Non-profit digital rights advocacy and legal organization Electronic Frontier Foundation yesterday published an editorial supporting passage of the Internet Radio Fairness Act.
That's the bill, introduced to both houses of Congress, that advocates say "would establish an equitable royalty rate setting standard for Internet radio" (background in RAIN here). The bill, among other measures, would require copyright judges to determine sound recording royalty rates for Internet radio using the "801(b)" standard of the Copyright Act (as is used for all other forms of digital radio), instead of the DMCA-mandated "willing buyer willing seller" standard.
(You can read more on 801(b) and "willing buyer willing seller" here.)
"Congress gave older, more established companies a leg up. For satellite and cable radio, the judges set prices to give the labels and artists a 'fair return' and the music service a 'fair income,'" writes EFF. The "fair return" and "fair income" refer to the 801(b) standard. "In practice, the judges tell these services to pay about 10% of their revenues to the artists and labels. For Internet radio, though, the judges are supposed to set rates based on what a 'willing buyer and a willing seller' would do in an open market. This sounds pretty good, except that there is no open market, so there’s no consistent benchmark. As a result, judges have set Internet radio royalty rates at cripplingly high levels."
The EFF piece concludes, "As long as the government is setting these rates, they should be using the best, fairest process possible. The Internet Radio Fairness Act will help make that happen."
Read the EFF editorial on their website here.