Bill may save Internet radio

Editor’s Note: This article originally appeared at PCWorld.com.

A bill that could save Internet radio has been submitted to Congress. The bill, Internet Radio Equality Act, would stop a new royalty scheme that Internet broadcasters say will shut them down because it will cost them too much money.

U.S. Reps. Jay Inslee (D-Wash.) and Don Manzullo (R-Ill.) filed the legislation Thursday. The bill reverses a recent decision of the federal Copyright Royalty Board (CRB) to nearly triple the amount of royalties Internet radio broadcasters pay to copyright holders for playing a song.

The Copyright Royalty Board earlier this month approved a rule that would force commercial Internet radio stations, regardless of their size, to pay a new, higher flat fee to the record labels each time a song is played. Royalty rates for Web-casters—starting retroactively at $0.0008 per song in 2006 will climb to $0.0019 per song in 2010. As it stands now, the rates will go into effect May 15.

In a press release Inslee states: “This Titanic rate increase is simply untenable for many Internet radio broadcasters.”

“The Internet has provided us with amazing opportunities to enjoy music, and this unfair action by the CRB threatens to take it all away,” Manzullo states in the press release. “Our legislation overturns the huge rate increases and sets up a system that is fair to Web-casters, Web users and the artists whose music we all enjoy. And most importantly, it will keep music playing on the Internet.”

SaveNetRadio, which is made up of Net broadcasters, applaud the bill.

The Inslee-Manzullo Internet Radio Equality Act vacates the CRB’s March 2 decision and proposes Net radio stations continue paying a percentage (7.5) of revenues through 2010. Alternatively, the bill would allow Net broadcaster to choose to pay 33 cents per hour of sound recordings transmitted to a single user.

That’s a far cry from the estimated 60 percent of revenue that some Web broadcasters say they’ll have to pay under Copyright Royalty Board plan.

The bill faces approval and vote in the House of Representatives. The bill must also pass a Senate vote before it could be signed into law.

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