As Engadget recently reported , senators Ron Wyden (D-Ore.) and Sam Brownback (R-Kan.) have pledged to move forward with the Internet Radio Equality Act when Congress returns in the fall unless the industry is able to forge a solution amenable to webcasters. In a press release issued August 2, the senators offer their analysis of the situation:
The fact is online radio services do not have enough revenue to support what will amount to unprecedented royalties. The $500 per channel minimum fee alone will deliver an over $1 billion annual windfall to record companies, a windfall that is not justified by any business or equity considerations. Now we are hearing that the recording industry is attempting to use this aspect of the [Copyright Royalty Board's] decision to force webcasters to adopt recording restrictions far in excess of the controls that have governed broadcast content for decades. While we strongly support a negotiated solution, we will not allow the minimum fee issue to be used to force an agreement that mandates DRM technology and fails to respect the established principles of fair use and consumer rights.The reality is that Internet radio is big business for some, and nothing more than a labor of love for others. It is true that some companies are raking in millions, but for every company turning a profit there are a dozen people running their own independent station and spending money as opposed to making it. For these stations even the $500 minimum fee would probably put them out of business, and Wyden and Brownback's legislation would forego this minimum fee and the elaborate scheme associated with it in exchange for a flat percentage of the revenue raised. As Webpronews points out, the Internet radio saga is even stranger than it first appears. While many online radio stations play only independent music, "SoundExchange and the RIAA secured legal authority to collect royalties even from nonmembers and distribute the money to independent artists and labels." In other words, even if a station only plays music from performers it has obtained explicit permission to use, it would still subject to the Copyright Royalty Board's fees.