Web broadcasters lost an important last-ditch effort to avoid a fee hike that they say will cripple the nascent industry. On Thursday the federal DC Circuit Court of Appeals, based in Washington, refused to halt a royalty increase set to take effect Sunday.
The courts were reacting to an association of Web broadcasters that had pleaded with it to put into place an emergency stay of the new royalty plan. Starting next week broadcasters will have to pay 5 percent more in music royalties. They also face royalty hikes of more than 20 percent a year for the next three years.
"This situation is grave," reads a message from SaveNetRadio.org, a group of Internet broadcasters. "We are outmatched by lobbying power and money," the message continues. It adds, "But we are not outmatched by facts and passion and the power of our voices."
SoundExchange, the music-industry organization that collects the Internet royalties, issued a statement (PDF): "Yesterday's ruling means that recording artists and content owners can move forward confident that they will receive fair pay for their hard work in producing music for all to enjoy."
"This is a major victory for recording artists and record labels whose hard work and creativity provides the music around which the Internet radio business is built," said John Simson, Executive Director of SoundExchange.
Fight Continues
Despite yesterday's courtroom defeat, Web broadcasters turn now to Congress and where it is pushing a bill titled the Internet Radio Equality Act which would also halt the fee hike. SaveNetRadio.org is urging the public to call legislators and ask them to support the bill.
Reportedly the House Commerce Committee's telecommunications and Internet subcommittee convened late Thursday for a roundtable of industry leaders to discuss the debate over Web royalties.
Maybe another tactic SaveNetRadio.org could take is to lobby for rates to be increased for terrestrial radio broadcasters. Pushing back on the royalty rate has never worked since the original CARP structure from 2002.