Will Congress save internet radio?

U.S. CongressWe’ve talked at length on Bluegrass Today about the new CRB ruling that will increase the royalty rates for internet radio later this month. Now it seems that Congress has decided to get involved.

Late last month a bill was introduced into the House or Representatives by Jay Inslee (D-WA) and Donald Manzullo (R-IL). The bill is called The Internet Radio Equality Act (H.R. 2060), and would effectively reverse the CRB ruling.

According to the DiMA website, here is exactly what the bill would do:

The Internet Radio Equality Act would:

  1. Annul the CRB decision and set royalty rates at 7.5% of revenues – the same rate that satellite radio pays – for 2006-2010
  2. Change the rate-setting standard currently used by the CRB to determine Internet radio royalties, and substitute the standard that applies to most other statutory licenses, including satellite radio, jukeboxes and sound recordings

H.R. 2060 has gained the support of 63 cosponsors at this point, which is good support. The question is, will Congress be able to act quickly enough to save internet radio from the July 15th deadline? (The CRB ruling was published in the Federal register on May 1, 2007 and takes effect 45 days after the end of the publication month.)

The executive director of DiMA, Jonathan Potter, is hopeful that they will.

The Internet Radio Equality Act sets a new standard for setting royalty rates that will level the playing field for Internet radio, avoid unfair bankruptcies that eliminate royalties currently being paid to recording artists and record companies, and removes the unfair advantage enjoyed by our competitors in the satellite radio community…

We are hopeful that Congress will move forward quickly to enact this groundbreaking legislation – and offer a lifeline to the industry.

Today the Senate introduces it’s counterpart to H.R. 2060. The bill is currently in committee in the House. It would have to be passed to the floor for debate, voted on, reconciled with the Senate bill, and then passed on to the President for signing before becoming law. You can keep an eye on it’s progress here and voice your opinion by contacting your Congressman here.

  • Jon Weisberger

    The Internet Radio Equality Act would:

    1. Annul the CRB decision and set royalty rates at 7.5% of revenues – the same rate that satellite radio pays – for 2006-2010.

    One interesting thing that came out in the WAMU discussion of this issue that y’all thoughtfully pointed to is that the CRB is about to start work on setting new rates for satellite radio for roughly the same period, 2006-2010. Which means this piece of legislation would be more accurately named the Internet Radio INEQUALITY Act, since the likely end result of passage would be an ongoing special discount (from the new satellite radio royalty rate) to webcasters imposed on musicians by the Congress.

  • If you want a true view of Sound Exchange and the RIAA’s effort to kill internet radio, read this story.

  • Sorry, the link do not work. Here is is..!!


  • Jon Weisberger

    Kind of ironic that a piece devoted to arguing that SoundExchange’s claims can’t be trusted unless they “show us the work” would be pointed to in support of a claim that paying $0.0011 per play per listener in royalties will “kill internet radio.” Where might we view the “work” that supports this oft-repeated claim?

    I’d highly recommend that those interested in the subject check at the archived WAMU show on webcasting and royalty rates pointed to elsewhere on Bluegrass Today.

  • Fred Wilhelm, a Nashville entertainment attorney, has it right. Read his story here.


  • Jon Weisberger

    Fred Wilhelm, a Nashville entertainment attorney, has it right.

    Not really. For instance, he ends his piece by saying that with respect to SoundExchange’s announced intention to work with webcasters:

    All that business about “reaching out” to webcasters only happened after Congress got involved.

    Whereas in fact Bluegrass Today published a report which included a quote from SoundExchange that it intended to work with webcasters 10 days before the so-called Internet Radio Equality Act was introduced.

    More substantively, Wilhelm’s has it wrong when he writes:

    The result is a disaster for Internet radio, its listeners, and many of the artists you hear on webcasts.

    Everybody seems to realize this except SoundExchange and the RIAA.

    First, he invalidates his own statement just a few paragraphs later, when he notes that the American Association of Independent Music (A2IM), which represents independent labels (including many artist-owned ones) doesn’t support DiMA’s legislation.

    Second, he either ignores or deliberately refuses to acknowledge that organizations I’ve previously mentioned that represent artists – like the American Federation of Musicians – also oppose the legislative overturn of the CRB’s decision on royalty rates. Again, information on that’s available to readers of Bluegrass Today (see Musician’s union responds to webcasters’ backlash), so it’s hard to believe that a responsible attorney involved in the business under discussion could have missed it. Regardless, he clearly doesn’t have it right on this issue, either.