Royalty ruling brings frowns all around


Commercial radio broadcasters received almost no relief from the Librarian of
Congress Thursday, while pure-play webcasters saw their fees cut in half.

Librarian James Billington released his final ruling on the royalties radio
broadcasters and webcasters must pay record companies to stream copyrighted
music over the Internet.

Billington ruled radio broadcasters still must pay .07 cents per song per
listener when simultaneously streaming their radio signal online.

"The Librarian's decision places a prohibitive financial burden on
radio-station streaming, and will likely result in the termination of this
fledgling service to listeners," said National Association of Broadcasters
President Eddie Fritts.

This summer, the NAB plans a court challenge of the rule, written by the U.S.
Copyright Office, that requires radio broadcasters who stream their signals to
pay royalty fees to record companies.

Billington did reduce by .2 percent the fees broadcasters pay for what is
known as an "ephemeral license," bringing the fee down to 8.8 percent from 9
percent. That license covers the automatic copies computers and other digital
devices make of streaming material.

Pure webcasters -- those who have Internet-only radio stations -- fared
better, however, seeing their fees cut in half to .07 cents per song per
listener, down from .14 cents.

Still, they weren't happy either, calling the fees a tax that webcasters will
have to pay every time they transmit a song, according to Alex Alben, vice
president of Real Networks. Alben also said webcasters are pursuing a
legislative fix for the problem.

The Recording Industry Association of America, whose record company members
will receive less money from webcasters as a result of the decision, immediately
blasted it: "The import of this decision is that artists and record labels will
subsidize the webcasting businesses of multi-billion dollar companies like
Yahoo, AOL, RealNetworks and Viacom," said Cary Sherman, RIAA