From a press release: "Just 4 weeks prior to the first payment of a sound performance royalty fee by nonsubscription Internet Radio stations, a united group of webcasters will visit Congress this week (Sept. 19-20) to ask for immediate Congressional help for relief from this excessive royalty fee.

"Webcasters will be asking their representatives to support the Internet Radio Fairness Act (IRFA), which was introduced by Rep. Rick Boucher (D-VA) [right], Rep. Jay Inslee (D-WA), and George Nethercutt (R-WA), in an effort to protect smaller webcasters from unfair royalty obligations arrived at through a process which excluded their participation.

"The rates established for Internet use of sound recordings has been consistently decried by webcasters as being far too high in comparison to royalties that have traditionally been paid to songwriters. In many cases, the new royalties will be as much as 3 times more than the total revenues earned by certain independent commercial webcasters.

"'Without immediate relief -- before the October 20 payment deadline -- most of the U.S. small webcasters will have to either close down their businesses or severely curtail their operations,' said Mike Roe [pictured left], President of IO Media Partners, owner of Internet radio station radioio.

"'If most US small webcasters have to close or cut back on their operations, it opens the way for a very few large corporations that can afford to subsidize their Internet operations and for foreign webcasters to own the Internet Radio market. We don't think this is what Congress intended when they passed the Digital Millennium Copyright Act in 1998.'"




From the Wall Street Journal: "In the middle of the dot-com craze a few years ago, industry gurus liked to say that one day even our toasters would be connected to the Internet. It seemed ridiculous. Does my sourdough need the Web?

"Today, technology companies are making a new claim: Wireless home networks will link smart information appliances to the Internet. Now, that's an intriguing idea...But a lot of other gadgets besides the PC could benefit from a wireless link, such as Internet-savvy stereos...

"I decided to immerse myself in the wireless future by testing a new device, the WET11 Wireless Ethernet Bridge from Linksys of Irvine, Calif., along with a gadget that could use the WET11 to connect to the Internet...

"The appliance I connected to my home network with the WET11 was AudioTron, a $300 device that its manufacturer, Voyetra Turtle Beach of Yonkers, N.Y., calls a 'smart stereo' component. AudioTron, a slim black box slightly thinner than a DVD player, tunes into Internet radio stations and grabs songs stored on a local PC, playing them back on a conventional stereo system where the sound is usually better than on computer speakers...

"Once AudioTron was connected to the home network, I glimpsed the future of music in the home. There I was on my living-room couch in San Francisco, using an AudioTron remote control to switch between Vermont Public Radio, fantastic country tunes from KPIG.com and dozens of other Internet broadcasters (the station names were visible on a tiny screen on the front of the device)."

Read this entire column from the Wall Street Journal here (subscription required).

...

... Internet-delivered radio continues to gain listership from consumers despite its business-related problems (e.g., performance royalties, agency talent fees, reporting and recordkeeping requirements, and slow national ad sales). Those problems don't bother listeners! So the audience keeps growing. However, Internet-delivered radio is really going to flourish once it can expand its reach beyond the PC. It's available right now to anyone in 1,000 Starbucks locations who has a WiFi card in their laptop. It'll be coming to cell phones and web-enabled PDAs by late this year or early next. And when Internet radio can ride along on a home WiFi network into consumers' stereo systems, that may take it to a whole new level. -- KH ...

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BY PAUL MALONEY
Cable and satellite digital music provider Music Choice has filed a petition with the U.S. Copyright Office to amend government rules and allow parties who don't participate in rate-setting processes to file comments if the rates affect those parties. That's according to a press release from the company this week.

"Rate setting by the Library of Congress is an extremely complicated and expensive process that limits the ability of smaller entities to participate," the company stated. "The result is a closed process in which only the largest stakeholders are fully able to participate in setting rates that apply to all copyright owners and users.

The Librarian of Congress's determination on webcasting royalty rates (which was based on a recommendation from an arbitration panel) has been the subject of steady stream of criticism for a variety of reasons by the Internet radio industry. But chief among these is that smaller webcasters, unable to afford the steep participation fees associated with the arbitration hearings, were effectively shut out of the rate-setting process, even though all webcasters are subject to the results.

In June, Broadcast.com founder Mark Cuban revealed to this newsletter that his company negotiated terms of a webcasting royalty deal with the record industry with the intent of establishing rates that would minimize competition from smaller webcasters (see RAIN coverage here and here). Arbitrators based their recommendation to the Librarian solely upon this deal forged by the RIAA and Yahoo! (which had acquired Cuban's firm).

Music Choice, in a similar situation, says it is subject to license fees for commercial background music services which were determined by a process in which, according to the company, "the parties limited the evidence to a single class and category of user with an offering unlike that of Music Choice." Register of Copyrights Marybeth Peters (pictured) refused to consider Music Choice's objection on the grounds that the company was not a participant to the proceedings.




From the US Federal Register: "The Copyright Office is seeking proposals from copyright owners and users of the section 112 and section 114 webcasting statutory licenses on the electronic format in which recordkeeping data must be maintained by the services using the statutory licenses and the method(s) for delivery of the data to SoundExchange, the officially designated receiving agent for section 112 and 114 royalty fees. Written proposals must be received in the Copyright Office by Sept. 30, 2002...

"The Copyright Office also announces that a status conference to discuss the formatting requirements will be held Oct. 8, 2002, at 10:00 a.m. in the CARP Hearing Room, LM-414, of the Madison Building of the Library of Congress. Both the written proposals and the conference discussion will be limited to the electronic data format and delivery for the webcasting recordkeeping requirements, and not to substantive reporting requirements."

Read the Copyright Office notice (in Adobe Acrobat format) here.

From New Scientist: "A US record company has issued reviewers with portable CD players that are glued shut to prevent two new albums from being pirated online before their official releases.

"Epic Records Group has taken the drastic step of sealing CD players shut and gluing headphones onto them to stop digital copies being made from promotional albums. The albums involved are 'Riot Act' by Pearl Jam and 'Scarlet's Walk' by Tori Amos...

"Jim Peters, of the UK lobby group Campaign for Digital Rights (CDR), says this latest measure reflects the difficulty of trying to control listeners' use of digital music.

"'It's a sign of desperation,' Peters told New Scientist. 'I think its time for them to start rethinking their business model because it's getting ridiculous.'"

Read this entire story in New Scientist here.