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Many Webcasters who have elected the the royalty rates set by many of the settlement agreements entered into pursuant to the Webcasters Settlement Act must file an election notice with SoundExchange by January 31 to continue to be covered by those settlement agreements.   These agreements were entered into by groups of webcasters and SoundExchange, and allow the webcasters to pay royalties at rates lower than those rates set by the Copyright Royalty Board for 2006-2010.  January 31 is an important date even for those webcasters who are covered by agreements that don't demand an annual election, as most Internet radio operators must make annual minimum fee payments by January 31.  SoundExchange does not send out reminders of these obligations, so Internet Radio operators must remember to make these filings on their own.  The original election forms filed under settlement agreements signed by the NAB and by Sirius XM cover the entire settlement period from 2006-2015, so no election form must be filed each year, though minimum fee payments must still be made.  Note that certain small broadcasters, who need not meet SoundExchange recordkeeping obligations, do need to file an election to certify that they still meet the standards necessary to count as a small broadcaster.  The WSA settlement agreements that cover Pureplay webcasters, Small Commercial webcasters, Noncommercial Educational webcasters and other noncommercial webcasters all are entered into on a year-by-year basis.  Thus, to continue to be covered, parties currently governed by these agreements need to file a Notice of Election to again be covered by these agreements by January 31 (though note that the SoundExchange website provides for filings by February 1, presumably as January 31 is a Sunday).

The election forms are available on the SoundExchange website, though they are not easy to find. The forms that must accompany the annual minimum fees are also on the SoundExchange website.  Note that in some cases there are forms that cover both webcasters who paying under a particular settlement, as well as under the special provisions for small entities that are covered by these same agreements (e.g. Small Pureplay webcasters file a different form than other Pureplay Webcasters even though both are governed by the same agreement.  Similarly Small Broadcasters file a form different than other broadcasters, though both are covered by the same agreement).  These forms can be found at the links below.  Click on the name of the category of webcasters for a link to our article that summarizes the particular settlement, the minimum fees required, and the qualifications for small webcasters under that deal (if there is such a provision):

• Broadcasters minimum fee form - here.
• Small broadcasters election form - here.  Minimum fee payment form - here.
• Pureplay webcaster election form - here.  Minimum fee payment form - here.
• Small pureplay election form - here.  Minimum fee payment form - here.
• Small commercial webcaster election form - here.  Minimum fee payment form - here.
• Microcaster election form - here.  Minimum fee payment form - here.
• Noncommercial educational webcaster election form - here.  Minimum fee payment form - here.
• Other noncommercial webcaster election form - here.  Minimum fee payment form - here.
• Noncommercial microcasters election form - here. Minimum fee payment form - here.
• Satellite radio (for their webcasting operations - a deal that may also fit other commercial webcasters who are not covered by other agreements) minimum fee payment form - here.

Note that there is no specific form for NPR affiliates covered under the NPR settlement, as an organization set up by the Corporation for Public Broadcasting handles all payments and SoundExchange filings.  Other companies providing Internet radio services need to pay attention to these dates - and file the necessary papers and make the required payments by the upcoming deadline. 

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Last year’s Court of Appeals decision on Internet radio royalties for 2006-2010 remanded one issue to the Copyright Royalty Board for further consideration – the issue of the minimum annual fee to be paid by each webcaster. The Copyright Royalty Judges (“CRJs”) had decided on a $500 per channel minimum fee – a fee that created much concern in the Internet radio community as there was no clear delineation of what a channel was. For services, like Pandora, where there is a unique stream created for each listener, by some definitions there could be an almost infinite number of channels all subject to the $500 minimum fee. Following the CRB's initial decision, a number of the larger webcasters and SoundExchange entered into a settlement capping the minimum fee obligation at $50,000 per webcaster per year. Thus, services with more than 100 channels would only pay a minimum fee of $50,000 at the beginning of each year. However, this settlement was never extended to all webcasters - it applied only to those webcasters who signed the deal.  Following the Court remand, SoundExchange and DiMA (the Digital Media Association which represents many webcasters), submitted the 2007 settlement to the CRB to be codified into the rules that govern webcasters generally. Just before Christmas, the CRJs asked for comments on that settlement. Comments are due by January 22. 

In many cases, this settlement has been superseded by subsequent events – namely the settlements with webcasters that were entered into in February and then later in the summer under the provisions of the Webcaster Settlement Acts. Settlements with broadcasters, pureplay webcasters, small commercial webcasters and various noncommercial groups all set their own minimum fees (and, for the most part, cover the periods through 2015), and thus this proceeding is largely irrelevant to these webcasters. If this settlement is approved, the only remaining question before the CRJs on the remand of the 2006-2010 proceeding will be the minimum fee for some noncommercial groups that did not enter into any settlement, as this agreement on minimum fees applies only to commercial webcasters.

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The four settlement agreements between SoundExchange and different groups of webcasters were published in the Federal Register today, setting the dates by which Internet radio operators need to opt into the terms of certain of these deals by filing a Notice of Election with SoundExchange.  The deals each have different opt in dates, so it does get confusing.  For larger webcasters interested in taking advantage of the rates set by the Sirius XM deal (which we summarized here), their notice must be filed on this form with SoundExchange within 15 days.  For noncommercial webcasters wishing to take advantage of the deal struck with the Northwestern College on behalf of Religious Broadcasters, but open to any noncommercial webcaster (a deal we summarized here), the option to be included in this deal must be made by an existing webcaster by September 15 (on this form for most noncommercial webcasters, but on this one, and similar forms for 2006 - 2008, for those eligible for the microcaster provisions).  Noncommercial webcasters affiliated with educational institutions who want to take advantage of the record-keeping breaks contained in that Noncommercial Educational deal, also summarized here, apparently need not submit a form until it pays its minimum fee for 2010, but the end of January.  As the fourth deal, with the Corporation for Public Broadcasting, does not even affect periods until 2011, affiliated stations need not file a notification with SoundExchange at this time, though CPB may have its own opt-in requirements for its member stations.

As we've written before (here and here), these deals are on top of the Pureplay settlement, summarized here, where an Internet radio station can still opt in by submitting this form by August 17 (or a small pureplay webcaster can file this form by that same date).  Broadcasters have had their own settlement (summarized here and here), where the opt in dates have passed, as have the dates for opting into the  "microcasters" deal for small commercial webcasters (see our summary here).  New stations just launching have the option to select from any of these alternative rate structures.  It is a confusing jumble of regulations that a webcaster needs to carefully sort through to determine which set of rates would best fit their own business model.  Read these deals carefully, as all have details that must be observed to insure full compliance.

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Monday, July 16th is the first business day after the effective date of the new Internet Radio royalties set by the Copyright Royalty Board.  As we wrote earlier this week, the Court of Appeals has denied the requested stay of the effective date.  And, while a bill was introduced in Congress this week to provide for a legislative stay, that will not be acted on by Monday, nor will action occur on the broader Internet Radio Equality Act.  Thus, many webcasters are asking what they should do on July 16.  Some have suggested that they should stop streaming, while others have wondered what will happen if they don't pay the higher royalties.  This decision is one that each webcaster should make carefully, in consultation with their counsel and business advisers.  But there are some practical considerations that should be taken into account when making the decision as to what should be done on Monday.

First, it should be noted that not all webcasters are equally affected by the royalty rate increase.  Larger commercial webcasters, including most broadcasters who are streaming their signals on the Internet, should have been paying royalties up to now that, while lower than those adopted by the CRB, have increased by "only" about 40%  - from $.00076 per performance (per song per listener) to $.0011 per performance.  These rates will continue to increase between now and 2010 so that they eventually will reach $.0019 per song per listener.  But for now, the increase is relatively modest (as compared with some of the other increases discussed below).  While there are reportedly at least some conversations going on between SoundExchange and groups representing broadcasters and large webcasters about reaching some sort of accommodation on royalties, there is no certainty that any deal will be reached, so these webcasters probably should be paying the higher royalties (and hoping for a credit against future royalties should there be an agreement reached in the future to reduce these royalties, a successful appeal, or future legislative action reducing the royalties).

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