Library of Congress rejects Webcaster royalty rates

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By Scarlet Pruitt

(IDG) -- In what is being seen by Webcasters as a ray of hope, the U.S. Librarian of Congress this week rejected proposed royalty rates set forth by a U.S. government panel.

Webcasters claimed that the proposed rates, which were set forth by the Copyright Arbitration Royalty Panel (CARP) last February, were exorbitantly high and would have forced them out of business. The CARP recommended a per-song, per-performance royalty rate of US.07 of a penny for radio broadcasts and .14 of a penny for all other copyright audio broadcast over the Internet.

Those rates have now been scrapped, however, and the Librarian of Congress is due to issue a final decision on the matter before June 20.

Groups representing the Webcasters expressed relief at the agency's move on Tuesday.

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"(The) decision by the Librarian offers hope that the final royalty will be more in line with marketplace economics than was the arbitrators' proposal," Jonathan Potter, executive director of the Digital Media Association (DiMA) said in a statement.

The final royalty rates will dictate how much Webcasters have to pay record labels and copyright holders for works they have stream over the Web. Additionally, the rates are retroactive, spanning back to 1998 when the Digital Millennium Copyright Act (DMCA) was enacted.

While the CARP's proposed rates were much higher than the Webcasters were prepared to pay, they were also lower than the fees suggested by the music industry. The two sides have been locked in a royalty melee since the DMCA was passed.