Friday, June 21, 2002

College Stations Alarmed as Librarian of Congress Sets Rates for Broadcasting Music Online By DAN CARNEVALE Washington The librarian of Congress on Thursday released a final schedule of the fees that radio stations must pay to record companies when the stations play music online. The fees are slightly lower than those recommended in February by an arbitration panel, but college radio stations say they're still too high, while record companies insist that they're too low. An official of a coalition of college broadcasters said the rates would prevent most small radio stations from playing music over the Internet. The Recording Industry Association of America responded that artists and record companies still would not be adequately compensated for their work. James H. Billington, the librarian of Congress, announced the rates on Thursday. He did not, however, decide on a separate record-keeping requirement that the U.S. Copyright Office had recommended. Noncommercial radio stations -- including college stations -- that have simultaneous Internet transmissions must pay two-hundredths of a cent per listener per song for every song they play. Commercial radio stations that offer simultaneous Internet transmission have to pay seven-hundredths of a cent per song for each online listener. All radio stations that play music online will be required to pay a minimum fee of $500 per year. All of the fees are retroactive to October 1998, when the Digital Millennium Copyright Act went into effect. Mr. Billington's decision is the final step in a process that began months ago and inspired intense debate and energetic lobbying. Observers say nothing can change the rates now except an act of Congress or a court order. A Copyright Arbitration Royalty Panel, established by the Copyright Office, proposed a rate schedule in February after six months of negotiations. Mr. Billington rejected the panel's proposal in May. But the rates he established are almost identical. He did set fees slightly lower than the panel had recommended for commercial and noncommercial radio stations that broadcast exclusively online. The proposed rate was fourteen-hundredths of a cent per song for every listener, but he set the rate at seven-hundredths of a cent. And Mr. Billington set the rate for noncommercial radio stations that play music online from an archived broadcast at two-hundredths of a cent, lower than the proposed five-hundredths of a cent. The Digital Millennium Copyright Act of 1998 requires radio stations that play music online to pay fees to the recording industry. Mr. Billington had until Thursday to determine what the fees should be. Mr. Billington still has to make a decision on record-keeping requirements for the stations. Under requirements proposed by the Copyright Office, radio stations would have to report each song's title, the artist or group that performed it, the retail album title, the record label, the catalog number, the International Standard Recording Code (which identifies each track of a compact disk), and the date and time of transmission. In addition, the proposal requires that while a song is being broadcast online, the station would have to display online the song name, artist, and album title. The station would be required to maintain a "listener log" that would include the date and time each listener logged in and out of the broadcast. Will Robedee, vice chairman of Collegiate Broadcasters Inc., a trade group for campus radio stations, said the rates Mr. Billington set will drive radio stations away from broadcasting on the Internet. A typical station that plays about 15 songs per hour and has an average of 20 online listeners might pay about $2,000 a year, he said. "This is something that many stations will not be able to afford," he said. With rates this high, even the campus radio stations that can afford to play music online could eventually be driven out of doing so if more and more people listen to their broadcasts over the Internet, said Mr. Robedee, who is also general manager of Rice University's radio station, KTRU. "They'll have to ask themselves, Is that a good thing?" he said. "Can we afford to grow?" Mr. Robedee said he would talk to lawyers and to members of Congress to determine the best course of action for attempting to change the new rates. Cary Sherman, president of the Recording Industry Association of America, said in a statement that multibillion-dollar companies like Yahoo, American Online, RealNetworks, and Viacom would finally pay for the music they played online. But he also said that the rates were not high enough. "The rate, which cannot be squared with the decision of the arbitration panel, simply does not reflect the fair market value of the music as promised by the law," Mr. Sherman said. Easy-to-print version E-mail this article

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