From the Christian Science Monitor: "The Librarian of Congress is usually not considered a magnet for controversy. But on June 20th, the eyes of Internet broadcasters and music industry insiders will focus on James H. Billington [right] as he decides what royalties Internet radio stations will pay to record labels...

"The issue of Internet-radio royalties was first raised when Congress passed the Digital Millennium Copyright Act (DMCA) in 1998.

"This law, intended to strengthen the copyright protections of digital media such as software and CDs, also required the recording industry to negotiate with Internet broadcasters to determine how much artists should be paid when their music is played on an Internet radio station. The sides failed to reach an agreement, so Congress directed Mr. Billington to form a panel to set the rates...

"But in February, the panel chose a pricing model based on a per-song rate -- roughly $1.40 per song for every 1,000 listeners, or 70 cents for terrestrial broadcasters simulcasting online.

"Web-only broadcasters claimed that the rates would force them to shut down...Billington rejected the proposal, leading up to the final resolution of the issue next week.

"Had the royalty structure been approved, it would have spelled disaster for Internet broadcasters, according to Kurt Hanson, publisher of RAIN: The Radio And Internet Newsletter.

"'What was surprising about the [panel's] decision is that in the current advertising environment, that's about 200 percent of revenue,' says Mr. Hanson. 'When you have to pay 200 percent of your revenue to somebody, it kills your business.'

"But those representing the recording industry argue that this is beside the point. 'It's not really our job to figure out their business model, that's their job,' says [SoundExchange executive director John] Simson [above]. 'We've just asked that we be paid fair market value for our service...'

"[Jim] Atkinson of W3K, who says his station would have had to pay 342 percent of its revenue in royalties under the panel's proposal, is hopeful that Billington will either choose a system based on a small percentage of gross revenues, or send the problem back to a new arbitration panel with greater representation of smaller broadcasters.

"'Things will work out properly now; artists will finally get paid,' he says."

Read this entire Christian Science Monitor article here.

From the Philadelphia Inquirer: "Internet 'radio' is really a misnomer for music and other audio programming transmitted over the Web, capable of being heard by anyone with a reasonably new computer, a Web connection, and a pair of speakers or headphones.

"Sometimes called Webcasting, it is different from the often-illegal downloading of music made popular by the defunct Napster site, because listeners hear radio-style programming only while they are connected to a Web site. Typically the audio is not recorded onto their hard drives...

"Generally, however, the economics of Internet radio so far have been appalling, as advertising revenue has failed to support it. In October, industry pioneer NetRadio Corp. of Minneapolis, Minn., which had Webcast 100 channels of online music and information, went belly up after six years of mounting losses. And the number of Internet radio outlets has been dropping monthly since March, even as listenership continues to rise, according to audience-tracking service MeasureCast Inc.

"MediAmazing, a Webcaster in Nazareth, Pa., has just switched to a $3.95-per-month subscription model to stave off disaster...

"But many of those doing Internet radio say they fear they will be wiped off the Web if the Library of Congress, which oversees the US Copyright Office, sets music royalties that are too steep for the startup industry to pay. A decision on the rates is due by Thursday.

"'We're basically hanging in the lurch at this point because we don't know what the Librarian [of Congress] is going to do,' said Kevin Shively [right], spokesman for classical music site Beethoven.com.

"Royalty rates and detailed reporting requirements proposed earlier this year by a panel of arbitrators -- and rejected without comment last month by Librarian of Congress James H. Billington -- would have bankrupted many Webcasters, Shively said...

"But it is not clear how far Billington, a Bryn Mawr native, will go to remedy the perceived imbalance. A Library of Congress spokesman, Craig D'Ooge, said last week that Billington would not comment.

"If there are objections to his decision, it could be appealed in federal court, or altered by legislation, which some members of Congress have said they would initiate if the nascent Internet radio industry were threatened..."

Read this article from the Philadelphia Inquirer here.