Latest webcasting royalty developments

Jun 08, 2007 4:10 am
From Broadcast Law Blog:
The past few days have been eventful ones in the battle over Internet radio royalties. Appeals from the decision of the Copyright Royalty Board decision (see our memo explaining that decision, as well as our coverage of the history of this case) were submitted by virtually all of the parties to the case. In addition, the National Association of Broadcasters, which had not previously been a party to the case, filed a request to intervene in the appeal to argue that the CRB decision adversely affects its members. Also in Court, a Motion for Stay of the decision was submitted, asking that the CRB decision be held in abeyance while the appeal progresses. The "appeals" that were filed last week are simply notices that parties dispute the legal basis for the decision, and that they are asking that the Court review that decision. These filings don't contain any substantive arguments. Those come later, once the Court sets up a briefing schedule and a date for oral arguments - all of which will occur much later in the year. As the CRB decision goes into effect on July 15, absent a Stay, the appeal would have no effect on the obligations to begin to pay royalties at the new rates.

The Stay was filed by the large webcasters represented by DiMA, the smaller independent webcasters that I have represented in this case, and NPR. To be granted a stay, the Court must look at a number of factors. These include the likelihood that the party seeking the stay will be successful on appeal, the fact that irreparable harm will occur if the stay is not granted, the harm that would be caused by the grant of a stay, and the public interest benefits that would be advanced by the stay. The Motion filed last week addressed these points. It raised a number of substantive issues including the minimum per channel fee set by the CRB decision, the lack of a percentage of revenue fee for smaller webcasters, and issues about the ability of NPR stations to track the metrics necessary to comply with the CRB decision. The Motion raised the prospect of immediate and irreparable harm that would occur if the decision was not stayed, as several webcasters stated that enforcement of the new rates could put them out of business.

SoundExchange will have the opportunity to respond to the Motion, and the Court will then consider its merits. Watch to see a decision on the Motion by July 15. In addition to the actions in Court, SoundExchange publicized an offer of settlement made to noncommercial webcasters, an offer which was similar to that made to small webcasters (summarized here) - extend the provisions of the Small Webcaster Settlement Act until 2010, with a few tweaks. The SWSA for noncommercial webcasters required fees of between $250 and $500 per year for each noncommercial webcaster, as long as the webcaster had less than 146,000 aggregate monthly tuning hours of listening. If the webcaster exceeded that listening, it would pay at the rate of .251 cents ($0.00251) per aggregate tuning hour over the limit. The SoundExchange offer suggested a few tweaks, including requiring that noncommercial webcasters provide records of use of sound recordings - something not required under the SWSA. The current requirements for Internet radio recordkeeping are summarized here.

The offer was made to a number of noncommercial webcasting groups, so there will need to be negotiations before any deal is final. And as NPR had its own deal arrived at outside of the SWSA framework (a deal that is not public), they may well have concerns with this proposal which requires the same sort of record keeping about which its has expressed concerns in the Motion for Stay.
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