All is not lost in the fight over Internet radio. For those of you late to the game, there’s an abundance of reporting on the Internet Radio controversy, from the good folks at music biz blog Hypebot to the experts at RAIN, the Radio and Internet Newsletter. Even the Daily Kos blog, known for inscrutable political commentary, has weighed in recently on the subject. But in case you missed the whole deal, here’s what went down....

In March, the Copyright Royalty Board (CRB) issued a ruling on the rates that would be paid by Internet Radio stations, the board members totally deep-throating the proposal laid out by the meat puppets at Sound Exchange, a RIAA-funded organization that would be responsible for collecting royalties from the stations. The board’s ruling would basically cripple Internet Radio stateside by raising the royalties that stations like Pandora or Radio Paradise paid to around 125% of their annual revenue. Ouch! The stations, naturally, appealed the ruling and, a couple o’ weeks ago, had their ears slapped back when the board refused to hear the appeal for “lack of new evidence.”

Outraged, but too busy to slap my anger down in print here, I predicted to me wifey that there would be a great shake-out of Internet Radio stations. Those companies located outside the US, who would not be affected a whit by the Copyright Royalty Board’s ruling, would grow and prosper; those stations that had the money to relocate would do so, leaving the states in their rear-view mirror as they moved towards broadcasting on the ‘net from Canada, or perhaps the Bahamas. Companies lacking the wherewithal to get outta town would simply disappear from the web....

Now, perchance, a forward-thinking Congressman by the name of Jay Inslee (D-WA) has introduced something called the Internet Radio Equality Act (H.R. 2060). The bill, which currently has eight co-sponsors and seems to be gaining steam, would basically fulfill the needs of Internet Radio broadcasters through five simple provisions. First and foremost, it nullifies the decision of the CRB on raising the royalties, an important distinction since this ruling sets a retroactive royalty rate to include 2006, and would go into effect in just a couple of weeks, on May 15th. 

Second, according to Kurt Hanson at RAIN, the bill would “change the royalty rate-setting standard that applies to Internet radio royalty arbitrations in the future so that it is the same standard that applies to satellite radio royalty arbitrations.” The bill would also set lower rates for non-commercial broadcasters and put other safeguards in place so that Sound Exchange and its label cronies don’t strip every penny they can from this fledgling media.

Needless to say, the cretins over at Sound Exchange were pig-biting mad when this bill was introduced, prompting Executive Director John Simson and General Counsel Mike Huppe to issue this hilarious press release [PDF link] in response to the proposed legislation. Equally humorous is Hanson’s point-by-point criticism that refutes this misleading and downright fraudulent effort to sway public opinion in favor of Sound Exchange, the RIAA (*cough…choke*) and the recording industry by using that stale old standby, “concern for the artist.”

My favorite is Sound Exchange’s assertion that “the proposed bill presents no factual or economic basis for rejecting the reasoned decision of the CRB.” RAIN’s Hanson replies that “the factual and economic basis has already been made clear in the press – the fact that the royalty is currently the equivalent of 80% to 300% of revenues for most webcasters (i.e., once other expenses are taken into account, a bankruptcy rate), compared to the 0% royalty the broadcast radio pays and the 7.5% royalty that satellite radio pays). “

The upshot of this is that it is in the best interests of musicians and music lovers alike to save Internet Radio, which provides a forum for music that would otherwise be ignored by mainstream corporate broadcasters. Whenever the RIAA and its bastard offspring wants to put their hand in our pockets to dig around for loose change, they always trot out the old bromide about "the suffering artist." Don’t swallow their lies! If you want to get involved, get thee hence over to the Save Internet Radio website, where you can get info on how to help support this valuable broadcast medium and save it from the grinning jackals at the RIAA.