Webcasters to protest rates with sound of silence

Internet radio listeners will get a taste of what Web radio may sound like in the future Wednesday when hundreds of Web broadcasters go silent in protest of Webcaster royalty rates recently proposed by a U.S. government panel.

The May Day protest is in response to a February decision by the Copyright Arbitration Royalty Panel (CARP) that seeks to set retroactive rates at .07 of a U.S. cent for radio broadcasts and .14 of a U.S. cent for all other copyright audio broadcasts, spanning back to 1998.

"If these (royalty rates) go through, it will cut the legs off of the little guy," said Mary McCann, vice president of radio at iM Networks Inc., the maker of a popular Internet radio tuner.

The rates proposed by the CARP were much higher than the Web broadcasters were prepared to pay, yet lower than the rates suggested by the Recording Industry Association of America Inc. (RIAA), which is pitted against the Webcasters in the Net royalty melee. The royalty rates are being set under the terms of the 1998 Digital Millennium Copyright Act (DMCA), which was widely lobbied for by the music industry to protect their intellectual property online.

The CARP has until May 21 to accept, reject or modify the proposed rates. Web broadcasters hope that by drawing attention to the issue tomorrow, they can garner enough public support to tune the rates down.

While Web broadcasters such as AllDanzRadio, ChroniX Radio and CyberRadio2000 are scheduled to spin the sound of silence from dawn to late afternoon Wednesday, a handful of others have prepared special programming interspersed with moments of silence.

McCann said that she has prepared a number of public service announcements for iM Networks' affiliated streamed stations that educate listeners about the CARP rates and encourage them to contact their congressional representatives.

Additionally, Wolf FM, an online radio station based in Nashville, Tennessee, is planning an all-day talk show on the issue which will be broadcast by a number of Internet radio stations.

"These rates are really a concern for the entry-level Webcasters," said Susan Pickering, executive director of the International Webcasting Association (IWA), who will be speaking on Wolf FM tomorrow. "They could cost (the Webcasters) 100 percent or more of their daily revenue."

David Landis, founder of the Ultimate-80s Net station, said that if the CARP rates go through he expects 99 percent of the 10,000 estimated Webcasters to disappear.

"We'd have to go off the air," Landis said. "The only Webcasters that could survive would be the most deep-pocketed companies that have other sources of revenue and can afford to take a loss."

But while the Webcasters fight to stay online, the record companies say that they are also fighting to give the artists and record companies the dues they deserve from Internet play.

"A day of silence is a perfectly appropriate message, because the public should know what the world would be like without the music that everybody takes for granted. If the people who make the music don't get paid to do so, that's what we'll have -- silence," John Simson, executive director of the SoundExchange digital royalty collection agency said in a statement.

Even after tomorrow's silence, high-volume debate over the issue is slated to continue when Webcasters and the record companies face off at a May 10 U.S. Copyright Office Roundtable discussion on the topic.

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