Webcasters have challenged a new ruling from a panel of copyright judges that they contend will cripple the emerging business of offering music broadcasts over the Internet.
The new rules, proposed last month by the Copyright Royalty Board, have drawn an outcry of protest. Clear Channel Communications, National Public Radio (NPR) and groups representing both large and small companies providing music broadcasts online have asked for reconsideration.
That ruling would dramatically increase the amount of royalties that online music broadcasters would have to pay to record labels and performers. It would also force webcasters to track online usage.
If upheld, the rules would require webcasters to pay each time a listener hears a song, at a rate that began at 8 cents in 2006 (the ruling applies retroactively) and rises to 19 cents in 2010. Besides increasing the charge for each song, the ruling established a $500 minimum payment for each Web channel — making it difficult for companies like RealNetworks and Pandora to offer as many different kinds of music as they do now.
The royalties in dispute only apply to digital transmissions of music, such as through Web sites, and are paid to the performers of songs and record labels. Webcasters also pay additional royalties to the composers and publishers of music, similar to those also paid by over-the-air broadcasters.
NPR said the new rules would have "crippling effects" on public radio's ability to meet its mandate of serving the public interest. NPR also said it intended to appeal the overall decision to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C.
