Net Radio's Silent Tuesday: Anyone Listening?

Much of Internet radio is silent today in protest of a dramatic copyright royalty fee hike scheduled to take effect July 15. But is anyone listening?

Net radio industry group SaveNetRadio, which organized the event, thinks so. The group is estimating that between 20,000 and 30,000 people have called congressional representatives as a result of the National Day of Silence event.

KCRW in Santa Monica, California, is silent today, but as of noon Pacific time it hadn't received any calls of complaint. Spokesperson Rachel Reynolds says KCRW promoted Silent Tuesday so much that its Web listeners all know the reason for the silence. When you attempt to turn on KCRW's live stream, you hear a message about the rate hike's potential effect on KCRW webcasts.

"What we're doing is trying to band together with other Net radio stations to show what's going to happen if things go forward the way they are now," says Reynolds.

Countdown to July 15

SaveNetRadio says the rate hike will increase fees for large Webcasters by 300 percent and those for smaller ones by as much as 1200 percent. The new higher rates will go into effect on July 15, and are retroactive to the beginning of 2006. Many Net radio stations say they'll simply go off the air if the new rates take effect.Though the National Day of Silence is meant to raise awareness of Net radio's plight, more specifically it's meant to pressure Congress into actively blocking the rate hike. Bills that would do just that were introduced in both the House and the Senate early last month, but neither is speeding toward passage.

The House bill, called The Internet Radio Equality Act, will be discussed Thursday in the House Small Business Committee. (Read a PDF of the bill.) Its companion bill (of the same name) in the Senate has been introduced but has seen no further action.

SaveNetRadio spokesperson Jake Ward says he expects to see action on the Senate bill after today's awareness efforts.

The Royalties Controversy

The whole royalty fee controversy started March 2 when the Copyright Royalty Board at the National Copyright Office approved the higher rates. The Recording Industry Association of America (RIAA) collects the fees for music copyright holders; though it collects the fees for independent musicians as well, the lion's share of the fees are for record labels.

For many smaller Webcasters, the higher fees themselves aren't even what will cause the greatest harm. Dick Kunkel, general manager at KPBX in Spokane, Washington, says the new royalty rate regime will hurt his station most by creating a mountain of paperwork. Kunkel says that, beginning July 15, the RIAA wants his station to report how many listeners tuned in to specific records at specific times dating back to the beginning of 2006. Kunkel says his station doesn't have the software or manpower to do that, and might be forced to shut off the Internet stream.

Net Radio's Motivations Questioned

SoundExchange, the royalty-collecting arm of the RIAA, believes that the National Day of Silence will only remind people that copyright holders deserve to be paid when their music is played on Net radio. "They may be getting a lot of attention, but what they are getting attention for is that without music there will be no Net radio," says SoundExchange spokesperson Richard Ades. "They're getting out the message about how important the music is, and how important the people are who make the music." Ades says that of all the royalties SoundExchange collects, half are paid directly to artists.

The RIAA and SoundExchange question the real motivations behind the Day of Silence and the whole SaveNetRadio cause. SoundExchange has said on numerous occasions that SaveNetRadio is really fighting for the interests of big Webcasters like Yahoo and Clear Channel, and not small players like KPBX.

SoundExchange has offered to give qualifying small Webcasters until 2010 to start paying the higher rates. "There's a sense in the music community and in Congress that small Webcasters need more time to develop their businesses," says John Simson, executive director of SoundExchange. Negotiations continue.

This story, "Net Radio's Silent Tuesday: Anyone Listening?" was originally published by PCWorld.

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