Congress May Rescue Net Radio By Mark Fleischmann April 30, 2007 — Internet radio broadcasters may get a reprieve from Congress. A bill surfaced last week that would reverse the recent royalty rate hike that net radio outfits say would have doomed them to extinction.

On Thursday, Reps. Jay Inslee (D-WA) and Don Manzullo (R-IL) introduced legislation that would roll back the royalty increase imposed by the federal Copyright Royalty Board. Net radio outfits, supported by Clear Channel and NPR, had protested the inflated royalties but the CRB had refused to reconsider its decision.

The bill would reinstate the previous royalty regime which involved a percentage of revenue rather than the new system's fixed charges per listener and per song. Net broadcasters would pay 7.5 percent of revenues through 2010 or 33 cents per hour per user. The percentage would put net radio on a level playing field with satellite radio.

That net radio pays performer royalties at all is remarkable in itself. All broadcasters pay royalties to composers, but only net and satellite radio pay royalties to performers. The Inslee-Manzullo bill is officially named the Internet Radio Equality Act.

Update: The Copyright Royalty Board has postponed the royalty hike from May 15 to July 15. SaveNetRadio plans to spend the two-month period "educating Congress."