By Jonathan Krim
Washington Post Staff Writer Saturday, August 10, 2002; Page A01
WATSONVILLE, Calif. -- The battle over Internet broadcasting is raging right here, in a place they call the Pig Sty, in a town that mostly caters to food-packing businesses and farmworkers who toil in the surrounding fields of strawberries, artichokes and cabbages.
It's KPIG-FM, beaming a mere 5,500 watts (WTOP-AM in Washington is 50,000 watts), but which has achieved international cult status thanks to the Internet, an eclectic playlist of American music and a devotion to all things porcine.
In 1995, Pig Radio ("107 oink 5" on the dial) became the first commercial radio station to simultaneously stream its broadcast over the Internet. By this year, KPIG was averaging 200,000 Internet listeners per month, about 1,800 at any given time, often at their desks at work.
Then, last month, KPIG and many other radio stations pulled the plug on their webcasts after a federal ruling requiring royalty payments to record companies for songs played over the Internet. Many webcasters said the payments would put them out of business and were another example of the music industry trying to crush Internet competition.
The activist outrage of fanatical "piggies" and listeners of other small broadcasters and Internet-only music stations has become a public relations nightmare for the powerful recording industry.
Although both sides this week appealed the ruling by the librarian of Congress -- the recording industry argues the royalty rate should be higher -- a group of webcasters met privately with industry officials last week to try to negotiate an agreement that would reduce the costs. People familiar with the talks said they are cautiously optimistic a deal can be struck.
"We've been working on trying to create a small-webcaster type of license," said John Simson, executive director of Sound Exchange, the arm of the Recording Industry Association of America that negotiates licenses for copyrighted works. "We'll wait and see how those talks progress."
The royalty battle is one of the many thorny issues of copyright and intellectual property that is polarizing the development and distribution of digital music and video over the Internet.
The RIAA already had drawn the enmity of the Internet community for its relentless and largely successful pursuit of Napstser and other music file-sharing services that enabled users to copy music and trade with each other online. The courts have ruled that the system violates copyright laws by redistributing music that was only paid for once.
Putting radio broadcasts on the Web is not about copying. Unlike their European counterparts, U.S. broadcasters pay royalties only to the writers and publishers of songs, not to the performers through their record companies. But at the urging of the music industry Congress decided that that exemption should not apply to digital music, setting the stage for failed negotiations and then an arbitration over an appropriate royalty rate.
When the congressional librarian ruled that webcasters should pay .07 of a cent per play to the labels that own the songs, a cut from an arbitrator's determination of .14 of a cent, KPIG joined pure webcasters such as Beethoven.com and Ultimate80s.com in mobilizing listeners to convince Congress and the recording industry that even the lower rate would destroy Internet broadcasting.
The Internet Radio Fairness Act, a bill that would slash the rates for webcasters, has been introduced in the House by Reps. Jay Inslee (D-Wash.), George R. Nethercutt (R-Wash.) and Rick Boucher (D-Va.).
Of equal concern to the webcasters are possible requirements pushed by the recording industry that would force them to provide the music labels with extensive documentation of what programming is being played and when.
"That alone would destroy the [webcasting] industry," said David Landis, head of Ultimate80s.com in Los Angeles. The congressional librarian has yet to issue final rules on the documentation issue.
Landis, who estimated that he would have to pay more than $10,000 a year in royalties, has nonetheless decided to continue webcasting in hopes the rate will be revised. In the meantime, he and others are running up the royalty bill, which will be retroactive to when they began webcasting or to 1998, when the law took effect.
But many radio stations stopped webcasting, including KPIG, whose owners determined that the roughly $4,000 per month in fees would be too much for the small station to afford.
The waiting is agony for people like Kate Bell, who quickly e-mailed the station from Australia when the webcasts were cut off.
"Pass the razor blades," she wrote. "Life is no longer worth living."
A sad and angry Brian in Hong Kong e-mailed: "Praise the lard and pass the ammunition."
Al Boehmer of Annapolis, who works on communications systems for area hospitals, joined a cadre of fans who made KPIG a part of their lives beyond just tuning in. He travels to California for the station's annual Texas Uprising and Swine Soiree, a concert festival that has become a pilgrimage for fans from around the world.
In the process, Boehmer and others have become good friends with the handful of station deejays, who often put the visitors on the air. One deejay married a listener from Paris who came to visit the station.
"It's devastating for a lot of people," said Boehmer, 50, who discovered KPIG three years ago and made it his only source of radio. "I feel like it's corporate America trying to knock out the little guy for an extra buck."
KPIG's primary draw is a mix of Americana rock, blues and bluegrass rarely heard on the increasingly automated, ever-consolidating commercial music stations that serve the lion's share of the country.
But the station also provides a homespun, playful community that appeals to local and Internet fans alike.
