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Ruling affirms Internet radio royalties

 
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USA Morglum
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PostPosted: Tue Oct 21, 2003 2:30 pm   Post subject: Ruling affirms Internet radio royalties Reply with quote


Ruling affirms Internet radio royalties
BILL BERGSTROM
Associated Press

PHILADELPHIA - Radio stations must pay royalties to recording companies and performers, as they do to composers and songwriters, when musical broadcasts are "streamed" over the Internet, a federal appeals court has affirmed.

A three-judge panel of the 3rd U.S. Circuit Court of Appeals upheld a rule adopted by the U.S. Copyright Office, under the Digital Performance Right in Sound Recordings Act of 1995.

"The exemptions the DPRA afforded to radio broadcasters were specifically intended to protect only traditional radio broadcasting, and did not contemplate protecting AM/FM webcasting," said the opinion, written by Senior Judge Richard D. Cudahy.

Cary Sherman, president of the Recording Industry Association of America, applauded the ruling "affirming our view of the law that artists and record companies should be fairly compensated for the use of their music on the Internet."

Attorneys for station owners and the National Association of Broadcasters, which had challenged the rule, didn't immediately return calls seeking comment on the ruling.

Traditional radio broadcasts haven't been subject to royalties to recording companies and performers because they have served to promote sales of recordings. But Congress passed the Digital Millennium Copyright Act in 1998, which did require such royalties from webcasters.

The RIAA subsequently asked the Copyright Office to clarify whether simultaneous streaming of AM/FM broadcasts on the Internet was exempted from royalties, and the Copyright Office issued a rule in December 2000 saying it wasn't.

The federal appeals court ruling, issued Friday, came in a lawsuit by some station owners and the NAB challenging the rule. U.S. District Judge Berle M. Schiller upheld the Copyright Office rule, and the stations owners and the NAB appealed.

Sherman noted that the RIAA has already negotiated royalty rates with the broadcasters. "And we look forward to continuing to work with them in the future," he said.

An arbitration panel proposed rates of $1.40 a song heard by 1,000 listeners, an amount halved by the Copyright Office in June. Under a settlement awaiting Congressional approval, smaller Webcasters could calculate payments based on their earnings, or expenditures. The Senate recessed Friday for the elections without approving the negotiated rate revisions.

ON THE NET

National Association of Broadcasters: http://www.nab.org
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PostPosted: Tue Oct 21, 2003 2:34 pm   Post subject: Radio Stations Must Pay Royalties for Webcasting Reply with quote


Radio Stations Must Pay Royalties for Webcasting

Shannon P. Duffy
The Legal Intelligencer
10-20-2003


In a huge win for the recording industry, a federal appeals court has refused to overturn a rule passed by the U.S. Copyright Office that says radio stations must pay royalties when their broadcasts are simultaneously transmitted digitally over the Internet in a practice known as "streaming."

The unanimous three-judge panel of the 3rd U.S. Circuit Court of Appeals found that the rule was correct because Congress intended for the royalty exemption to apply only to "traditional, over-the-air broadcasts."

The decision in Bonneville International Corp. v. Peters, handed down Friday, upholds an August 2001 decision by U.S. District Judge Berle M. Schiller. The district judge had concluded that the rule was entitled to deference, and even if it were not, it would still pass legal muster because it is consistent with recent congressional efforts to address technological advances that threaten record sales.

The 3rd Circuit concurred, finding that, in passing the rule, the Copyright Office correctly interpreted two statutes passed in recent years to respond to technological advances -- the Digital Performance Right in Sound Recordings Act of 1995, or DPRA, and the Digital Millennium Copyright Act, or DMCA, passed in 1998.

Visiting 7th Circuit Senior Judge Richard D. Cudahy traced recent evolutions in copyright law as it relates to music, noting that for many years, the law granted protection only for public performances, and provided no protection at all for owners of the copyrights to sound recordings.

In 1971, Cudahy said, Congress passed the Sound Recording Amendment, granting limited copyright in the reproduction of sound recordings in an effort to combat recording piracy.

"However, there was still no right to public performance of that sound recording," Cudahy noted.

Although radio stations routinely pay copyright royalties to songwriters and composers -- through associations like the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI) -- for the privilege of broadcasting recorded performances of popular music, they do not pay the recording industry royalties for that same privilege, Cudahy said.

The system worked well until about 10 years ago because "the recording industry and broadcasters existed in a sort of symbiotic relationship wherein the recording industry recognized that radio airplay was free advertising that lured consumers to retail stores where they would purchase recordings."

But the 1990s "brought significant technological change," Cudahy said, when advancements in digital-recording technology created the possibility that consumers would soon have access to services whereby they could pay for high-quality digital audio transmissions or even pay for specific songs to be played on demand.

The recording industry, Cudahy said, "was concerned that the traditional balance that had existed with the broadcasters would be disturbed and that new, alternative paths for consumers to purchase recorded music (in ways that cut out the recording industry's products) would erode sales of recorded music."

Congress responded by passing the DPRA, which added a digital audio transmission performance right to the list of protectable rights.

But, the DPRA also exempted noninteractive, nonsubscription broadcast transmission. That law, too, proved inadequate, Cudahy found, because technology continued to advance, and the Internet soon became a viable medium over which to transmit, in real time, sound recordings.

In 1998, Congress amended the DPRA by passing the DMCA, which specifically addressed Internet streaming.

In March 2000, the Recording Industry Association of America petitioned the Copyright Office for a rulemaking to clarify whether AM/FM webcasting -- the simultaneous Internet streaming by radio broadcasters of their AM/FM broadcast programming -- was a "nonsubscription broadcast transmission" that was exempt from the digital audio transmission performance right.

When the Copyright Office sided with the RIAA, the National Association of Broadcasters responded by filing suit in U.S. District Court to challenge the rule. Schiller upheld the rule, finding that "the Copyright Act evinces Congress' intent to empower the Copyright Office to interpret the statute."

Over the years, Schiller said, Congress has clearly shown that it "recognized the expertise of the Copyright Office in matters relating to copyright."

Turning to the specific question of whether the Copyright Office had the power to decide the issue, Schiller found that "Congress implicitly, if not explicitly, entrusted the Copyright Office with the task of determining which entities and means of transmission would be exempted."

Now the 3rd Circuit has ruled that Schiller got it right because the rule is consistent with, and effectuates the goals of, the most recent statutes.

"The exemptions the DPRA afforded to radio broadcasters were specifically intended to protect only traditional radio broadcasting, and did not contemplate protecting AM/FM webcasting," Cudahy wrote in an opinion joined by 3rd Circuit Judges Jane R. Roth and D. Brooks Smith.

"The DMCA's silence on AM/FM webcasting gives us no affirmative grounds to believe that Congress intended to expand the protections contemplated by the DPRA," Cudahy wrote.

The broadcasters, Cudahy said, "must show something more than congressional silence to argue convincingly that Congress intended to lump AM/FM webcasting with over-the-air broadcasting."
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PostPosted: Thu Oct 23, 2003 7:18 am   Post subject: Reply with quote


Shocked Bugger all. Theres goes our wishlist for Jeric. Time to get out the check book boys and girls. Sad
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PostPosted: Thu Oct 23, 2003 8:32 am   Post subject: Reply with quote


Hey JK, maybe if you had bothered to read even the first paragraph of either of those articles Morg posted you'd realize that neither of them directly apply to SST.

I'm all for getting rid of this section of the Forum. All these articles do is confuse the majority of our listeners who read them.

If our listeners really are curious, I'm sure they can type "RIAA webcasting" in google themselves.
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PostPosted: Thu Oct 23, 2003 8:35 am   Post subject: Reply with quote


I agree with Cocles, this forum makes me depressed (that better C? Very Happy)
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PostPosted: Thu Oct 23, 2003 8:38 am   Post subject: Reply with quote


Caliburn wrote:
I agree with Cocles, this forum makes me depressed (that better C? Very Happy)


Oh good! You've finally learned that "depressive" isn't a word. Wink
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PostPosted: Thu Oct 23, 2003 3:04 pm   Post subject: Reply with quote


There are not many times I would agree with Cocles on issues, however, this is one of those times where I am actually inclined to agree. (Surprise) I think that this forum has served it's purpose, and that it is now time to say good-bye. If the need arises for the forum to be opened again, than I am sure that Jeric could always start the forum back up again.
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PostPosted: Thu Oct 23, 2003 3:58 pm   Post subject: Reply with quote


Well I'm of mixed feelings on this, as sometimes the articles mentioned here, make me research further on an topic.

Since I have such an interest in this though, to the point of considering a law degree in the whole copyright area. But I'll go along with the majority.
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PostPosted: Sun Oct 26, 2003 9:21 am   Post subject: Reply with quote


Cocles wrote:
Hey JK, maybe if you had bothered to read even the first paragraph of either of those articles Morg posted you'd realize that neither of them directly apply to SST.


OK I know that at this time the only ones affected by this ruling are the AM/FM stations that simultaneously broadcast and stream to the internet. I also realize that at the moment this does not affect us here. Very Happy

However, this descision in favor of the RIAA places, coupled with the growth of RIAA sanctioned music download services such as Apple i-music, can place the small independent internet radio broadcasters in a dificult position. As we all know, a stiff royalty fee being paid to the RIAA could shut most if not all of the internet radio broadcasters down and with the other services allowing you to listen to the music on line, I doubt the internet radio community can rally the support needed to prevent being forced into a crushing royalty fee.

I know that I am pressing on a raw neve here as there are those here that are strongly in favor of artists rights, those (like myself) who are more moderate on the subject, as well as (sadly) those that are in favor of having all music free for the taking on the web. I do not want to enter into the arguments on the morality/legality of file sharing here. I am however being a doom and gloom guy here and seeing this decision in favor of the RIAA as not a good sign for us the internet radio community.

That being said... I like the new home for this thread. "Webcasting" is a lot more general and also allows for varied items to be posted. Good call Jeric on the upgrade to the forums.
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