College radio stations fear proposed royalty fees for webcasting songs

College Internet radio advocates reacted with disappointment late last month as the release of a government arbitration panel’s recommendations concerning the fees webcasters must pay record companies signaled another setback in the broadcasters’ battle for existence.

The Copyright Arbitration Royalty Panel released its proposed fee schedule Feb. 21. The U.S. Copyright Office, which set up the panel, will now review the proposal and make a recommendation to Librarian of Congress James Billington, who then has until May 21 to accept or reject the panel’s suggestions.

The fee proposal was less than what the Recording Industry Association of America, a trade group that represents major record labels, had been seeking. Nevertheless, the royalty rates are high enough that many college radio stations say they will be unable to webcast if the fee proposal is accepted.

The panel’s findings stipulate that broadcasters pay seven-hundredths of a cent per song per listener for the online transmission of a normal AM or FM broadcast and fourteen-hundredths of a cent for any other Internet transmission. Noncommercial broadcasters pay two-hundredths of a cent and five-hundredths of a cent, respectively, for those activities. A 24-hour a day webcasting college radio station that plays 15 songs for an average of 25 online listeners each hour, for example, would owe 7.5 cents per hour and approximately $650 per year. (Regardless of all other factors, there is a $500 minimum annual fee.) Once established, the fees will be retroactive to 1998.

“Most [college] stations that I interact with say that they will have to stop streaming,” said Will Robedee, general manager of KTRU at Rice University and creator of a Web site that tracks legal issues related to the Digital Millennium Copyright Act. That 1998 act of Congress made online broadcasters liable to record companies for performance fees.

The legislation also set up a series of reporting requirements that Robedee calls “onerous.” According to the law, for every track played a webcaster must now report to record companies the song title, artist’s name, album title, record label, catalogue number, the International Standard Recording Code embedded in the sound recording and the date and time of transmission.

Unlike commercial radio stations, which select tracks from a limited playlist, many college radio stations are multi-formatted and therefore broadcast an immense number of different songs. In addition, the cost of purchasing computerized systems to automate the mandated record keeping is prohibitive for many college stations, Robedee said.

Last fall, Reps. Chris Cannon, R-Utah, and Rick Boucher, D-Va., introduced legislation aimed at curbing existing digital copyright law (including the DMCA) to promote “a legitimate online music marketplace” that will benefit the public, artists and the industry. The bill, dubbed the Music Online Competition Act, is in committee.