Appeals Court Denies Webcasters' Request to Stay Royalty Rates

Authored by Mark Hefflinger on July 12, 2007 - 12:57pm.

Washington - The U.S. Court of Appeals for the District of Columbia on Wednesday denied webcasters' motions to delay the implementation of new royalty rates for streaming music while their appeal of the rates is heard.

The new rates -- which many webcasters have said are so high they will be forced out of business -- are now due to take effect on Sunday.

Webcasters were "disappointed by the Court's decision, and are now forced to make very difficult decisions about what music, if any, they are able to offer," said Jonathan Potter, executive director of the Digital Media Association, which represents large webcasters.

"The result will certainly be fewer outlets for independent music, less diversity on the Internet airwaves, and far fewer listening choices for consumers."

Some negotiations between SoundExchange, the entity set up to collect and distribute digital music royalties, and webcasters are ongoing.

For instance, SoundExchange has offered to extend "below-market" rates to smaller webcasters, and cap a new $500-per-channel fee at $2,500 per webcaster, through 2008, according to the Digital Media Association.

Additionally, Billboard reports that a private roundtable discussion organized by Rep. Ed Markey (D-Mass.) is taking place today with webcasting and record industry representatives.

A bipartisan bill that would vacate the Copyright Royalty Board's new rates -- the Internet Radio Equality Act -- is also making its way through Congress.