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Broadcasters Appeal Royalty Ruling
tanveer1979 pointed out this story, but his summary of it wasn't much good. :) According to Reuters and Kurthanson.com, broadcasters (regular radio stations, not webcasters) are appealing a year-old ruling which would require them to make the same royalty payments for webcasting that webcast-only stations have to make. They're arguing that Congress intended the royalty payments to apply only to internet services which allow one to pick what music one receives - if the listener is force-fed a stream, like regular radio, Congress didn't intend for the royalty payments to apply.
No, what you are missing is that radio stations are saying that the NAB fees they are already paying should cover them regardless of the transition method (radio or Internet)...which makes sense.
So in a sense, the radio stations say they don't want to be charged twice for the same thing. The FCC license only gives them permission to be on the air, it doesn't have anything to do with what they can play on the air. If it wasn't for the NAB, radio stations would be pretty bleak (probably just all talk shows).
So webcasters are still screwed. Even if the radio stations succeed and get the precident set that stream-only radio-style webcasting doesn't get charged an additional fee...there is still the problem that webcasters can't join the NAB and pay a general royalty tax to gain a compulsary license.
A silver lining this is not...
- JoeShmoe
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-- I wonder which will go down in history as the bigger failure: the War on Drugs or the War on Filesharing
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Summary of Argument:
...
So the NAB does want a special deal for FCC-licensed radio broadcasters. Internet-only webcasters would not benefit from this deal. Nor will they benefit if the NAB wins this lawsuit. Read the filing.AM/FM streaming -- the Internet transmission by an FCC-licensed radio broadcaster of the program fare offered by such broadcaster pursuant to its FCC license -- constitutes a "nonsubscription broadcast transmission" within the meaning of Section 114(d)(1)(A) of the Copyright Act, and thereby is exempt from the limited performance right in sound recordings conferred by Section 106(6) of the Act.
While there is thus no need to resort to legislative history, that legislative history nevertheless confirms the plain language construction of the "nonsubscription broadcast transmission" exemption, and demonstrates that Congress did not intend to impose sound recording public performance copyright liability upon FCC-licensed terrestrial broadcasters that simultaneously stream their radio programming to listeners via the Internet.
Way back in 1995, the NAB and RIAA already began to realize that the Internet might be a threat to their established business. (Hey, they may be greedy, but they're not stupid!) So, they did what you might expect an established American business to do: they bought a law to protect themselves against competition, the DPRA (cool - another 4-letter acronym to hate!)
According the NAB's own words in the linked "summary" posting, p.4:
The impetus for the legislation was concerns of the recording industry that certain emerging businesses enabled by developing digital transmission technologies might provide music transmissions of such nature and quality as would displace record sales.
This little gem of a quote is part of the NAB's appeal document! The NAB/RIAA does not even attempt to hide the fact that the purpose of the DPRA was specifically to target select-and-download services and prop up "no-choice" broadcasting.
Unfortunately for them, the US Copyright Office refused to play along, and decided that all Internet streams would be charged similarly. So, they're understandably upset that the law they bought and paid for isn't protecting them as well as they'd like. (Some days, even a CongressCritter is a lousy investment...)
Unfortunately for the rest of us, the law was clearly intended to exempt them from royalties, so they'll probably get a "clarification" buried deep within the next huge steaming pile of legislation regarding the Office of Homeland Security or whatever.
As to those who have posted "hey, Congress won't do that -- it will make it way too obvious that they're supporting the fat cats in the RIAA!": what color is the sky in the world where you live (and how can I get there?)
this is a reply I received from Nancy Pelosi after writing her regarding the CARP proposal:
Thank you for contacting me with your concerns about the Digital
Millennium Copyright Act (DMCA) and the royalty fees for webcasters that
were recommended by the Copyright Arbitration Royalty Panel (CARP). I
appreciate hearing from you.
As you know, on February 20, 2002, CARP released its recommended royalty
fees for webcasters. The rate for Internet transmissions and for
retransmission of a performance in an AM/FM radio broadcast was
recommended to be set at $.14 per performance. On May 21, 2002, the
Librarian of Congress issued an order rejecting the CARP recommendation,
and on June 20, 2002 the Librarian of Congress set the rates at $.07 per
performance. Rates for noncommercial broadcasters as well as the fee
webcasters and broadcasters must pay for the making of ephemeral
recordings were decreased from the CARP recommendation.
When Congress passed DMCA, our intention was that artists and copyright
holders be fairly paid for commercial uses of their work, while webcasters
though the Internet would be able to provide competitive programming of
value to consumers. Congress intended the statutory license process to be
fair and efficient, so that the webcast industry could be free of legal
uncertainty, grow quickly and pay creators increasing amounts as the
industry developed.
As these rates go into effect for webcasters, please be assured that I
will be watching this issue carefully. Thank you again for taking the
time to express your views on this important subject. I hope you will
continue to communicate with me on matters of concern to you.
Sincerely,
Nancy Pelosi
Member of Congress