Last week brought more action, and not much in the way of results, as we count down to the July 15 effective date of the new Internet Radio Royalties. The actions that received the largest amount of press coverage were the hearing before the US House of Representatives Small Business Committee, and the offer by SoundExchange suggesting that the minimum $500 per channel fee be capped at $2500 per service. While both initially seemed to offer the prospect of some resolution of the dispute over the Internet Radio royalties that were adopted by the Copyright Royalty Board, in fact neither ultimately resulted in much.
The Committee hearing featured webcasters and musicians – equally divided between those who believed that the royalties were fairly decided, and those who believed that the rates were too high. The one thing on which most of the witnesses seemed to agree was that some rate adjustment was warranted for small webcasters, though no one was able to quantify how such a settlement should be reached. The Congressional representatives, on the other hand, were cautious to act, asking again and again whether the parties were going to be able to settle the case between themselves. While Congressman Jay Inslee testified in favor of his Internet Radio Equality Act, the members of the committee seemed hesitant to act while there were judicial avenues of relief still pending, and the possibility of settlement.
SoundExchange, perhaps sensing some vulnerability on the pending appeal – including the current request for a stay of the decision – made an offer that seemed to resolve one of the most contentious issues – the $500 per unique channel minimum fee which alone would cost webcasters billions of dollars by some estimates. SoundExchange publicized an offer to cap the yearly minimum fee at $2500 – but agreed to that cap only through 2008. This offer was promptly rejected by the Digital Media Association, as it would only postpone the inevitable bankruptcy of some Internet radio companies that have huge numbers of individually generated streams. One almost wonders if this offer was only advanced by SoundExchange to blunt the force of the request now pending before the Court of Appeals seeking a stay of the decision while the appeals are heard.
The pleadings have all been filed on that stay, and the parties are waiting for that action or some other as the clock ticks down to the July 15 effective date of the CRB decision.