iI found this article buried inside the LA Times website:
Judges clear way for higher Internet radio royalties
By Jim Puzzanghera, Times Staff Writer
10:51 AM PDT, July 12, 2007
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WASHINGTON -- A federal appeals court panel has declined to delay a substantial increase in royalties that Internet radio stations owe for playing music, clearing the way for the hike to begin on Sunday.
Webcasters had sought an emergency stay from the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the higher rates would drive many of them out of business.
Some small Internet radio stations already have stopped broadcasting to avoid accruing royalty payments because the rate hike is retroactive to Jan. 1, 2006.
The court made its ruling Wednesday and released the decision this morning.
The Copyright Royalty Board, an obscure group of federal judges, set the new rates in March, eliminating a provision that allowed small webcasters to pay 10% to 12% of their revenues instead of a set per-song fee for every listener. The current rate of .0762 of a cent each time a song is played will more than double by 2010, and many Internet radio stations will face royalty payments greater than their revenues.
Many individuals make little or no money through their online stations, so the decision made webcasting prohibitively expensive.
Although the federal appeals court panel declined to stop the rate hike before it kicked in, an appeal is still pending before the court. Congress also is considering legislation that would halt the increase, although it could be months before it comes up for a vote.
In the meantime, webcasters are negotiating with SoundExchange, the organization that collects and distributes Internet music royalties. It has the power to strike separate deals.
"We're hopeful that Congress will take steps to ensure that Internet radio is not silenced, and that webcasters and SoundExchange will find a way to compromise and maintain the diversity and opportunity of Internet radio," said Jonathan Potter, executive director of the Digital Media Assn., a trade group representing many Internet broadcasters.
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