Senator Feinstein’s Sorry Response To Net Radio Copyright Fees
I sent Senator Dianne Feinstein an e-mail last week urging Congress to take action to prevent the implementation of a dramatic rate increase in royalty fees for Internet radio. Her response to this issue is highly disappointing and demonstrates a lack of understanding about how Internet radio, and the recording industry in general, work. This paragraph is especially laughable:
I am a strong believer in intellectual property rights and believe that artists and performers have earned the right to be fairly compensated for the broadcast of their works by webcasters who benefit - financially and otherwise - from their talents. Without fair compensation, these artists would not create their works.”
For a better understanding of how artists (DON”T) benefit, and how these copyright earnings really go to the industry and not to the musicians, read Steve Albini’s excellent essay, “The Problem With Music.“
Senator Feinstein claims that, “While some webcasters may choose to pay this rate, independent negotiations between the parties are still possible,” neglecting to mention that almost all Internet radio stations make little or no money and don’t have the clout, leverage or time to participate in negotiations with the RIAA. She also claims that, “the judges set a rate designed to approximate the fair-market value,” but these new rates will effectively put the vast majority of Internet radio stations out of business. Her claim that the new rates are only a 5 percent increase is ludicrous, because radio stations will have to base the rates on a per listener per song basis after a one year exemption, which was granted this week, instead of at the current average listener hours standard. I broke down a scenario of the new rates before.
These new rates only serve the RIAA’s own perceived interests (though the industry seems more and more like it wants to commit suicide) and terrestial radio stations, which are exempt from these fees. Somewhat suprisingly, Clear Channel and other large terrestial radio companies (including NPR) urged the Copyright Board not to implement these new fees. Clease Channel currently operates Internet radio stations and apparently they have people smart enough to see that the future for radio is mainly on the Web.
For more information on how you can help save Internet radio, visit www.savenetradio.org. To let Senator Feinstein know your take on this issue, give her a call (202) 224-3841 or send her an e-mail.
Thank you for writing to me with your concerns about the Copyright Royalty Board’s recent decision on the statutory rate for music webcasting. I understand your concerns and appreciate the opportunity to respond.
Under the Copyright Royalty and Distribution Reform Act of 2004, Congress - at the behest of webcasters - created the Copyright Royalty Board which consists of three judges. By law, the judges are a venue of last resort and are required to periodically set rates for various statutory copyright licenses in the event that webcasters and copyright owners are unable to reach voluntary agreements. In the absence of an agreement, the judges set a rate designed to approximate the fair-market value that webcasters should pay to artists and performers for streaming their music for the years 2006-2010. The new rate that was established is less than a 5 percent increase of the rate in effect from 1998-2005.
Although a few webcasters have recently claimed that the process was unfair, it was not arbitrary and allowed representatives from all sides to make their cases. The judges began the proceedings in 2005, and heard testimony from dozens of witnesses and conducted a comprehensive review of tens of thousands of pages of evidence submitted by all interested parties over an 18-month period.
While some webcasters may choose to pay this rate, independent negotiations between the parties are still possible and this new statutory rate would serve as the ceiling. Additionally, if it appears that the new rate will reduce the overall amount of webcasting - as well as the overall income from this stream of revenue - the copyright owners may still have an incentive to offer webcasters a rate less than the statutory rate.
I am a strong believer in intellectual property rights and believe that artists and performers have earned the right to be fairly compensated for the broadcast of their works by webcasters who benefit - financially and otherwise - from their talents. Without fair compensation, these artists would not create their works.
Once again, thank you for writing. Should legislation addressing this new rate or the rate-setting process come before the Senate, I will be sure to keep your concerns in mind. In the meantime, if you should have any additional questions or comments, please do not hesitate to contact my Washington, DC staff at (202) 224-3841.
Sincerely yours,
Dianne Feinstein
United States Senator
