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From CBS Marketwatch: "Proposed artist compensation fees will shut down independent Internet radio, Webcasters told Congress on Thursday.

"'Property royalties are almost three times all our other operating expenses, said Frank Schliemann, operator of the small Vermont Webcaster Onion River Radio. 'We will be bankrupted by royalties...'

"Webcasters and industry advocates argued the CARP decision only took into account the interests of big players like Yahoo and AOL Time Warner, which generate billions of dollars in cash flow. But most Webcasters are tiny independent operations, sometimes run as hobbies, without large revenues.

"The issue has been especially complicated for AOL, which benefits from Webcasting but also represents recording artists through its Time Warner music holdings. More than 10 million people visited AOL in March to listen to music, according to Jupiter Media Metrix."

This entire article is available at CBS Marketwatch here.

From Reuters in USA Today: "Internet radio stations warned Congress on Wednesday that a proposed royalty rate that could take effect next week would probably drive many of them out of business.

"Backed by data from market-research firm Arbitron, online radio stations who 'Webcast' music over the Internet told the Senate Judiciary Committee that a rate proposed by a U.S. Copyright Office panel would require them to pay out more money than they could possibly take in from advertising...

"Recording companies said they could live with the royalty rate, although it was lower than they hoped, and urged the committee not to interfere with the Copyright Office's decision when it is announced next Tuesday...

"Committee Chairman Patrick Leahy, a Vermont Democrat, said he...had not reached any conclusions about the royalty rate. 'If I had the power right now to come up with a solution, I'm not sure what that solution would be,' Leahy said."

From Reuters in USA Today. Read the entire article here.

From CNet News.com: "Independent Webcasters and the recording industry testified at a Senate hearing Wednesday over a proposed royalty rate for online radio, just days before a federal arbitration panel rules on a licensing regime for the new medium...

"At the hearing before the Senate Judiciary Committee, the Recording Industry Association of America (RIAA) testified that it supports Webcasting and wants online stations to succeed. But it said artists and record companies should be fairly compensated for the performance of their music in this emerging media. The compensation, according to the RIAA, should be determined through a fair process and should be based on the market value of the sound recordings.

"'If Webcasters don't succeed, artists and record companies stand to lose an important new revenue stream,' Hilary Rosen, chief executive of the RIAA, said in her testimony. With the music industry hit hard by piracy, 'new revenue streams are more important than ever in a world where new technologies are dramatically changing the way people get and listen to music.

"The Webcasters, however, disagreed with Rosen's statements, saying they are not asking for a free ride. They said they want to pay royalties to recording artists and ensure all creators are fairly compensated for their work. But they said the proposed fees would be 200 percent of current revenues for most independent Webcasters, forcing many to shut down.

"'It's disingenuous to say, "We want you to succeed," while at the same time asking for royalty rates that will ensure bankruptcy,' said Kurt Hanson [pictured at last Friday's U.S. Copyright Office roundtable], a publisher for Radio And Internet Newsletter RAIN. 'Most Webcasters have no problem in the digital world with a royalty being paid to artists or to the copyright owners and, as Ms. Rosen says, at a "fair market rate."'"

Read this entire article from yesterday in CNet News.com here.