WEBCASTING ROYALTY DECISION REJECTED, NEW FIGURE DUE JUNE 20
Librarian of Congress James Billington Tues. rejected arbitrator’s report setting royalty rates for Internet radio broadcasting and said he would issue his final decision by June 20. Brief May 21 order said, “the Register of Copyright recommends, and the Librarian [of Congress] agrees, that the [Copyright Arbitration Royalty Panel’s (CARP’s)] determination must be rejected.”
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Fact that Librarian rejected report is just first step, said source knowledgeable about process. Copyright Office now will review voluminous documents submitted over months of hearings and forward recommendations to Librarian, who will make final decision, source said. Rejection doesn’t nullify CARP report, source said -- it simply means that something in it was found to be unacceptable and that Librarian now will have to resolve matter. Parties will have no further input into process, source said.
In Feb., CARP announced statutory license rates of 0.07 cents per performance for simultaneous Internet retransmissions of over-air AM/FM radio broadcasts, and 0.14 cents per performance of all other Internet transmissions (CD Feb 21 p8). Rates would apply to both Webcasters and commercial broadcasters. Panel also called for ephemeral license fees of 9% of performance fees due. CARP decision angered all sides in dispute, with recording industry branding rates as too low and Webcasters and broadcasters fretting that royalties, if left standing, would strangle their online services (CD Feb 22 p4). All sides petitioned Copyright Office to set aside CARP’s decision (CD March 12 p3).
Content owners and Webcasters reacted cautiously to Tues. order. By enacting Internet radio statutory license, Congress intended to promote both new medium and artists’ welfare, said Jonathan Potter, exec. dir. of Digital Media Assn. Librarian’s decision “offers hope that the final royalty will be more in line with marketplace economics than was the arbitrator’s proposal,” and therefore more in line with Congress’s goals, Potter said.
Although Librarian rejected CARP report, “we do not know why or what decision the Librarian will ultimately make based on the evidence presented,” RIAA Pres. Cary Sherman said. Content owners look forward to conclusion of process June 20, he said, “and to the day when artists and labels finally get paid for the use of their music.” SoundExchange Exec. Dir. John Simson said he wasn’t surprised by Librarian’s decision given complexity of issues. SoundExchange will “continue our discussions with Webcasters to see if long-term solutions can be reached in the marketplace,” Simson said.