11th-hour deal provides fewer fees for college webcasters

WASHINGTON,D.C. –– Internet-savvy college radio stations that haltedstreaming music online out of fear of running up excessive charges may now beable to resume webcasting with a peace of mind.A royalty agreement wasreached between a symposium of noncommercial webcasters and the RecordingIndustry Association of America on the brink of its May 31 deadline set byCongress under the Small Webcaster Settlement Act. The settlement reduces thefees meant to compensate record labels and artists for music broadcasted onlineand eliminates burdensome record-keeping requirements through 2004. Therequirements were imposed by the Librarian of Congress under the 1998 DigitalMillennium Copyright Act. Under the new terms, college and K-12webcasters at schools with an enrollment of less than 10,000 students will pay afixed rate of $250 per year. Schools with enrollment of more than 10,000 willpay $500 per year. In both cases, the stations may also be responsible forpaying up to .02 cents per listener per song played, but only if Web userslisten to more than a total of 146,000 hours worth of music per month. This isequivalent of 200 people listening 24 hours a day. For stations that go abovethe limit, they must monitor the number of listeners and the duration eachlistener visits the site with computer software. However, this monthlylimit is one few campus stations will reach, considering most college radiostations average about five to 10 listeners an hour, according to MichaelPapish. Papish is the technology and policy adviser for HarvardUniversity’s WHRB and the Intercollegiate Broadcasting System, a nonprofitorganization representing more than 800 educationally affiliated stations. Formost stations, he said the likelihood of going above the 146,000 threshold isslim, and the flat fee gives webcasters room to grow. “Right now,these numbers make a lot of sense,” he said. “Certainly five or 10years from now when Internet radio is a lot bigger, 200 simultaneous listenerswill not be enough, but these rates will be renegotiated again at the end of2004, and other factors such as increased listeners will be considered.”If a station has webcast in the past, it is responsible for paying therequired fees but at a lower rate than the one set by James H. Billington, theLibrarian of Congress in June 2002. Under the previous requirements, allnoncommercial stations were to pay .02 cents per listener per song, and aminimum annual fee of $500 was required. Commercial radio stations currentlypay .07 cents per listener per song and the same annual fee. College radiostations were looking at payments as high as $5,256 per year, and payment wouldhave been retroactive to October 1998.Will Robedee, general manager forRice University’s KTRU and founder of the Save Our Streams Web site thattracks Digital Millennium Copyright Act issues, said that the result of thenegotiation ensures that stations interested in pursuing or continuingwebcasting can do so without trepidation.“For stations that havebeen streaming, [the new agreement] means a lot less money that must be paid outfor streaming that they have done in the past and will do in the future,”said Robedee. “Most fundamentally, it removes the question of ‘howmuch are we going to be charged’ and ‘what kind of record-keeping dowe have to do.’ That vagueness has kept a lot of stations from webcastingbecause they didn’t feel they could webcast not knowing what theirliability would be.”The agreement states that any noncommercialstation that currently or previously played music online will pay a fixed rateregardless of enrollment or listeners. From 2000 to 2003, stations will pay $250for each year of webcasting; a fee of $200 was set for 1998 and 1999, whichcounts as one year.Station mangers, apprehensive about keeping up withthe intricate cataloging system that was initially required with their smallstaffs, can breathe a collective sigh of relief. The settlement eliminates therecord-keeping requirements through 2004. Papish suggested that record-keepingrequirements could have required disc jockeys to list the artist, song played,the number of times played and the number of Web listeners while the song aired.Instead, noncommercial webcasters will pay $50 for 2003 and $25 in 2004 in lieuof record-keeping responsibilities.All noncommercial webcasters haveuntil October 15, 2003, to make all payments for streaming between 1998 through2003. New stations must pay the applicable fees within 45 days of its firstwebcast.The agreement also allows stations that paid royalties under theold rate plan to have their accounts with SoundExchange, an organization ofrecording companies and artist representatives, credited toward the newlyimplemented fees. Papish said that in the past neither side reallystepped forward to acknowledge that a compromise must be made. Duringnegotiations Papish said both SoundExchange and the noncommercial entitiesrealized, however, that in order to coexist a balance must be achieved.“The partnership we created in this agreement, to facilitate theaccurate reporting of performances on these services at an affordable cost,illustrates our commitment to compensating artist and copyright owners for theirhard work,” said John Simson, executive director of SoundExchange, in arecent statement.Papish remains optimistic about the future ofnoncommercial webcasting and believes that the agreement is a step in the rightdirection. He said the motivation behind college webcasting is much differentthan the stations’ commercial, big radio counterparts, and, in the age ofthe Internet, the benefits of streaming are in their favor ––allowing webcasting to flourish. “Noncommercial webcasters have adifferent goal in mind, they want to bring different kinds of music andprogramming to an audience and educate people to bring them something theycan’t get anywhere else. The Internet and Internet radio is much bettersuited for that goal than making large profits,” said Papish.Butthe benefits of webcasting go far beyond diversifying music programming,according to Robedee. College stations are nonprofit, educational entities, andwebcasting should be used as a tool for furthering students’development.“[Webcasting] allows students to use the Internet in away that will allow them to have their audio potentially broadcasted all overthe world. It offers educational opportunities to students if there are collegesand universities [that] for whatever reason can’t have a broadcastingstation, this allows them to start new programs relatively inexpensively,”said Robedee.Ohio Northern University’s WONB began webcasting backin 1999 and was forced to stop streaming, along with many other collegestations, in February 2002 due to heightened uncertainty about cost factors anddocumentation expectations. Richard Gainey, the general manager and adviser forWONB, is satisfied with the agreement and said that they plan on going backonline as soon as possible with their efforts supported by theuniversity.“We are looking forward to streaming audio againbecause we have a diverse student body, and, for many of the parents of ourstudents, webcasting is a way for them to hear and feel closer to their childrenall over the country.” For schools that did not stop webcasting,the response to the agreement is more subdued. University of Louisiana atMonroe’s KXUL, with a worldwide audience that reached Switzerland, Chile,Japan and Belgium just last month, continued webcasting despite the fees. ForKXUL, the agreement simply means that they will be able to keep operating, saidJoel Willer, general station manager and assistant professor of masscommunications. “The agreement is something that we’veworked hard over the last two years for, and it’s some relief to havecertainty through 2004. Other campuses feel a relief that they will be able tocontinue or the excitement that they will be able to begin or return to streamsthat had been previously removed from the Web,” he said. Despitethe fee resolution, problems continue to persist for college webcasters. Theyare still limited in the number of songs from a CD or boxed set that they canplay consecutively or in a three-hour time period. Willer said he fears that therestrictions on the number of listeners and the content of the webcasting willseverely handicap college stations’ potential growth in thefuture.“During negotiations there was an indication from RIAA thatthey understood the numbers [in the new agreement] would need to beadjusted,” he said. “But for now, only time will tell whether theystand by that.”

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