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(FROM ABOVE)

"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.

From Newsweek in MSNBC: "Jim Atkinson is cannon fodder in the digital-music wars. Five years ago he and his wife, Wanda, began 3WK, a virtual radio station that streams tunes of their beloved alt/indie rock to listeners over the Internet. Unlike broadcast radio, which requires astronomical investments in licenses and broadcast equipment, a Webcaster needs only software and a server...

"In the Webcast world...it’s possible for Jim and Wanda Atkinson to run one of the more popular sites — and one day, they hope, a profitable ad-supported business...that is, until Oct. 20. That’s the day the bill comes due for a government-imposed performance fee brought about by pressure from the recording industry...

"Kurt Hanson, publisher of Radio And Internet Newsletter, has calculated that the Oct. 20 bill due for all Webcasters represents several times the total revenue of the entire industry. The folks at the Recording Industry Association of America defend this on the ground that without music, you have no Internet radio.

"This is like the government’s deciding to tax you three times your gross income, because you really, really benefited by living in the U.S.A. Meanwhile, for broadcast radio there’s no performance fee at all...

"The apparent irony is that Webcasting seems like something that the record labels would want to nurture, not smother in the cradle. There’s no Napster problem: Web radio uses streaming technology — real-time transmissions that can’t easily be downloaded and stored. Just like real radio, it’s free exposure for artists, especially ones that have difficulty getting air time in the cookie-cutter world of FM radio. And Webcast listeners find it easy to buy what they like: musical cuts are clearly identified, and often there are direct links to allow an instant CD purchase. (Atkinson claims that he’s generated more than $20,000 in CD sales.)..

"So why are the record labels taking such a hard line? My guess is that it’s all about protecting their Internet-challenged business model.

"Their profit comes from blockbuster artists. If the industry moved to a more varied ecology, independent labels and artists would thrive — to the detriment of the labels, which would have trouble rustling up the rubes to root for the next Britney.

"The smoking gun comes from testimony of an RIAA-backed economist who told the government fee panel that a dramatic shakeout in Webcasting is 'inevitable and desirable because it will bring about market consolidation.'"

This entire article will appear in the July 15 issue of Newsweek. Read it online here.