BY PAUL MALONEY
A Missouri radio operator is urging broadcasters and others to unite to combat what he calls "unfair gouging" by the organizations that license music for public use -- and possibly establish a new music licensing system.

KTOZ-AM/Springfield, MO volunteer general manager R.R. Johnson has written an open letter to radio and television broadcasters, and other entities that pay music license fees to ASCAP, BMI, SESAC, and the RIAA. Johnson claims that these organizations fail to benefit the creators of music as they claim; rather, he contends that only a very small percentage of the money collected goes to artists -- and then to only a select few.

"Due to the ever-increasing rates being charged by BMI, ASCAP, and SESAC, and the attitude, intimidation, and threats of these organizations...The only way to do it...is for all of us to band together. If we stand united, we can get fair fees and treatment," the letter reads.

In the letter, Johnson claims to have enlisted the assistance of Keith Meehan, executive director of the Radio Music License Committee (a not-for-profit organization which represents radio stations in negotiating licensing deals with ASCAP and BMI), possibly to help abolish the current licensing system. An addendum to Johnson's letter says, "The suggestion has been made that a new licensing agency be put together to treat composers, publishers, and users fairly, reasonably, and honestly."

Johnson has also sent letters stating his case to U.S. Attorney General John Ashcroft (pictured left) and RIAA president and CEO Hilary Rosen (pictured below) ("CC-ing" President Bush on both!).

To Ashcroft, Johnson says the licensing bodies operate using "intimidation, threats, extortionist-like means, lawsuits." He also implies that ASCAP, BMI, and SESAC refuse to be specific about exactly which titles they license, to create confusion on the part of broadcasters and others which allows these groups to demand more than their entitled payment.

In the letter to Rosen, Johnson goes so far as to suggest (probably for "argument's sake" more than any real contention) that since broadcasters promote recording artists and spur record purchases, that the industry should pay broadcasters fees, instead of the other way around.

ASCAP, BMI, and SESAC are organizations that collect and distribute royalty fees to the composers of music that is used for public purposes (such as radio broadcast, or public "performance" in stores, stadiums, restaurants, and such). The RIAA is the organization which represents the interests of the recording industry. Up until this time, broadcasters have not been obligated to pay licensing fees to the RIAA. But with the advent of the Internet, the federal government decided that the RIAA deserves payment for streamed music -- whether from a "pure play" webcaster or a broadcaster duplicating its over-the-air content on the Internet.

Copies of all three of Johnson's letters are here.

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From The New York Times: "On Sunday, Dec. 16, with little disruption, a small Internet company called iWon began operating the remains of the Web portal Excite.com.

"IWon picked up Excite -- which was valued at $6.7 billion just three years ago -- at the fire-sale price of under $10 million as part of the messy bankruptcy of Excite@Home, the company that developed the Excite portal...

"It was the latest sign that the Internet has entered a reconstruction phase similar to those that have followed every other frenzied introduction of a new technology, from railroads to automobiles to personal computers. It is a predictable cycle of growth, collapse, rebirth: An initial land grab starts as people rush to get in first and get big fast. Then, as often as not, the leaders collapse of their own unsupportable weight and others pick up the pieces and turn the good ideas into real businesses.

"The Internet is proving to be different in one way: Internet vultures have no interest in the sort of physical assets -- railroad tracks, factories or office buildings -- that were bought for a song out of bankruptcy court in earlier eras. Indeed, the things with three dimensions, and the bills to pay for them, are what dragged down most Internet companies that have failed. Instead, the designs of the sites and the loyalty and traffic they developed before their demise are being valued most..."

Read this piece here. You may remember that iWon has an Internet radio service powered by RadioAMP.

From yesterday...

Wall Street analysts say consumer demand for subscriptions for rival satellite radio system XM is behind the rise in Sirius stock over the past two days.

Sirius shares were up more than 18 percent, to as high as $11.60 yesterday morning, before ending the day at $10.58. (As of 10:58am CT this morning, Sirius was at $10.95 per share.)

Late last January, the stock was valued at over 35 dollars, only to bottom out as recently as early last month, at just over two dollars per share. The screenshot above represents Sirius' stock price over the past three months (from Yahoo! Finance).

Sirius, whose service is expected to launch in February, still trails XM on the street, and in the sky. Shares of XM, whose service is already launched, were up about 3 percent at $19.65 on the NASDAQ, even though analysts had said the stock was already fully valued.

"I think it's just continued optimism over the holiday sales,'' Lehman Brothers analyst William Kidd told Reuters. "We expected a good Christmas season for XM, and Sirius is running on XM's shoulders basically.'' S.G. Cowen analyst Robert Kaimowitz told Reuters that investors may think XM's stock has topped out, while Sirius will still grow. "There's a huge difference in valuations between the two.''