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Webcasters Petition Congress to "stay" Librarians

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PostPosted: Mon Jul 08, 2002 9:20 pm   Post subject: Webcasters Petition Congress to "stay" Librarians Reply with quote

After falling short in previous efforts to save their businesses from extinction by onerous copyright fees, a group of small independent webcasters is directly petitioning Congress for aid.

The organization, known as "Voice of Webcasters," has been at the forefront of efforts to convince the U.S. Copyright Office, the Librarian of Congress -- and now Congress itself -- that the royalty structure as determined by arbitrators (and later modified by the Librarian) will crush their industry. Several members of this group took part in the "Hill walk" and the Copyright Office public roundtable in Washington DC in May.

Here's the letter in its entirety (Following the petition are instructions for other webcasters to sign on.):

"We respectfully submit this petition on behalf of the undersigned group of small, independent webcasters, asking for your help in averting the impending collapse of much of the Internet webcasting business.

"Each of the undersigned companies operates an Internet radio station with a significant listening audience. These companies provide outlets for public expression and add diversity to the media landscape, but the continued existence of each of these companies is threatened by a recent decision of the Library of Congress setting rates for the royalties to be paid to copyright holders for the use of music on the Internet. The undersigned companies are fairly representative of the vast majority of Internet radio stations, yet no one has been standing up for their interests that are imperiled by the recent rate setting decision. Thus, this coalition of small webcasters was born.

"The Library of Congress determination that established this royalty rate used a 'willing buyer and willing seller' standard based on ONE agreement between a very large webcaster and the recording industry. Using one agreement involving a company not representative of the majority of webcasters to set a standard for an entire industry is, in and of itself, an arbitrary decision and bad public policy. Even worse, recent reports quote a former executive of that company as stating that the rate was purposely set at an artificially high value to force small webcasters, like those signed below, out of business. That is exactly the effect that this decision is already producing.

"Although this decision is not effective until September 2002, 100's of Internet radio webcasters are already in the process of closing down their streams or have stopped streaming altogether. If this decision is not changed, the process will continue; small independent companies will be driven from the webcasting business and the few large companies that can afford the high rates will dominate the webcasting industry. In this period of rapid media consolidation, it would be terrible to effectively exclude small businesses from the one arena that offers so much promise for the flowering of diversity and free expression.

"What made the process even more unfair is that small companies like ours were effectively excluded from participating in the process that determined these rates, due to the extremely high financial commitment required.

"The rules governing the arbitration process that arrived at these rates required that participants pay a share of the arbitrators' fees, which exceeded $1,000,000. Small webcasters simply could not afford those fees, much less the cost of the attorneys necessary to try a case that went on for almost six months. Thus, the process to set a rate governing a vast, growing industry was arrived at by representatives of only a few very large companies -- companies having different interests than those of the small independent webcasters.

"Having private interests set public policy in a forum that excludes the majority of those affected is not in the public interest. The process needs to be based on standards that require arbitrators to set a 'fair' royalty rate that considers public interest and balances copyright owners and user interests. This process was not, and threatens the existence of hundreds of webcasters.

"The decision that brought about these closings has to be fixed or the trickle of webcasters turning off their signals will become a torrent of bankruptcies, lost jobs, reduced demand for broadband, and most importantly, less opportunity for smaller artists and fewer choices for music listeners on the Internet.

"Congress must take a position on this, and do it quickly, or they will be partially responsible for the worst loss of Internet related businesses since the "dot-com" bubble burst two years ago.

"This coalition asks that Congress act as soon as possible to accomplish the following things:

(1.) Immediately stay this Library of Congress decision. This decision was based on ONE 'willing buyer, willing seller' agreement between the RIAA and Yahoo!; an agreement reportedly designed specifically to monopolize the Internet Radio industry by creating an inflated copyright market value that would force small webcasters out of the business of self-streaming. Even David Mandelbrot, Yahoo's vice president of media and entertainment, testified before the Senate Judiciary Committee in May that the agreement had been misapplied 'to set excessive rates for an entire industry.' If this rate goes into effect as scheduled in September, hundreds of small webcasters will be driven out of business. Thus, Congress must stay the effect of this decision immediately.

(2.) Restructure the CARP process to ensure that future Copyright decisions accurately reflect 'fair market value' for copyrights.

A. Small businesses must be allowed to participate in any future CARP negotiations without the exorbitant cost of paying the arbitrators' fees. Copyright decisions affect far more than just big corporations and the process must ensure that small independent businesses can participate to protect their interests.
B. The rate-setting standard must be changed from the current 'willing buyer/willing seller' basis, which set such a horrendous precedent with the recent CARP, back to the previous 'Fairness' standard that requires arbitrators to set a 'fair' royalty rate that considers public interest and balances copyright owners and user interests.
C. The process must be changed so that one organization cannot have enough veto power to stop anyone else from participating.
D. The Register of Copyrights must adhere to the Regulatory Flexibility Act so that the burdens on small business are considered when the Register acts in its regulatory capacity when setting recordkeeping rules and in future rate-setting cases.
E. In that the next CARP convenes in less than 2 months, Congress must act immediately to restructure the CARP process to ensure that none of the problems incurred in the recent CARP will take place in the next negotiation.

"As webcasting is an entirely new industry, we understand the problems inherent in establishing a 'fair market value' for sound recording royalty rates. However, because of the above problems with the recent CARP procedure, we ask Congress to intervene to stop the implementation of the Library's decision immediately. Only with Congressional help will small webcasters get a legitimate and fair chance to survive and compete with large commercial webcasters.

"The undersigned webcasters would appreciate any opportunity to discuss these concerns with you or your staff.

3WK L.L.C.
St. Louis, Missouri
Hartford, Connecticut

All Bass Radio
Lafayette, California

Boomer Radio
Boalsburg, Pennsylvania

The Aloha Radio Network
Lakewood, California

bumpNgrind Records & Radio
Tiller, Oregon

CMRadio Networks
Nazareth, Pennsylvania

Internet Radio Inc.
Dallas, Texas
Chicago, Illinois

Waunakee, Wisconsin

DH NetRadio
Greenville, SC

Santa Cruz County, California

Flaresound Internet Radio
San Francisco, California

The Megarock Network
St. Louis, Missouri

Rowlett, Texas

Pacific Internet Broadcast Svs. (Hawaiian
Kihei, Hawai`i

Stone Mountain, Georgia
Albany, New York

Mountainview, California

Jacksonville, Florida

Inetprogramming Incorporated
Renton, Washington

Butte County, California
Kailua, Hawai`i, Inc.
Sudbury, MA

Spacial*Audio Solutions
Lubbock, Texas

WebMedia Consulting, Inc. (Digitally Imported Radio)
Staten Island, New York

Orange, Virginia
Ellwood City, Pennsylvania

Ultimate 80s
Los Angeles, California

Wolf FM
Nashville, Tennessee"
Ashland, VA

The Voice of Webcasters organization invites other webcasters to sign the petition. Interested webcasters should send an e-mail to and provide the following information:

Company name
Full name and Title
Web site URL
E-mail address
City and State
"Injustice, poverty, slavery, ignorance - these may be cured by reform or revolution. But men do not live only by fighting evils. They live by positive goals, individual and collective, a vast variety of them, seldom predictable, at times incompatibl

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PostPosted: Tue Jul 09, 2002 8:30 am   Post subject: Webcasters Petition Congress to "stay" Librarians Reply with quote


Very well written---this whole process just makes me downright angry. I am glad that you are in the forefront trying to prevent the closure of not just streaming soundtracks, but of all streaming audio. I can't stand the more traditional radio stations any more that play the same songs OVER and OVER and OVER and OVER again without providing a more diverse listening base of music (reminds me of that old "Weird Al" song "This song's only six words long").

This site, however, has been an eclectic refreshment for me ever since the summer of 2001 when I first started listening. I want you to know that you have my full support, and if I can be of service to you in any way, I will gladly provide it, even if it means testifying before a Senate sub-committee.

And you can quote me on that.

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