Wyden on IREA: We’re gonna stay at this until we get it done

www.kurthanson.com

BY DANIEL MCSWAIN in Washington, DC
Negotiations between
webcasters and the recording industry have seen “some progress,” but Congressional pressure to continue talks between the parties will persist until other aspects of the CRB decision are addressed, according to one of the original Senate cosponsors of the Internet Radio Equality Act.

The comments came from Sen. Ron Wyden (D-OR) in a keynote address at this morning’s Future of Music Policy Summit in Washington D.C.

“At the end of August, we got some progress in terms of limiting these per channel fees,” Sen. Wyden said. “If you didn’t get the caps on those initial fees, you would be clobbering the little guy. We have a little way to go, but it’s some progress.”

Royalty standard is the heart of the problem
Despite the cap
on the fees, the Senator argued that numerous other issues, some of them tied to the process by which the CRB decision was determined, continue to face webcasters as they seek to resolve the contentious royalty rate crisis.

“Even if you get a royalty agreement that covers the minimum fee, you still need the bipartisan legislation. You have to change the royalty standard. That was really the mistake that led to all of this,” the Senator said.

When other royalty rates for digital use are settled by arbitration, judges follow what is called the 801(b)(1) standard, which guides the decision-making process to ensure fairness, that the availability of copyright works to the public is maximized, and to minimize disruption of the industry in question. At the music industry’s request, the 1998 Digital Millennium Copyright Act replaced 801(b)(1) for webcast royalty arbitration with a new standard called “willing buyer / willing seller.”This makes webcast royalty arbitration unique (both under the current Copyright Royalty Board system and the replaced Copyright Arbitration Royalty Panel, or “CARP” regime) in that, by law, the standard of fairness is removed — arbitrators now simply look to replicate what a “willing buyer” and a “willing seller” might agree to in a hypothetical market. The IREA would change the standard to 801(b)(1). (For more detail on this, see Kurt Hanson’s essay “Copyright Law and the CRB: What went wrong?” in RAIN here, especially the sections titled ‘Enter Digital’ and ‘Enter the DMCA.’)

Sen. Wyden [right] continued, “Unless you get the guts of [the IREA] enacted into the law, Internet radio may not die, but it is sure going to be hurt. I’m not going to let that happen on my watch. We’re going to stay at this until we get it done.”

In his address, the Senator touched on a number of his other tech legislation initiatives, most notably the Internet Nondiscrimination Act of 2006, and the Internet Tax Freedom Act. He also expressed his belief that the U.S. Senate is increasingly embracing high-tech issues and legislation.

Still, the Senator returned numerous times to his involvement with the IREA and the fight to keep webcasters in operation.

“I think everybody was just stunned by the breadth of the CRB decision,” Sen. Wyden said. “This was a creature of the United States Congress. It would have been devastating if it was put into effect.”

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