NAB Gets Behind Internet Radio Equality Act

Saying SoundExchange has ignored its good-faith offer to settle webcast performance royalties, the NAB has thrown its “unqualified support” behind the Internet Radio Equality Act, introduced in April by Rep. Jay Inslee and since co-sponsored by 140 other House members.

The bill would set aside the webcast performance royalties set by the Copyright Royalty Board in March, replacing per-performance payments with a transitional rate of 7.5% of revenue for 2006-2010. A similar bill, also called the Internet Radio Equality Act, was introduced in the Senate in May.

The NAB said on July 25 that it made an offer to SoundExchange on behalf of its member stations back on June 6 – and has yet to receive a reply. NAB EVP Dennis Wharton said, “We are disappointed by SoundExchange’s continued reluctance to respond to the good-faith, reasonable offer put forth by NAB nearly two months ago. NAB will now turn our attention to aggressively advocating in support of Rep. Inslee’s legislation to ensure that local radio broadcasters who stream content online are treated fairly.”

Meanwhile, negotiations between SoundExchange – which collects and distributes webcast royalties – and the Digital Media Association, which represents such large-scale streamers as AOL, Live365, Yahoo and Pandora, appear to have hit a snag. DiMA last week accused SoundExchange of backing away from an offer to cap one part of the royalties — a $500-per-channel minimum fee — by conditioning the offer on what DiMA called “enforceable technology mandates that are unreasonable, unworkable and way off-topic.” These “technology mandates” apparently involve measures to prevent “stream ripping,” or copying streamed music to build a music library.

The CRB in March upped webcast royalties to .08 cents per performance for 2006, and mandated an increase to .19 cents by 2010. The rate hike went into effect on July 15 and royalties at the new rates are accruing, but most webcasters who might have been forced to shut down due to inability to pay the royalties have stayed online thanks to a July 13 agreement by SoundExchange not to enforce the CRB rates as long as good-faith negotiations continue.

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