March 2007

Monday was the deadline for the filing of Motions for Rehearing of the decision of the Copyright Royalty Board decision on Internet radio music royalties for 2006-2010.  As we have written before, the decision proposes significant increases in the royalties, particularly for independent webcasters who have up to now paid royalties on a percentage of revenue basis, rather than on the per song per listener basis set out in the CRB decision.  In motions filed today, many of the webcasters challenged specific aspects of the CRB decision.  And at least one party raised an issue that seems to contradict the very foundation of the Board’s decision.  Plus, in virtually all of the rehearing motions, the parties noted that additional issues may be raised on appeal to the US Court of Appeals, which do not need to be filed for several weeks.  

In the Motion filed by the Broadcasters’ group, it was argued that an expert witness offered by SoundExchange in the proceeding which is now underway to determine royalty rates for satellite radio contradicted some of the basic assumptions used by SoundExchange’s witness in this proceeding.  If the assumptions used by SoundExchange’s expert in the satellite proceeding were to be applied in this case, the royalties would actually decrease from those that were in effect before the Board’s decision. The assumptions used by the expert in the satellite proceeding seemed to confirm the claims offered by the webcaster’s witnesses in this proceeding.  Could this be a smoking gun that could undermine the decision of the Board?  We’ll have to see if the Board accepts this new evidence which seems to challenge the very foundation of the webcasting decision.

As the appeals are addressed to the CRB itself, asking that it reconsider or review its own decision, most of the other issues focused on limited matters that the parties thought that the Board might want to clarify as to avoid unintended consequences.  For instance, the appeals of the DiMA group, representing large webcasters, and the appeal that I worked on for the small commercial webcasters, both addressed the issue of the $500 per channel minimum fee which, if it was to be paid on literally every unique channel streamed by a service, could mean that some webcasters could pay hundreds of thousands or even millions of dollars as a minimum fee.  Some webcasters (like Pandora) serve up a unique stream for every listener.  Virtually all of the parties also addressed the question of whether most webcasters could even compute a royalty based on a per song per listener basis.  This is especially true for retroactive payments, when many webcasters did not keep such records (especially those small commercial webcasters paying on a percentage of revenue basis, or noncommercial webcasters who had payed on a flat fee basis).  Continue Reading Motions for Rehearing of Copyright Royalty Decision Filed – And the Foundation of that Decision is Challenged

We have been covering the controversy over the rise in the royalties for all those who are providing an Internet radio service, whether they be over-the-air broadcasters streaming their signals on the Internet or pure webcasters whose stations are only available on the web.  Our previous postings on the topic can be found here.  Today…

The Agenda for next week’s FCC meeting includes the consideration of 76 groups of mutually exclusive applications for new noncommercial FM stations.  Many of the 200 or so applications contained in these groups have been pending at the FCC for almost 10 years.  Several years ago, the FCC adopted a point system to resolve cases involving these applications as…

On March 12, the National Telecommunications and Information Administration ("NTIA") released its Final Rules for the Digital-to-Analog Converter Box Coupon Program (Coupon Program).  This program is designed to allow consumers to purchase converter boxes which will allow analog televisions to receive over-the-air broadcast signals after the February 17, 2009 transition date when all full-power television broadcasters will be broadcasting only in digital.  This was a long-awaited action that many view as a necessary step before the country can meet the February 2009 digital conversion deadline.  The Order gives details of the implementation of the converter box program, providing guidelines for consumers, retailers and equipment manufacturers.  Details of the program are set out below.

The heart of the program is the coupons to be distributed to consumers.  Starting January 1, 2008, all U.S. households can request up to two $40 coupons than can only be used toward the purchase of two digital-to-analog converter boxes. There is no needs test, i.e. any household that wants coupons can request them, regardless of household income.  Only one coupon can be used for each converter box.  The coupons will be in the form of an “electronic coupon card;” like a gift card, but they will not carry any value that can be used for anything but a converter box.  The coupons will expire three months (90 calendar days) after the coupon is placed in the U.S. mail. In no case may consumers receive any cash value for the coupon so, if the cost of a converter box is less than $40, consumers cannot receive a refund or credit towards the purchase of another item. Consumers are also prohibited from selling their coupons. If a converter box does not work properly, consumers will be permitted an exchange only for another converter box. Applications for coupons will be accepted only between January 1, 2008 and March 31, 2009 and will be able to be requested by mail, by phone, by fax, or through a website.

Only households are eligible for coupons. No business, schools, or similar entities are eligible. Also, multifamily residences (i.e., a residence occupied by more than one family unit) will not be eligible for more than two coupons unless each household has separate living quarters and has a separate U.S. postal address. Because Post Office Boxes are prevalent on Indian Reservations, Alaskan Native Villages and other rural areas, these households may be required to supply additional information to identify the physical location of the household.  An NTIA  fact sheet for consumers summarizing the above information can be found here.Continue Reading NTIA Releases Details of DTV Converter Box Coupon Program

I’ve received several calls in the last week asking if the political broadcasting rules apply to municipal elections – such as elections for mayor, city council, or school board.  Even though this is an "off year" for Federal elections, many communities around the country have local elections, and in some of those elections, candidates have sought…