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H.R. 5285 - Internet Radio Fairness Act

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PostPosted: Sat Sep 28, 2002 5:31 pm   Post subject: H.R. 5285 - Internet Radio Fairness Act Reply with quote

The following is a reprint of a letter that I have sent to the following members of our government:

President George W. Bush
Vice Prsident Richard Cheney
Senator John Breaux (D-LA)
Senator Mary Landrieu (D-LA)
Representative David Vitter (R-LA)
Representative Chris John (D-LA)
Representative Richard Baker (R-LA)
Representative John Cooksey (R-LA)
Representative Jim McCrery (R-LA)
Representative W.J. Tauzin (R-LA)
Representative William Jefferson (D-LA)


Re: Support H.R. 5285


I implore you to act immediately to save webcasters from the monopolistic claws of the recording industry. The very survival of an entire broadcast medium and its awesome economic potential are at stake.


Ultimately, it is the DMCA that must be AMENDED (exactly why this must happen is explained in detail below), but the IRFA is an ABSOLUTELY ESSENTIAL step on the way to this reality.

Here is a list of MAJOR POINTS as they relate the webcast fee issue:

These companies have just released a joint study which shows that "streamies" (people who utilize streaming media online) purchase 1&1/2 times the amount of CDs that non-streamies purchase.

The two are completely different. File trading services utilize individual, near CD quality MP3 files that are downloaded and shared. Streamed audio must be encoded (compressed, to reduce the amount of data that must be transferred) before it is distributed for web listeners. It cannot be downloaded. While it is possible to copy streamed audio, the process would be quite difficult for the average listener, and the resulting sound quality would be somewhat less than that of a cassette tape of an FM radio broadcast. This is far from the "perfect digital" standard, and is certainly no threat to record company profits.

The CARP process was supposed to determine a rate that would have been negotiated in the marketplace between a willing buyer and a willing seller. This is a major flaw, because WE ALREADY HAVE AN AGREEMENT between a willing buyer and willing seller! In fact, there are thousands of them. The example below illustrates this point:

Eric Thornton, founder of, who to date has written checks totaling more than $7000 for the purchase of our music library, and will continue to write checks every month as our music library grows. There are thousands of others out there that could tell the same story.

The record industry, who certainly would not allow record stores and companies like TM Century (a Dallas, Texas based company that distributes music to radio stations) to distribute its product if they were not earning a very healthy profit in the process.

The entire webcasting industry, which, at no charge to record companies, promotes an infinite variety of record industry product to millions of people on a regular basis. These people are active listeners. They seek out streaming audio, and they buy CDs in far
greater numbers than those who do not utilize streaming audio. Again, this is FREE PROMOTION for the recording industry. Any other business that does so will tell you that they pay good money to advertise their product on the Internet. Not only does the recording industry get the vast majority of Internet radio air time, THEY GET IT FOR FREE. And now they want more? Ladies and gentlemen of Capitol Hill, THIS IS UNACCEPTABLE.

While webcasters and others debate what a "fair and reasonable royalty rate" should be, we're forgetting that the RIAA was always expecting NOTHING anyway! Their efforts have NEVER been aimed at compensation for artists. Ample evidence of this can be found on the Recording Artists Coalition web site:

The RIAA is fully aware of the fact that the DMCA in its current form will completely eliminate independent webcasting. No matter what they say, this is PRECISELY their goal. There can be no other explanation for a performance royalty fee structure that is so egregiously out of line with the current ASCAP and BMI standards. Instead of a percentage of revenue formula (which would at least allow small independents to survive while they build their businesses), the DMCA's performance royalty fee structure is a per song/per listener rate that webcasters must pay, regardless of their revenue.

Webcasting is a fledgling industry with amazing potential. But the fact remains that our country's current economic state, combined with the uncertainty of the very issue I am writing to you about, is keeping many advertisers (not to mention investors) away from our medium. With little revenue coming in, virtually all independent webcasters will be forced to shut down completely by the new royalty fees.

If they succeed in eliminating webcasters, the RIAA sees themselves as reaping ALL the benefits of a fledgling industry with amazing potential. The irony, of course, is that the industry will NEVER reach its true potential if the RIAA has complete control. This is because they, essentially, will be the only webcasting company! Thousands of independent webcasters will be forced to shut down, which not only means no new fees paid, but also an abrupt end to all the ASCAP and BMI revenue currently derived from these webcasters. Then, of course, all the FREE record industry product promotion that independent webcasters provide will also come to a screeching halt.

The RIAA continues to claim that they see no evidence that webcasting promotes CD sales. If this is true, one would be at a loss to then explain why Listen.Com and Pressplay (both recording industry projects) have recently announced multiple channels of "professionally programmed radio". Combine this with the newly released Edison Media/Arbitron study (mentioned above), and the RIAA's motivation could not be more obvious.

If compensation for artists and record companies was their true motivation, the RIAA would have sought performance royalty fees from terrestrial radio years ago. After all, terrestrial radio utilizes the same basic business model as does webcasting. The fact that performance royalty fees do not exist (and never have) for terrestrial radio (BECAUSE CONGRESS SAID DECADES AGO THAT THE PROMOTIONAL VALUE OF AIRPLAY WAS SUFFICIENT COMPENSATION) eliminates any and all credibility of the RIAA argument that they should exist for webcasters.




James E. Jennison
Technical Support Administrator

Please feel free to use this letter as a template to send your representatives. You can get the mailing address, email address, and telephone number of your representatives at

Viva La Internet Radio!
"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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