News

The National Association of Broadcasters (NAB) has initiated its planned appeal of a ruling by the Librarian of Congress that establishes a royalty rate for all Webcasters, including traditional radio stations that stream their programming on the Internet.

The NAB has long maintained that its exemption from royalties due to copyright holders for over-the-air broadcasts should extend to Internet audio as well. (Commercial broadcasters in the US pay royalties to songwriters and composers through organizations such as BMI and ASCAP, rather than directly to copyright holders.) A US district court in Pennsylvania last year rejected this contention.

The NAB is again pursuing this argument in the wake of a July 20 ruling by Librarian of Congress James Billington, who decreed that all commercial webcasters would be required to pay royalties of 0.07¢ per song per 1000 listeners. Billington determined that noncommercial webcasters would pay 0.02¢ per song per 1000 listeners.

The 0.07¢ rate was considerably lower than one proposed by the music industry-backed Copyright Arbitration Royalty Panel (CARP), but still higher than many webcasters said they could afford. On the day Billington issued his decree, KPIG, a 2850-watt radio station in Santa Cruz County, CA, became the first commercial radio station to officially cease webcasting. Station executives explained the move by saying they simply couldn't afford to pay the royalties, which would total about $3000 per month. The station provides webcasts as a service to those beyond the reach of its transmitter and doesn't make any money from them, it stated.

Based in the small town of Freedom, KPIG was the first broadcaster in the nation to begin streaming its content on the Internet, back in 1995. The station will continue to produce occasional webcasts of live recordings, station-sponsored concerts, and other music not subject to royalties.