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Net radio repreive

Under pressure from fans of Internet radio, royalty-collection group SoundExchange will not raise royalty rates until the end of 2008, but the threat could still staunch the growth of Net radio.

Looks like the day of Net radio silence worked. Enough publicity was generated that SoundExchange, the organization responsible for collecting royalties on Internet radio broadcasts, has offered to impose a $2,500 maximum fee per broadcaster on July 15, rather than instituting the per-song fees that could have put many small broadcasters out of business and raised costs for big broadcasters into the tens or hundreds of millions (!) of dollars.

Nonetheless, it's only a temporary reprieve: the original fee increase will still go into effect in January 2008, if SoundExchange has its way. SaveNetRadio, the group that organized the day of silence, criticized (warning: PDF download) SoundExchange's move, noting that the threat of increased fees will have a chilling effect on investment in Net radio.

I suspect that SoundExchange hopes that public--and more important, government--interest in the issue will die down by the time the fees are due to take effect. But Representative Jay Inslee (D-WA), who cosponsored a billreversing the ruling that paved the way for the rate increase, has vowedthat Congress will continue to pay attention to the issue.