ROWLAND: Jazz legend joins battle over royalties

By Kara Rowland (Contact) | Monday, July 21, 2008

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More than a year later, Internet radio broadcasters are still lobbying against the royalty rates imposed on them in March 2007.

SaveNetRadio is hosting a visit Tuesday by New Orleans jazz legend Michael White to Capitol Hill to lobby lawmakers on the Internet Radio Equality Act, which would nullify a decision by the Copyright Royalty Board (CRB) last year to increase the payments that webcasters make to artists and record labels.

The CRB set per-song, per-user streaming rates for five years, retroactive to 2006 and increasing through 2010. The rates add up to 1.28 cents per listener per hour, based on 2006 rates, a figure that Internet radio stations, particularly small webcasters, said would result in extinction.

Meanwhile, SoundExchange, the D.C. nonprofit in charge of distributing royalties to artists and copyright holders, justified the decision as necessary changes to previously below-market rates.

Long story short: The CRB decision was appealed and upheld and the Internet Radio Equality Act was introduced in both houses of Congress, where both versions sit in committee. The Hill eventually told the two sides to work it out on their own. That was eight months ago.

The offers made by SoundExchange in that time are "3 and 4 times as high the rates as they charge cable and satellite radio providers and significantly more than webcasters can pay and stay in business," says SaveNetRadio - which describes itself as a coalition of artists, labels, listeners and webcasters - on its Web site.

The Internet Radio Equality Act has 150 co-sponsors in the House and five in the Senate. In addition to meeting with lawmakers Tuesday, Mr. White is holding a benefit concert in the District.

XM, Sirius merger costs

The National Association of Broadcasters (NAB), the most outspoken opponent of the proposed merger between XM Satellite Radio Inc. and Sirius Satellite Radio Inc., recently predicted that the two companies' merger-related expenses are "likely approaching $100 million."

According to filings with the Securities and Exchange Commission, XM and Sirius - whose merger is pending before the Federal Communications Commission - have spent a combined $69 million on merger expenses (most of which presumably went toward lobbying costs).

Said NAB spokesman Dennis Wharton: "From the beginning, we knew XM and Sirius would say anything to gain blessing for a government-sanctioned monopoly, despite their years of brazenly abusing FCC rules. Now we know they will spend anything as well. But they are also finding that government-sanctioned monopolies apparently don't come cheap."

Last month, FCC Chairman Kevin J. Martin, a Republican, announced his support for the merger under a number of conditions the companies have agreed to. The conditions include a three-year price freeze, a la carte programming and a set-aside of 8 percent of combined channels to noncommercial and minority broadcasters.

They also include a promise to manufacture an interoperable radio, a stipulation that, as critics point out, is contained in the 1997 FCC order that granted the companies' spectrum licenses.

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