Senators Comment on Webcast Royalty Negotiations

Washington, DC (August 7, 2007) -- U.S. Senators Sam Brownback (R-KS) and Ron Wyden (D-OR), co-sponsors of the Internet Radio Equality Act, released a statement regarding the ongoing negotiations between SoundExchange and webcasters over royalty rates.
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Washington, DC (August 7, 2007) -- U.S. Senators Sam Brownback (R-KS) and Ron Wyden (D-OR), co-sponsors of the Internet Radio Equality Act, released a statement regarding the ongoing negotiations between SoundExchange and webcasters over royalty rates.

SoundExchange, the collection agency working on behalf of record labels and artists, has offered to cap the per channel minimum fee for those streaming multiple channels on the condition that webcasters provide more detailed reporting of the music they play and work to implement digital rights management to prevent 'streamripping.'

The senators stated, "We sponsored the Internet Radio Equality Act because the Copyright Royalty Board's decision to dramatically increase royalties and apply what we see as unfounded minimum rates threatens to devastate the Internet radio industry. The fact is online radio services do not have enough revenue to support what will amount to unprecedented royalties. The $500 per channel minimum fee alone will deliver an over $1 billion annual windfall to record companies, a windfall that is not justified by any business or equity considerations."

The proposed Internet Radio Equality Act would base royalties on a percentage of revenue scheme similar to that of satellite and cable radio broadcasters. Under the legislation, smaller webcasters with negligible revenue would be exempt.

The statement continued: "Now we are hearing that the recording industry is attempting to use this aspect of the CRB decision to force webcasters to adopt recording restrictions far in excess of the controls that have governed broadcast content for decades. While we strongly support a negotiated solution, we will not allow the minimum fee issue to be used to force an agreement that mandates DRM technology and fails to respect the established principles of fair use and consumer rights."

But a Wired story published August 6 reports that the Internet Radio Equality Act "is losing steam in the House of Representatives" and is unlikely to pass. The magazine also reports that SoundExchange has set up a public relations group, the musicFIRST Coalition (Fairness In Radio Starting Today), "with the sole mission of implementing a sound recording performance royalty on terrestrial radio stations." U.S. terrestrial radio stations have traditionally paid no broadcast performance royalties.

Senator Sam Brownback
brownback.senate.gov

SoundExchange
www.soundexchange.com