WASHINGTON (Aug. 7) -- The Recording Industry Association of America (RIAA) today announced its intent to file a court appeal of the June 20 decision by the Librarian of Congress on royalty rates for Internet radio. The notice of intent will be officially filed with the DC Circuit Court later today, the deadline for all parties to alert the court whether they intend to appeal. Actual briefs will be filed later in the year.

The RIAA intends to argue that the Librarian’s interpretation of the deal with Yahoo! was incorrect, and that the Librarian improperly threw out 140 licensing deals that the record companies and RIAA signed with webcasters and other similiar companies.

BACKGROUND ON THOSE TWO ISSUES:

§ The Librarian of Congress was duped by Yahoo!’s self-serving testimony in the CARP. Yahoo testified in the CARP for one reason, and one reason only -- to lower the rate that would be paid for Internet-only transmissions, Yahoo!’s principal business. The Librarian mistakenly concluded that “Yahoo!’s business model is unique: unlike webcasters that create their own programming, Yahoo! merely offers programming by AM/FM radio stations and other webcasters.” Nothing could be further from the truth. At the time Yahoo! testified, it had already acquired Launch.com and intended to commit significant resources to Internet radio. Yet Yahoo! downplayed its Internet-only business during the CARP in order to obtain a lower royalty rate, and in fact, days after the Librarian’s decision, announced it was closing down its entire radio retransmission business. If the Librarian had correctly based his decision on Yahoo!’s actual business plans rather than the firm’s self-serving testimony, the final royalty rate would have been significantly higher.

§ The Librarian ignored 25 separate licensing agreements the RIAA had previously agreed to and submitted as evidence, as well as 115 similar deals signed by the individual record companies. If these agreements -- all of which represented rates born by a fair market -- were appropriately considered by the Librarian, the final royalty rate would have been significantly higher.

Comment by Hilary Rosen, Chairman and CEO of the RIAA:

“The Librarian’s decision was based on a misguided reading of the record. Not only was improper weight given to the testimony of Yahoo! but some 140 separate licensing deals were thrown out by the Librarian. The end result significantly undervalued the music used by Internet radio companies.”

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