Webcasters head to Washington in royalty protest

LOS ANGELES, (Reuters) - Over two dozen Web radio companies plan to speak to members of Congress Thursday and Friday to protest proposed royalty rates

LOS ANGELES, (Reuters) - Over two dozen Web radiocompanies plan to speak to members of Congress Thursday and Fridayto protest proposed royalty rates they say could put many membersof the nascent industry out of business.

The lobbying by the Webcasters follows a "silent" protest stagedlast week by hundreds of Web radio station operators who opposerates that were recommended in February by a Copyright RoyaltyArbitration Panel working for the U.S. Copyright Office.

The Webcasters' plight is taking on greater urgency as a May 21deadline approaches for the Register of Copyrights to rule on theproposed royalty rates.

"These companies, small to large Webcasters, have come here toWashington on their own dollar - to let the members of Congressknow that the CARP's proposed rate will effectively shut many ofthem down," said Kurt Hanson, publisher of "RAIN: Radio AndInternet Newsletter" and one of the organizers of the "Day ofSilence" initiative.

Under the Digital Millennium Copyright Act, the Librarian ofCongress is required to set sound recordings performance royaltyrates for Web radio stations by May 21.

The arbitration panel recommended Webcasters pay recordingcompanies a rate of 14/100ths of a cent per listener per song.

While it appears small, Webcasters say it would add up to 200percent or more of sales, threatening their business.

The proposed fee would amount to about $9,000 a month for anymid-sized Webcaster or about double what the station's revenueswould be, industry representatives said.

Recently, 20 members of the House of Representatives sent aletter to the Librarian of Congress, saying the proposal was"contrary to the intent of the DMCA and Congress's general policynot to stifle innovation" on the Web.

The Recording Industry Association of America (RIAA), whichrepresents all the major labels like AOL Time Warner Inc.'s WarnerMusic and Vivendi Universal's Universal Music lobbied Congress forthe royalty payments, arguing that they were fairly valued.

Over 20 Webcasters plan to attend an all-day roundtablediscussion Friday at the United States Copyright Office, industryrepresentatives said.

"We are at the crux of a pivotal time in this industry," Hansonsaid. "If Internet radio is allowed to survive, it will obviouslybe a 'win' for consumers, but it will also be a 'win' for artistsand creators, keeping alive new venues for their work."