The battle over Internet radio ? fairness and profits | Opinion Blog

I?m a big? fan of Internet radio. I love to hear sports,news and music from around the country. I even get a?kick out of out-of-town traffic reports and take joy when I hear an announcer in another city say it?s two hours from downtown to the airport.

So as long as I have access to wi-fi or my cellphone provider?permits unlimted?data, I?ll follow music and news and weather on the eights all over the nation.

But an interesting?battle is brewing in Internet radio??world. Internet radio stations have to pay higher royalty fees to artists and publishers than satellite and cable stations. The result is that age old problem of parity, or in this case a tilted?playing that forces Internet?radio stations?to run?uphill.?

?I discovered this quirk ?this week when I tuned to Pandora and was greeted with a pop up request to urge Texas U.S. Reps and Senators to support? Internet Radio Fairness legislation from?Representatives Jason Chaffetz (R-Utah), Jared Polis (D-Colo.)? and Senator Ron Wyden (D-Ore.)

?Here the problem as explained on this gadget news?website which I?ve excerpted below.???

???The reason is that online radio stations are placed on a different royalty-setting rate than the other similar services. Internet radio providers argue that the royalty rules hamper innovation and discriminate against Internet-based radio stations. The bill proposes moving online radio services to the same 801(b) standard of the Copyright Act that is used to set royalty fees for cable and satellite radio providers.

The difference in royalty rates paid by Internet radio services compared to cable or satellite services is substantial. Internet radio services pay over 55% of their revenue in royalty fees while cable and satellite stations pay between 7% and 16%. The new bill has also received support from Clear Channel, Engine Advocacy, the Consumer Electronics Association, and the?Computer?and Communications Industry Association.

?Frankly I?ve been??trying to come up with a logical policy argument against this?unbalanced playng field and can?t. It really comes down to three options ? whether to lower the percentage paid by Internet firms to the?satellite ?and cable level;?raise the cable and satellite percentage to the Internet level; or keep the government out of it and let the industries work it out.?And the one thing, I haven?t figured out yet is how recording artists would be treated in these scenarios, which is important given the recording industry?s history?of taking advantage of artists.

?Normally, I would say let the parties work it out except in this case it strikes me that doing nothing is a prescription for internet radio?becoming?a model with lots of listeners but limited profits. Ultimately, that means less competition and consumer choices.?

?I?m not a lawyer so I?d be interested in media competition experts and others giving their takes in the comments section. The subject isn?t?ripe for editorial comment yet, but I?d love to hear from those who have far more experience in these areas.

Source: http://dallasmorningviewsblog.dallasnews.com/2012/10/the-battle-over-internet-radio-fairness-and-profits.html/

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