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Webcasters ask court for delay in fee increases

Large and small Internet radio operators and National Public Radio file for an emergency stay to the new rules, scheduled to take effect July 15.

Large digital media companies, small Webcasters and National Public Radio on Wednesday asked a federal appeals court to stall controversial new fees scheduled to kick in next month.

In a filing with the U.S. Court of Appeals for the D.C. Circuit, the Webcasters argued new royalty rates scheduled to take effect July 15 are "radical and arbitary" and requested an emergency stay of the decision by a three-judge copyright panel.

The SaveNetRadio Coalition, whose members include prominent Net radio operators RealNetworks, Yahoo, Pandora and Live365, said it hoped the move will allow Congress more time to act on two similar proposals that would reverse the royalty rate increases.

The new rules, announced in March by the U.S. Copyright Royalty Board, enjoy support from the record industry group SoundExchange, which collects the payments and maintains the changes are necessary to ensure artists are adequately compensated. Facing pressure from Congress, the non-profit group last week offered a deal that it said would allow small Webcasters the option of paying existing fees.

But Webcasters promptly blasted SoundExchange's latest offer as vague and potentially limiting to the growth of the Internet radio industry. They have vehemently opposed the rate increases all along, claiming the rate hikes will cripple their businesses by forcing them to hand over 300 to 1,200 percent higher fees through 2012.