After 'Day of Silence,' Was Webcasters' Message Heard?

On the day that most American webcasters fell silent in protest of scheduled performance royalties rate increases to be imposed by the US Copyright Royalty Board, the key sponsor of House legislation to override those fees finally got one minute of floor time, to speak on behalf of his bill.

"Mr. Speaker, many of the 70 million Americans who enjoy music over the Internet woke up and their music was silent today," stated Rep. Jay Inslee (D - Wash.). "And the reason [is] because of an outrageous decision by a federal agency that caused outrageous increases of 300 to 1200% of the copyright fees that Internet Web broadcasters have to pay.

"And in protest of that outrageous decision," Rep. Inslee continued, "Web broadcasters today have joined together in a day of silence to let Americans know what's going to happen if Congress refuses to act to right this wrong. And I call today on my colleagues who will be hearing, and have heard, from many of their constituents on this day of silence.

"I hope they will co-sponsor H.R. 2060, the Internet Radio Equality Act. The simple fact is, if we do not pass this bill, Web broadcasters are going to go out of business, many of the 70 million Americans who enjoy music over the Internet will not get to listen to it. Congress needs to act, it's the right thing to do, and let's pass this bill."

While supporters of this legislation, including the webcasters themselves, claimed their efforts to provoke individuals to call their congresspeople resulted in flooded switchboards on Capitol Hill yesterday, an independent statement on the subject has yet to be issued by lawmakers.

But such a statement could come tomorrow morning, when the House Committee on Small Business will hold hearings scheduled to feature arguments on both sides of the issue. Cincinnati Public Radio CEO Richard Eiswerth is scheduled to speak on behalf of NPR, many of whose member stations have online streaming channels, and many of whom may see their royalties rise from as little as $500 per year to, as one San Francisco station director predicted this morning, hundreds of thousands.

Also slated to appear is American Federation of Musicians President Thomas Lee. The AFM has been cited by the SoundExchange performance rights organization as supporting the new rates. But recent comments in the press seem to take a more conciliatory stand, concentrating more on webcasters' need to file appropriate reports so that artists can be compensated to any degree whatsoever.

H.R. 2060 would cap performance royalties paid by most commercial webcasters to 7.5% of their revenues, which many are saying easily beats 140% or more. A statement released by Lee last month seemed to refer to this concession, and indicated the group may even agree to it if webcasters can ensure proper reporting.

"In return for below-market rates, small webcasters should file the required reports so performers can be paid," Lee wrote. "Bottom line, musicians' creative work has value and it is important that they be fairly compensated for its use." While that statement on the surface appears to refer to SoundExchange's recent offer to extend a reduced revenue-capped rate to small webcasters, tomorrow's hearings could conceivably challenge the grounds for not applying the cap across the board.