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Fighting Unfair Royalties: The SaveNetRadio Coalition

The Copyright Royalty Board (CRB), part of the Library of Congress, recently decided to unfairly and disproportionately raise royalty rates on Internet radio broadcasts. This move flies in the face of the long tail approach to economics, demonstrates a bias to support the old-school, closed-minded morons in the RIAA, and will serve to destroy streaming music on the Internet, which will have a direct and meaningful impact on RIAA members and the artists they allegedly support.

To that end, I urge everyone to participate in the letter-writing campaign underway by The SaveNetRadio Coalition. Following is a copy of the letter that I sent to my US Senators and Representative via the site, followed by the form response that I received from US Representative Tom Davis (R-VA).

Here's the letter that was emailed to Representative Davis, Senator Warner, and Senator Webb:

Benjamin Tomhave
[address redacted]

April 23, 2007

[recipient address was inserted here]

Dear [recipient name was inserted here],

As a fan of Internet radio, I was extremely alarmed to learn that the Copyright Royalty Board has decided to raise music royalty rates by 300 to 1200 percent. For most webcasters the new royalties exceed their revenue and they simply will go bankrupt and stop webcasting. What's more, these rates are patently unfair, representing a major, marked discrepancy from traditional broadcast royalty rates.

The silencing of Internet radio would be a blow to listeners like me who enjoy the wide variety of choices only available via Internet radio. This will kill the great diversity of music that I hear over the Internet and all the independent artists who have a difficult time breaking through on other forms of radio.

I respectfully request that Congress look into this matter and take action to prevent it. Please understand that time is of the essence since the new royalty rates are retroactive to January 1, 2006 so they will cause immediate bankruptcies if they become effective for even one day. Please don't let the music die.


Benjamin Tomhave
[phone # redacted]

Here's the form response that I received from Representative Davis:

Dear Mr. Tomhave:

Thank you for contacting me regarding the decision by the Copyright Royalty Board (CRB) regarding Internet radio royalty fees. I appreciate hearing from you on this issue.

As you may know, the CRB is an oversight body within the Library of Congress charged by the Congress to settle royalty disputes in the music business. On March 5, 2007, the CRB issued a revised fee structure that would raise royalty payments for Internet radio stations. Since the CRB first ruled on this issue in 2002, rates for a copyrighted performance were set at 0.07 cents per use or a total flat fee of $500 a month. Under the revised pricing structure, however, rates will soon rise to 0.08 cents per performance and be phased up to 0.19 cents per performance by 2010. As Internet radio has blossomed in the past few years, listenership and thus the licensed rights being used have increased. CRB therefore felt it appropriate that the internet radio industry pay a larger and direct percentage in proportion to this increased usage.

I am concerned about the potentially devastating effect these fee hikes could pose to this fledgling industry. Internet radio offers vast choices and options to consumers in Northern Virginia and around the world. On the other hand, this industry is growing by leaps and bounds and it is their duty to provide just payment to those artists that appear on their channels.

I am hopeful that during the appeals process a fair and reasonable amount of compensation can be agreed upon by all parties involved. My constituents benefit greatly from this unique service, and it would be a shame to burden this new and exciting industry before it has the chance to make its mark. Please be assured that I will continue to monitor this situation as it unfolds.

Again, thank you again for contacting me. Please continue to keep me informed of issues of importance to you.


Tom Davis
Member of Congress

Overall, I found the response to be adequately neutral and measured. I responded with the following additional information (via his web site form as the reply-to address bounced):

Dear Congressman Davis,

I urge you to pursue this matter with a greater sense of importance.
According to the SaveNetRadio Coalition (http://savenetradio.org/), the
request for an appeal has been denied. This is very troubling to me as it
suggests that the Library of Congress and the Copyright Royalty Board have
no interest in discussing the issue in a learned, rational, logical
manner. It belies a "sell-out" alliance with corporate interests, as
represented by the RIAA, that is not in the best interest of the citizens
of this great country.

It should be noted that not all members of the RIAA agree with the
heavy-handed approach presented. For example, EMI has recently reached an
agreement with Apple, Inc., to distribute its music without DRM protection
via iTunes (http://www.apple.com/pr/library/2007/04/02itunes.html). This
change in approach indicates a recognition and willingness on their part
to move into a new age of information sharing and monetization of

For more information on this new approach to conducting business, I highly
recommend reading the non-technical economics book "The Long Tail" by
Chris Anderson. It is very informative and would be excellent guidance on
this issue. He also maintains a blog on the topic, of which the following
recent post is particularly relevant:

Thank you for your time on this matter and your commitment to finding a
solution that meets the needs of the people.



Benjamin Tomhave, MS, CISSP, NSA-IAM, NSA-IEM

By the way, if you're wondering about ties into infosec here, consider for a moment that Rep. Davis is a ranking member of the House Government Oversight and Reform Committee. As part of his work with that committee, he recently gave the federal government a C-minus rating on information security efforts.


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