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Congressional Opposition to CARP Royalty Proposal Doesn't Go Far Enough

Yesterday, Newsbytes reported that a bipartisan group of 20 members of Congress has voiced opposition to a music royalty proposal from the U.S. Copyright Office. The Copyright Office's Copyright Arbitration Panel (CARP) has proposed a royalty of $0.0014 for every song streamed over the Internet by Internet-only webcasters. Terrestrial radio stations who also stream their programming over the Internet would pay only half that rate.

This doesn't sound like much money, but the final figure must be multiplied by the total number of users connected when the song is played. So, if 1,000 users are connected, the royalty is actually 1000 x $0.0014 or $1.40 per song. If you extrapolate to a full year at 10 songs per hour, 24 hours per day, that's over $120,000 in royalties. It's hard to imagine how anyone other than an Internet giant or a large radio station will be able to afford to operate an Internet-based music webcasting business with those sort of royalty requirements.

Furthermore, as Doc Searls pointed out, the congressional representatives have not objected to the reporting requirements which will drive many broadcast stations off the Internet. Examples include a host of college radio stations, most notably in our view, WRPI. We reported on the problems that WRPI anticipates if the CARP proposal is adopted over on RCNJ.org.

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