Net Radio: Senators Introduce Bill to Block Royalties Hike

Net radio stations got a boost Thursday with the introduction of a new Senate bill that would block an aggressive increase in the copyright royalties webcasters pay to record labels.

The new Senate bill--called the Internet Radio Equality Act of 2007--is sponsored by Rep. Ron Wyden (D-Oregon) and Rep. Sam Brownback (R-Kansas). It's a companion bill to another piece of legislation of the same name introduced in the House last month by Reps. Jay Inslee (D-Wash.) and Donald Manzullo (R-Ill.).

The new higher rates were adopted in early March by the Copyright Royalty Board (CRB) at the federal copyright office. The appearance of a Senate bill increases the chances of Net radio getting a reprieve from the new rates before their July 15 effective date.

Still, the two bills are anything but a shoo-in. They face a tight time table and opposition from a powerful recording industry lobby.

Brownback's and Wyden's bill proposes a system where Net radio stations would pay no more than 7.5 percent of their revenues in royalties. Under the current plan adopted by the CRB, webcasters must pay a royalty every time they play a song, regardless of how much revenue, if any, results from doing so.

The Net radio stations, fronted by their new advocacy group SaveNetRadio, have been engaged in a grass roots campaign to rally support against the new rates. The webcasters had been on the Hill visiting potential bill sponsors on both the House and Senate sides for several weeks.

SaveNetRadio says the CRB's new rates will increase its member stations' royalty payments 300 percent to 1,200 percent. Many small stations could immediately be forced out of business when the rates take effect; that's because they apply retroactively back to the beginning of 2006, SaveNetRadio says.