EFF: New Legislation Will Kill Net Radio

The Electronic Frontier Foundation warned that proposed legislation now making its way through the Senate might put an end to music webcasts that use MP3 or other non-protected streaming formats. Services like Live365, Shoutcast, and smaller radio stations would be affected, and may be forced to use DRM technogy.

It would also mean an end to the streaming radio stations in iTunes as well. The iTunes stations also use DRM-less formats, the EFF said.

Senators Dianne Feinstein, D-Calif., Lindsey Graham, R-S.C., and majority leader Bill Frist, R-Tenn. Introduced the provision as part of a larger bill Wednesday aimed at ensuring that copyright holders are compensated as satellite radio allows its users to save programming.

"I believe our laws must strike the proper balance between fostering new businesses and technology and protecting the property rights of the artists whose music is being played," Feinstein said at a Senate Judiciary Committee hearing on the issue Wednesday.

Called the PERFORM Act, short for the "Platform Equality and Remedies for Rights Holders in Music Act of 2006," the bill would force satellite providers to compensate the record industry for songs saved on receivers. Industry executives say such a law is necessary so that there are no loopholes in regulations governing downloadable music.

Although Sirius has signed an agreement with the record labels to pay such royalties, XM has refused. The company says that the new law is the equivalent of a tax on satellite radio, and the technology records programming, not specific songs.

However, the law seems to go further than just satellite radio, and could end up affecting Internet radio stations as well -- most of which are low-budget operations already struggling to make the required licensing payments to record labels.

"Webcasters who use the statutory SoundExchange licenses to play music would have to give up MP3 streaming in favor of a DRM-restricted, proprietary formats that impose restrictions on any recordings made," the EFF's Fred von Lohmann said.

Currently, webcasters only have to use DRM if the original format is DRM-protected. The PERFORM Act would change that, and only allow "reasonable recording" -- essentially tape recorder-like copies with no way of fast-forwarding or rewinding to specific spots.

"So much for great time-shifting technologies like Streamripper and RadioLover," Von Lohmann mused.

The bill is currently under review in the Senate Judiciary Committee with a full Senate vote not likely for several months, at least.