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CARP is thrown back - Broadcasting & Cable

CARP is thrown back

Library of Congress won't accept radio streaming royalty rate
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Radio broadcasters will get another chance at reducing the fees they will pay to stream their signals over the Internet. That's after the Library of Congress refused to adopt the rate agreed to last February by the Copyright Arbitration Royalty Panel (CARP).

Since February, radio broadcasters and Internet-only Webcasters have been lobbying fiercely against the rate, which CARP said should be 0.07 cents per song per listener for traditional radio broadcasters and 0.14 cents per song per listener for Internet-only radio stations.

The fees would be paid to record companies and artists, who initially wanted more but then accepted the suggested rates. Radio broadcasters already pay fees to music publishers ASCAP and BMI but much less than those CARP says should be paid to record companies.

CARP is managed by the U.S. Copyright Office, part of the Library of Congress. Librarian of Congress James Billington rejected the rate based on the recommendation of Mary Beth Peters, registrar of copyrights. By law, Billington must issue a final decision by June 20; it is possible that decision will include new rates. But Billington also could remand the whole process back to a new CARP. That would be expensive, sources say. Administrative costs alone last time ran more than $1 million, not counting legal fees.

This proceeding covers 1998-2002. This fall, the Copyright Office is supposed to hear arbitration for the next four years.

While sources say inter-industry negotiations aren't going on yet, the June 20 date gives the industries an opportunity to hash out a rate on their own, which Congress would prefer. Two weeks ago, Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and ranking member Orrin Hatch (R-Utah) pushed the industries to negotiate an independent settlement or possibly face legislation.

The House is also getting into the act. The House Courts and Intellectual Property Subcommittee has penciled in a June 13 hearing to examine the CARP process; in April, House Judiciary Committee Chairman James Sensenbrenner (R-Wis.) collected comments from involved parties in order to begin writing reform legislation.

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