Wednesday, May 22, 2002

Librarian of Congress Rejects Proposed Webcasting Fees By DAN CARNEVALE Washington The librarian of Congress on Tuesday rejected proposed fees that radio broadcasters -- including those at colleges -- would pay for playing music online. Broadcasters had complained that the proposed fees were too high, while the recording industry said they were too low. Now James H. Billington, the librarian of Congress, has until June 20 to determine on his own what the fees should be. His decision Tuesday did not indicate whether he thought the proposed fees were too high or too low. The Digital Millennium Copyright Act of 1998 requires radio stations that play music online to pay fees to the recording industry. The act says that if the librarian of Congress rejects an arbitration panel's proposal, he must set the fees himself within 30 days. "It's potentially very good news," said Will Robedee, vice chairman of Collegiate Broadcasters Inc., a trade group for campus radio stations. "I doubt the rates are going to go higher." Under the proposal that Mr. Billington rejected, noncommercial radio stations that have simultaneous Internet transmissions -- including college stations -- would have paid two-hundredths of a cent per listener per song for every song they played. Commercial radio stations that offer simultaneous Internet transmission would have paid seven-hundredths of a cent per online listener. Stations that transmit only online would have paid fourteen-hundredths of a cent per listener per song. All stations that broadcast online would have paid a minimum $500 fee annually to the recording industry. All of the fees would be retroactive to October 1998, when the Digital Millennium Copyright Act went into effect. The proposed rates were recommended by a Copyright Arbitration Royalty Panel after six months of negotiations. The panel was established by the U.S. Copyright Office. The recording industry responded that the proposed fees did not compensate artists adequately, but radio broadcasters argued that the fees would force many of them to stop playing music online. Both groups asked the librarian of Congress to reject proposed rates. Jonathan Lamy, a spokesman for the Recording Industry Association of America, said Tuesday's decision is ambiguous. "Folks should be wary about reading too much into this, because it's just a two-sentence decision, as you saw, that simply rejects it and says nothing else," he said. But Mr. Robedee, of Collegiate Broadcasters, said the proposed rates would have put small radio stations out of the Webcasting business, and said it was unlikely that the final rates would be set higher. "There's always the potential that the librarian of Congress thought that the proposed rates were too low," he said. "But I can't see that happening." He is also general manager of Rice University's radio station, KTRU. In the meantime, Mr. Robedee said, he plans to continue lobbying Congress and Mr. Billington to set the rates as low as possible. Although Tuesday's decision dealt only with the proposed fees, Mr. Robedee said he hopes that Mr. Billington will also reject proposed record-keeping requirements by the June 20 deadline. The arbitration panel had proposed that radio stations keep detailed records about every song they play online, as well as about the number of online listeners for every song. But keeping such records is time-consuming and expensive, Mr. Robedee said. Fritz Kass, director of operations of the Intercollegiate Broadcasting System, another group that represents college stations, said he was not surprised by the decision, given that both sides were unhappy with the proposal. Mr. Kass also complained that many small broadcasters could not afford to participate in the Copyright Arbitration Royalty Panel. Copyright law permits the government to pass the cost of arbitration on to the parties involved in it. In this instance, he said, fees amounted to about $300,000 for each of the panel members. "They need time to come up with something because nobody was happy with the other rates, and then they had folks like us who felt we were excluded from the CARP process," Mr. Kass said. Background articles from The Chronicle: College Radio Stations Join Copyright-Fee Protest (5/17/2002) College Broadcasters Fear Tracking Rule May Force an End to Webcasts (4/26/2002) Proposed Fees for Broadcasting Songs Online Worry College Radio Officials (3/8/2002) Easy-to-print version E-mail this article

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