have all urged support for the bills on behalf of their member stations;
see http://www.savenetradio.org.

WCPE is one of the first public broadcasters to stream on the Internet. WCPE, a non-commercial, 100 percent listener-supported, independent station dedicated to excellence in Great Classical Music broadcasting is heard worldwide on the Internet in multiple formats, including the next generation IPv6. If the Act is not passed, WCPE could be forced to seriously curtail, or even abandon, its streaming service.

The History:

In 1976, Congress enacted laws which made all broadcasters (public and commercial) pay royalties for music. Congress recognized the beneficial nature of non-commercial, educational broadcasting (public radio). Public radio’s royalty rates were to be formulated in a manner that did not involve inherently commercial business aspects such as: sales, profit, reach, net, and gross.

In 1998, Internet radio was added into the copyright law. The subcommittee writing the new law placed public radio webcasting in the commercial broadcasting section instead of the non-commercial section.

On March 2, 2007 the Copyright Royalty Board ruled that public broadcasters must formulate and pay webcasting royalties in the same manner as commercial broadcasters.

The result of the Copyright Royalty Board’s decision to ignore the original copyright law’s public service provisions is to shackle every public radio webcast with drastically higher royalty rates, increased record-keeping and reporting requirements and participation in expensive copyright tribunals and Copyright Royalty Board hearings.

The “Internet Radio Equality Act” will not eliminate the payment of royalties by public radio. It simply allows webcasting royalties to be calculated the same way that public radio broadcasting royalties are calculated.

Senate Bill S-1353 and Congressional Bill HR-2060 will correct the errors made by the Copyright Royalty Judges if the bills can get enough votes from your two US Senators and your Representative. To learn how to help continue public radio streaming, visit http://theclassicalstation.org/save_our_streams.shtml. There are links to help you find the addresses of your Senators and Representative.

About WCPE:
With a 28-year history, WCPE 89.7 FM is a non-commercial, 100 percent listener-supported, independent station dedicated to excellence in Great Classical Music broadcasting. Community-minded business underwriters and foundations are among the 150,000 listeners in the North Carolina broadcast area. General Manager Deborah S. Proctor’s leadership has enabled the WCPE community to include national and worldwide listeners. Other radio stations and cable television systems can rebroadcast Great Classical Music without royalty or consideration. WCPE is one of the first public broadcasters to stream on the Internet. WCPE is heard worldwide on the Internet in multiple formats, including the next generation IPv6. Because WCPE receives no tax-derived support, the station conducts two on-air fundraising campaigns and two major mail-out campaigns per year to raise needed operating funds. Quarter Notes, the WCPE Program Guide, is published four times a year as a means to enhance appreciation and understanding of classical music. It is distributed to station supporters and is also available online at TheClassicalStation.Org/guide. For more information, visit TheClassicalStation.Org or call 800-556-5178.

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