Slashdot Mirror

detroitindustrial writes "The Washington Post reports that the Webcaster Alliance is threatening to sue the RIAA under the Sherman Antitrust Act. In their letter to the RIAA, the Webcaster Alliance alleges that the RIAA and the Voice of Webcasters negotiated in collusion and, 'were apparently intent on either eliminating their competitors and/or raising barriers to entry in the market for small commercial webcasting.' It goes on to say that the RIAA also wanted to eliminate smaller webcasters, who tend to play more independent material, in order to maintain their monopoly on music distribution."

An anonymous reader writes "MP3newswire.net has an interesting commentary, inspired it seems by the woes of the Webcasting community. Basically they are saying that the RIAA is less concerned about piracy and more about the low barrier of entry into the online music business. For example, most slashdotters right now can start their own radio streams or distribute music files for next to nothing, just download the appropriate freeware and go. Through lawsuits and the DMCA the entertainment conglomerates are trying to make such acts much more expensive. So expensive that it is no longer affordable for the "average Joe" to trade or broadcast. The article makes a good argument on how the Internet has empowered individuals and artists to affordably express themselves online, and how a threatened record industry wants to stop that." Update: 10/20 6:55pm EST by C : More news from the webcasting front can be found in the article...

Rusty reports: "Friday afternoon, the RIAA and SoundExchange announced a temporary payment plan and fee reprieve for small webcasters while congress considers legislation.. Basically, by Monday, Oct 21st, small webcasters will need to pay a $500 a year minimum fee ($2500 max). While this rate still may be a problem for hobbyist webcasters, it is lower than the $2500-$6500 minimum that HR5469 called out.

From the RIAA's SoundExchange site:

"Any webcaster that qualifies as an 'eligible small webcaster' under H.R. 5469 will not be required to pay on October 20 the per performance (.0762 cents) royalties otherwise due under the Librarian of Congress' decision of July 8, 2002.

Instead, by October 21st, these eligible small webcasters may instead pay only the $500 annual minimum fee set by the Librarian of Congress for each year or portion thereof they have been in operation since 1998 (a maximum of $2500) until this Congress has had the opportunity to act on the pending legislation."

This still provides no relief for Live365, although their appeal hasn't been heard yet."

Ann Gabriel writes the following in response to Rusty's report from our last article on webcasting:

It appears that the message being sent to me in the response by SOMA FM's Rusty is that since HR 5469 does not directly affect me, I should sit quietly by and watch this travesty play itself out without saying anything.

What happened with HR 5469 directly affects EVERYONE is the webcasting community and to pretend otherwise is a joke.

There is nothing wrong with the fact that a group of people set out to negotiate a private deal for themselves intending to save themselves from the retroactive royalties that will come due on October 20, 2002.

But there is something horribly wrong with the FACT that what began as a private negotiation ended up being turned into a piece of legislation forced as a yolk around the necks of people who had no say in the matter.

I am tired of being asked as a member of the webcasting industry to accept something so horribly wrong just because some people think this deal was "the best they could get."

To sit by and accept the events that led up to the negotiations and the formation of the actual bill language is something I cannot do.

To me it would be like being invited over to lunch and expecting to eat Chicken Salad - and then being served Chicken S**t. There might be a large portion of the webcasting community who can stomach that, but I can't.

The RIAA never had any intention of dealing fairly, honestly and respectfully with the webcasting industry. Those that sat down privately to negotiate a deal for themselves did so in their own best interest and for their own individual reasons. I don't believe there was anything wrong with that.

But when the self-serving agenda of a few becomes something that is foisted upon the community as a whole, then I cannot, must not and will not stand by and accept such an American Injustice.

It is patently clear to me that the IWA and the VOW are separate organizations. To that end if you read my open letter carefully you will see that I point out the deal was NOT negotiated on behalf of the IWA and it's members, of which I was one until last week.

Just because people are claiming right now that HR 5469 in its present form will not really hurt the industry does not mean that is the truth. The only entity that HR 5469 helps is the RIAA and it is a sad truth that they care nothing about the industry they are destroying.

Ann Gabriel
Gabriel Media Inc.

Brian Hurley of Detroit Industrial also had his response to Rusty's words from that article.

In case you haven't had a chance, here's the latest article from The Register on the state of HR5469 as it was introduced to the Senate, earlier this week. And as a bit of a wrap up to this roller coaster week, this Reuter's article serves to provide a nice summary of the situation so far.

An anonymous reader writes "MP3newswire.net has an interesting commentary, inspired it seems by the woes of the Webcasting community. Basically they are saying that the RIAA is less concerned about piracy and more about the low barrier of entry into the online music business. For example, most slashdotters right now can start their own radio streams or distribute music files for next to nothing, just download the appropriate freeware and go. Through lawsuits and the DMCA the entertainment conglomerates are trying to make such acts much more expensive. So expensive that it is no longer affordable for the "average Joe" to trade or broadcast. The article makes a good argument on how the Internet has empowered individuals and artists to affordably express themselves online, and how a threatened record industry wants to stop that." Update: 10/20 6:55pm EST by C : More news from the webcasting front can be found in the article...

Rusty reports: "Friday afternoon, the RIAA and SoundExchange announced a temporary payment plan and fee reprieve for small webcasters while congress considers legislation.. Basically, by Monday, Oct 21st, small webcasters will need to pay a $500 a year minimum fee ($2500 max). While this rate still may be a problem for hobbyist webcasters, it is lower than the $2500-$6500 minimum that HR5469 called out.

From the RIAA's SoundExchange site:

"Any webcaster that qualifies as an 'eligible small webcaster' under H.R. 5469 will not be required to pay on October 20 the per performance (.0762 cents) royalties otherwise due under the Librarian of Congress' decision of July 8, 2002.

Instead, by October 21st, these eligible small webcasters may instead pay only the $500 annual minimum fee set by the Librarian of Congress for each year or portion thereof they have been in operation since 1998 (a maximum of $2500) until this Congress has had the opportunity to act on the pending legislation."

This still provides no relief for Live365, although their appeal hasn't been heard yet."

Ann Gabriel writes the following in response to Rusty's report from our last article on webcasting:

It appears that the message being sent to me in the response by SOMA FM's Rusty is that since HR 5469 does not directly affect me, I should sit quietly by and watch this travesty play itself out without saying anything.

What happened with HR 5469 directly affects EVERYONE is the webcasting community and to pretend otherwise is a joke.

There is nothing wrong with the fact that a group of people set out to negotiate a private deal for themselves intending to save themselves from the retroactive royalties that will come due on October 20, 2002.

But there is something horribly wrong with the FACT that what began as a private negotiation ended up being turned into a piece of legislation forced as a yolk around the necks of people who had no say in the matter.

I am tired of being asked as a member of the webcasting industry to accept something so horribly wrong just because some people think this deal was "the best they could get."

To sit by and accept the events that led up to the negotiations and the formation of the actual bill language is something I cannot do.

To me it would be like being invited over to lunch and expecting to eat Chicken Salad - and then being served Chicken S**t. There might be a large portion of the webcasting community who can stomach that, but I can't.

The RIAA never had any intention of dealing fairly, honestly and respectfully with the webcasting industry. Those that sat down privately to negotiate a deal for themselves did so in their own best interest and for their own individual reasons. I don't believe there was anything wrong with that.

But when the self-serving agenda of a few becomes something that is foisted upon the community as a whole, then I cannot, must not and will not stand by and accept such an American Injustice.

It is patently clear to me that the IWA and the VOW are separate organizations. To that end if you read my open letter carefully you will see that I point out the deal was NOT negotiated on behalf of the IWA and it's members, of which I was one until last week.

Just because people are claiming right now that HR 5469 in its present form will not really hurt the industry does not mean that is the truth. The only entity that HR 5469 helps is the RIAA and it is a sad truth that they care nothing about the industry they are destroying.

Ann Gabriel
Gabriel Media Inc.

Brian Hurley of Detroit Industrial also had his response to Rusty's words from that article.

In case you haven't had a chance, here's the latest article from The Register on the state of HR5469 as it was introduced to the Senate, earlier this week. And as a bit of a wrap up to this roller coaster week, this Reuter's article serves to provide a nice summary of the situation so far.

detroitindustrial writes "The Register reports on a backroom deal that screws small webcasters. The Voice of Webcasters, working with the RIAA, negotiated a deal that Congress is trying to make into a law. These rates give big discounts to the largest webcasters, while leaving around 96% of the smaller webcasters to suffer and die under the CARP rate. This is being done through the bill H.R. 5469, the Small Webcaster Amendment Act of 2002. It was originally a one paragraph bill to delay the CARP rates for 6 months, and was widely supported in its original form by the webcasting community. After the RIAA rewrote it, it turned into 30-page monstrosity that had no relation to the original bill. It has already passed in the House. Ann Gabriel, who was on the International Webcasting Associaion legislative committee, recently resigned in disgust over this sell out." It appears that the Register article misrepresents a few of the issues. Rusty Hodge, of SomaFM, has more on the actual effects of HR 5469... This is an email from Rusty Hodge, SomaFM's head honcho, which was sent to the Pho emailing list. Reprinted with permission:

Date: Mon, 14 Oct 2002 01:26:57 -0700
From: Rusty Hodge

The RIAA seems to have managed to really get a rift going in the
webcasting community.

I'll tell you all I know.

"Somebody shine a light of truth into the nature of these proceedings. You have many friends on pho list. Speak up. This is another dirty deal."
-- [ quote from The Register article ]

This article is based on a lot of incorrect information. What appears
to have happened was that someone on the carp@voiceofwebcasters.org
mailing list forwarded a bunch of messages from that list to the
author. (Nevermind that the mailing list messages have a disclaimer
which say that they are confidential and not for publication without
prior consent). I am annoyed that I was quoted out of context in the
article.

Tthe headline is based on one message that someone who opposed HR5469
posted, a message which is not accurate. The 96% number came from a
person who opposed all webcasting royalties and based his
calculations on the Shoutcast.com directory. It did not take into
account the broadcasters who operate via Live365 (which includes
thousands of broadcasters), the Windows Media radio directory,
Real.com, etc. It also assumed that all stations listed in the
Shoutcast.com directory are actually accessible. Because of the way
that the shoutcast automated directory works, even if you setup a
shoutcast server to privately distribute audio in your house or
within an office, by default it will appear in the shoutcast.com
directory. So will stations that do not have the network bandwidth to
reliably stream to a single listener. Anyone can run the Shoutcast
software on a DSL line, yet can't sustain a single listener because
of bandwidth limitations. And the statistic does not take into
account that many of those Shoutcast broadcasters are not based in
the US nor does this take into account where the listeners are.
(Remember, the DMCA/CARP fees only apply to listeners in the US.)

Now the current CARP rates - if you broadcast 12 songs an hour, and 7
average concurrent listeners, you'll be paying $516.50 a year. If you
only look at stations with more than 7 concurrent listeners on
average, or 5040 hours for the 30 day sample period, you get about
320 stations, and those stations represent 98% of the shoutcast
audience (based on listener numbers)!!! The remaining 2700 "stations"
are fighting for about 400 listener.

Of that 3000+ shoutcast stations listed who will be "screwed", more
than half of them do not have any listeners. If you have sampled
some of those near the bottom of the rating stations, you'll find
that many of them are either broadcasting silence, or their stream is
technically unlistenable (more dropouts than audio or you can't
connect to the stream at all).

(http://shoutcast.com/ttsl.html - has a rolling 30 day statistic
snapshot, which these numbers are based off)

HR5469 grants a lot more relief to a larger body of webcasters than
you'd think from reading that one mailing list. To the rest, HR5469
DOESN'T CHANGE ANYTHING. If it passes or fails, nothing changes for
the smallest webcasters.

(By the way, Live365 is neither harmed or hindered by this bill.
Their statement is here:

http://www.live365.com/carp/hr5469statement.html

Live365 is also represented ONLY by DiMA. Additionally, Live365 covers
the royalties for their member broadcasters, their member broadcasters
are not directly affected by this.)

Any webcaster with an average of more than about 25 concurrent
listeners is better off under this deal than the previous CARP
ruling. Beneath that limit, there is no difference.



There is another quote that is very misleading in the article:

``And privately, even members who support HR.5469 agree that it will
"seal the fate of this industry to be dominated by big webcasters,"
according to correspondence seen by The Register. ``

Actually, the quote "seal the fate of this industry to be dominated
by big webcasters" came from Kevin Shively (also fellow pho) of
Beethoven.com, on 9 Oct 2002. Kevin has stated many times that he
does not support the version of 5469 that was passed.

The Register should have attributed this quote because it completely
changes the meaning of it. Beethoven.com, a 14-employee company, is
owned by Marlin Broadcasting, a company that owns several FCC
licensed over the air stations. Kevin does not support HR5469 because
he believes that it sets the definition of small webcaster at too low
of a level. But I'll leave it to him to tell you what he thinks about
the bill. Kevin has been a driving force in lobbying for fairness for
small webcasters, and ironically, HR5469 would probably not have
passed without him, and it is very saddening that he will not benefit
from it. Kevin will hopefully post his concerns with the bill (I
recall it is Section 4 that he has problems with).

For the record, SomaFM feels that 5469 is far from a perfect bill.
However, we think it is a good starting point. Kevin has expressed
concerns in this bill setting precedents that will harm many
mid-sized webcasters. I believe that NAB is not supporting the bill
for the same reason.

``But the compromised Bill has some surprising backers. SomaFM and
KPIG are urging listeners to support the revised, RIAA-negotiated
venture.``

I was quoted somewhat out of context talking about advertising. I was
talking about a variety of options available for small webcasters,
one of which was advertising. However HR5469 extends the definition
of non-commercial webcasters to any non-profit organization, not just
FCC licensed non-commercial broadcast stations. That rate is less
than a third of the rate that commercial webcasters pay under the
current CARP fees ($0.0002 vs $0.0007). This I believe is a big win
for non-commercial internet only webcasters.

I was also pointing out that $500 a year minimum, vs the small
webcasters demand for $250 a year minimum, was negligible. I was also
pointing out that as they grew, and hit the $2000 minimum under the
new plan, that they would have an audience of over 25 average
concurrent listeners and at that point should have not trouble
obtaining advertising. They could bill up to $20k a year and have an
unlimited audience size.

SomaFM is listener supported and commercial free. We are not a
501(c)3 non-profit. Under the CARP rates, we would have to pay $500 a
DAY - over $180,000 a year in royalties. We generate about $20,000 a
year in donations now, which has covered about 85% of our costs
EXCLUDING the CARP FEES, and was on its way to covering all our
costs. (The cost that isn't covered is the cost of all the CDs I have
to buy!) SomaFM operates bare bones, our studios are in my garage.
We believe that we can generate enough additional donations to keep
us on the air with the rate proposed in HR5469. For us, it's
$2000-5000 a year instead of more than 10 times that under the old
CARP rates. So it's a no brainer for us to support this.


Another inaccurate quote:

"Many webcasters have already resigned in protest from the body
that's supposed to represent them: the Internet Webcasters'
Association. "

One person, Ann Gabriel, resigned. And Ann Gabriel was not a
webcaster, she produces live web events. She is not liable for past
CARP fees. In her open letter (which I've included below) she seems
to imply that IWA and VOW are the same.

Voice of Webcasters and the International Webcasting Association are
two separate entities.

The International Webcasting Association or IWA (which SomaFM is a
member), is not a lobby group on behalf of small webcasters. However,
since the IWA dues are far less than the other webcasting-related
trade group, DiMA, it has many more small webcasters than does DiMA.
As I recall, DiMA dues are $20k a year, IWA dues $300 a year. DiMA
represents bigger companies like Microsoft, AOL, Yahoo and smaller
guys like Live365. Jon Potter can tell you more about DiMA's goals.


Here's Ann's letter. I'm only forwarding it because it says it's an
open letter to the streaming community and the press, which i believe
describes many here on pho:

>Date: Wed, 09 Oct 2002 20:24:40 -0400
>From: Annmgabriel@aol.com
>Subject: [carplist] HR 5469
>
>Open Letter to the IWA Board of Directors, The IWA Legislative
>Committee, David Oxenford at Shaw-Pittman, CARP-List Members,
>Members at large of the Streaming Media Community and the Press:
>
>On October 1, 2002, at 12:00 pm Pacific Time, I began a 10-hour per
>day live broadcast with the intent to draw attention to the plight
>of Internet Radio broadcasters and raise money to benefit the IWA
>Legal Defense Fund.
>
>I did this based on the belief I was working to support HR 5469 as
>it was originally introduced into Congress; a bill calling for a
>stay in the rates imposed by the Librarian of Congress and due on
>October 20, 2002; and because I believed that Shaw-Pittman, the law
>firm involved in negotiating the deal with the RIAA was working on
>behalf of the International Webcasting Association (IWA).
>
>I am appalled, outraged and disgusted by the turn of events I have
>witnessed over the last week and will no longer sit and watch the
>blood, sweat and tears of the many be drown out by the disingenuous
>hue and cry of the few.
>
>I will NOT support HR 5469 as it was introduced and passed on the
>floor of Congress on October 6, 2002, nor will I encourage anyone
>who asks me to support it. I will immediately turn my attention to
>contacting every Senator I can, both by telephone and by fax, to let
>them know about the grave injustice that has been carried out in the
>name of the small webcasting community.
>
>Regardless of the stand the IWA takes on this issue, I, today,
>resign my membership in the IWA. I cannot stand by and continue to
>support an organization that allows its members to be bullied into
>accepting legislation that was negotiated one, under duress and two,
>by a team which originally set out to negotiate a private deal for
>themselves with the RIAA.
>
>I call on the members-at-large of the webcasting community to ask
>themselves why the press release about the deal on HR 5469 was done
>in the name of the RIAA and the Voice of Webcasters. I contend that
>the IWA was not represented here and its members are not responsible
>for the legal bills incurred by Shaw-Pittman. It is my belief that
>this was not a deal negotiated on behalf of the IWA or all of its
>members.
>
>I have been asked by many in the webcasting community how this could
>have happened. I think it is time for me to respond, and to let the
>webcasting community know all the facts about how HR 5469 could
>change from one paragraph as it was originally introduced, to a
>30-plus page bill serving only the RIAA and a few on the negotiating
>team.
>
>I believe I have an obligation to tell the truth NOW, as I know it,
>to the many who have banded together to fight for a common cause.
>They have seen their hopes go up in smoke because of a backroom deal
>negotiated under duress by a team that did not set out to represent
>webcasters at large and does not accept that the RIAA has a complete
>lack of respect for the webcasting community and never intended to
>deal fairly, honestly or forthrightly with the issues facing
>webcasters today.
>
>I wish you all the best of luck moving forward in a very difficult time.
>
>Sincerely,
>Ann Gabriel

SomaFM was not involved with negotiating this deal, although we did
sign a letter in support of it.

If you think my support is wrong, I'd like to hear the reasons why.

--Rusty Hodge
SomaFM.com