Radio stations to pay record cos. to stream

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Radio stations will have to pay record companies 0.07 cents per performance
for songs and works if they choose to retransmit their signals over the
Internet, the U.S. Copyright Office ruled Wednesday.

Radio stations will also have to pay 9 percent of those total fees for what
is called an 'ephemeral license,' which is the shadow digital copy made when
items are copied from one computer to another.

Radio stations and Webcasters, such as Internet-radio stations, had argued
for a rate around 0.015 cents per song, while record companies wanted a rate
close to 0.4 cents.

Apparently, the arbitration panel arrived at a rate somewhere in the middle
after listening to six weeks of testimony from both sides late last summer.

One observer noted that the rate was high enough from the radio-station
perspective that station owners would likely choose not to stream their
services.

Both sides said they supported the decision, but neither was overly
enthusiastic.

'We would have preferred a higher rate. But in setting a rate that is about
10 times that proposed by the Webcasters, the panel clearly concluded that the
Webcasters' proposal was unreasonably low and not credible,' said Hilary Rosen,
president of the Recording Industry Association of America.

Webcasters that stream nonsubscription services and noncommercial
broadcasters are subject to the same fees, according to the Copyright Office's
ruling.

'We are pleased that the arbitration panel has recommended royalty rates for
Internet-radio broadcasting and that its recommendation is much closer to the
royalty rate proposed by the Webcast industry than was proposed by the recording
industry,' said Jonathan Potter, executive director of the Digital Media
Association (DiMA).

'We are extremely disappointed, however, that the panel's proposed rate is
not significantly lower, as a lower rate would more accurately reflect the
marketplace for music-performance rights and the uncertain business environment
of the Webcast industry,' he added.

DiMA plans to contest the rate through further comments to the Copyright
Office.

The National Association of Broadcasters did not comment by press
time.

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