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The Almighty Buck

Latest Salvos in the Ongoing Battle Of Webcasting 197

detroitindustrial writes "The Register reports on a backroom deal that screws small webcasters. The Voice of Webcasters, working with the RIAA, negotiated a deal that Congress is trying to make into a law. These rates give big discounts to the largest webcasters, while leaving around 96% of the smaller webcasters to suffer and die under the CARP rate. This is being done through the bill H.R. 5469, the Small Webcaster Amendment Act of 2002. It was originally a one paragraph bill to delay the CARP rates for 6 months, and was widely supported in its original form by the webcasting community. After the RIAA rewrote it, it turned into 30-page monstrosity that had no relation to the original bill. It has already passed in the House. Ann Gabriel, who was on the International Webcasting Associaion legislative committee, recently resigned in disgust over this sell out." It appears that the Register article misrepresents a few of the issues. Rusty Hodge, of SomaFM, has more on the actual effects of HR 5469...
This is an email from Rusty Hodge, SomaFM's head honcho, which was sent to the Pho emailing list. Reprinted with permission:
Date: Mon, 14 Oct 2002 01:26:57 -0700

From: Rusty Hodge

The RIAA seems to have managed to really get a rift going in the
webcasting community.

I'll tell you all I know.
"Somebody shine a light of truth into the nature of these proceedings. You have many friends on pho list. Speak up. This is another dirty deal."
-- [ quote from The Register article ]
This article is based on a lot of incorrect information. What appears
to have happened was that someone on the
mailing list forwarded a bunch of messages from that list to the
author. (Nevermind that the mailing list messages have a disclaimer
which say that they are confidential and not for publication without
prior consent). I am annoyed that I was quoted out of context in the

Tthe headline is based on one message that someone who opposed HR5469
posted, a message which is not accurate. The 96% number came from a
person who opposed all webcasting royalties and based his
calculations on the directory. It did not take into
account the broadcasters who operate via Live365 (which includes
thousands of broadcasters), the Windows Media radio directory,, etc. It also assumed that all stations listed in the directory are actually accessible. Because of the way
that the shoutcast automated directory works, even if you setup a
shoutcast server to privately distribute audio in your house or
within an office, by default it will appear in the
directory. So will stations that do not have the network bandwidth to
reliably stream to a single listener. Anyone can run the Shoutcast
software on a DSL line, yet can't sustain a single listener because
of bandwidth limitations. And the statistic does not take into
account that many of those Shoutcast broadcasters are not based in
the US nor does this take into account where the listeners are.
(Remember, the DMCA/CARP fees only apply to listeners in the US.)

Now the current CARP rates - if you broadcast 12 songs an hour, and 7
average concurrent listeners, you'll be paying $516.50 a year. If you
only look at stations with more than 7 concurrent listeners on
average, or 5040 hours for the 30 day sample period, you get about
320 stations, and those stations represent 98% of the shoutcast
audience (based on listener numbers)!!! The remaining 2700 "stations"
are fighting for about 400 listener.

Of that 3000+ shoutcast stations listed who will be "screwed", more
than half of them do not have any listeners. If you have sampled
some of those near the bottom of the rating stations, you'll find
that many of them are either broadcasting silence, or their stream is
technically unlistenable (more dropouts than audio or you can't
connect to the stream at all).

( - has a rolling 30 day statistic
snapshot, which these numbers are based off)

HR5469 grants a lot more relief to a larger body of webcasters than
you'd think from reading that one mailing list. To the rest, HR5469
DOESN'T CHANGE ANYTHING. If it passes or fails, nothing changes for
the smallest webcasters.

(By the way, Live365 is neither harmed or hindered by this bill.
Their statement is here:

Live365 is also represented ONLY by DiMA. Additionally, Live365 covers
the royalties for their member broadcasters, their member broadcasters
are not directly affected by this.)

Any webcaster with an average of more than about 25 concurrent
listeners is better off under this deal than the previous CARP
ruling. Beneath that limit, there is no difference.

There is another quote that is very misleading in the article:

``And privately, even members who support HR.5469 agree that it will
"seal the fate of this industry to be dominated by big webcasters,"
according to correspondence seen by The Register. ``

Actually, the quote "seal the fate of this industry to be dominated
by big webcasters" came from Kevin Shively (also fellow pho) of, on 9 Oct 2002. Kevin has stated many times that he
does not support the version of 5469 that was passed.

The Register should have attributed this quote because it completely
changes the meaning of it., a 14-employee company, is
owned by Marlin Broadcasting, a company that owns several FCC
licensed over the air stations. Kevin does not support HR5469 because
he believes that it sets the definition of small webcaster at too low
of a level. But I'll leave it to him to tell you what he thinks about
the bill. Kevin has been a driving force in lobbying for fairness for
small webcasters, and ironically, HR5469 would probably not have
passed without him, and it is very saddening that he will not benefit
from it. Kevin will hopefully post his concerns with the bill (I
recall it is Section 4 that he has problems with).

For the record, SomaFM feels that 5469 is far from a perfect bill.
However, we think it is a good starting point. Kevin has expressed
concerns in this bill setting precedents that will harm many
mid-sized webcasters. I believe that NAB is not supporting the bill
for the same reason.

``But the compromised Bill has some surprising backers. SomaFM and
KPIG are urging listeners to support the revised, RIAA-negotiated

I was quoted somewhat out of context talking about advertising. I was
talking about a variety of options available for small webcasters,
one of which was advertising. However HR5469 extends the definition
of non-commercial webcasters to any non-profit organization, not just
FCC licensed non-commercial broadcast stations. That rate is less
than a third of the rate that commercial webcasters pay under the
current CARP fees ($0.0002 vs $0.0007). This I believe is a big win
for non-commercial internet only webcasters.

I was also pointing out that $500 a year minimum, vs the small
webcasters demand for $250 a year minimum, was negligible. I was also
pointing out that as they grew, and hit the $2000 minimum under the
new plan, that they would have an audience of over 25 average
concurrent listeners and at that point should have not trouble
obtaining advertising. They could bill up to $20k a year and have an
unlimited audience size.

SomaFM is listener supported and commercial free. We are not a
501(c)3 non-profit. Under the CARP rates, we would have to pay $500 a
DAY - over $180,000 a year in royalties. We generate about $20,000 a
year in donations now, which has covered about 85% of our costs
EXCLUDING the CARP FEES, and was on its way to covering all our
costs. (The cost that isn't covered is the cost of all the CDs I have
to buy!) SomaFM operates bare bones, our studios are in my garage.
We believe that we can generate enough additional donations to keep
us on the air with the rate proposed in HR5469. For us, it's
$2000-5000 a year instead of more than 10 times that under the old
CARP rates. So it's a no brainer for us to support this.

Another inaccurate quote:

"Many webcasters have already resigned in protest from the body
that's supposed to represent them: the Internet Webcasters'
Association. "

One person, Ann Gabriel, resigned. And Ann Gabriel was not a
webcaster, she produces live web events. She is not liable for past
CARP fees. In her open letter (which I've included below) she seems
to imply that IWA and VOW are the same.

Voice of Webcasters and the International Webcasting Association are
two separate entities.

The International Webcasting Association or IWA (which SomaFM is a
member), is not a lobby group on behalf of small webcasters. However,
since the IWA dues are far less than the other webcasting-related
trade group, DiMA, it has many more small webcasters than does DiMA.
As I recall, DiMA dues are $20k a year, IWA dues $300 a year. DiMA
represents bigger companies like Microsoft, AOL, Yahoo and smaller
guys like Live365. Jon Potter can tell you more about DiMA's goals.

Here's Ann's letter. I'm only forwarding it because it says it's an
open letter to the streaming community and the press, which i believe
describes many here on pho:

>Date: Wed, 09 Oct 2002 20:24:40 -0400
>Subject: [carplist] HR 5469
>Open Letter to the IWA Board of Directors, The IWA Legislative
>Committee, David Oxenford at Shaw-Pittman, CARP-List Members,
>Members at large of the Streaming Media Community and the Press:
>On October 1, 2002, at 12:00 pm Pacific Time, I began a 10-hour per
>day live broadcast with the intent to draw attention to the plight
>of Internet Radio broadcasters and raise money to benefit the IWA
>Legal Defense Fund.
>I did this based on the belief I was working to support HR 5469 as
>it was originally introduced into Congress; a bill calling for a
>stay in the rates imposed by the Librarian of Congress and due on
>October 20, 2002; and because I believed that Shaw-Pittman, the law
>firm involved in negotiating the deal with the RIAA was working on
>behalf of the International Webcasting Association (IWA).
>I am appalled, outraged and disgusted by the turn of events I have
>witnessed over the last week and will no longer sit and watch the
>blood, sweat and tears of the many be drown out by the disingenuous
>hue and cry of the few.
>I will NOT support HR 5469 as it was introduced and passed on the
>floor of Congress on October 6, 2002, nor will I encourage anyone
>who asks me to support it. I will immediately turn my attention to
>contacting every Senator I can, both by telephone and by fax, to let
>them know about the grave injustice that has been carried out in the
>name of the small webcasting community.
>Regardless of the stand the IWA takes on this issue, I, today,
>resign my membership in the IWA. I cannot stand by and continue to
>support an organization that allows its members to be bullied into
>accepting legislation that was negotiated one, under duress and two,
>by a team which originally set out to negotiate a private deal for
>themselves with the RIAA.
>I call on the members-at-large of the webcasting community to ask
>themselves why the press release about the deal on HR 5469 was done
>in the name of the RIAA and the Voice of Webcasters. I contend that
>the IWA was not represented here and its members are not responsible
>for the legal bills incurred by Shaw-Pittman. It is my belief that
>this was not a deal negotiated on behalf of the IWA or all of its
>I have been asked by many in the webcasting community how this could
>have happened. I think it is time for me to respond, and to let the
>webcasting community know all the facts about how HR 5469 could
>change from one paragraph as it was originally introduced, to a
>30-plus page bill serving only the RIAA and a few on the negotiating
>I believe I have an obligation to tell the truth NOW, as I know it,
>to the many who have banded together to fight for a common cause.
>They have seen their hopes go up in smoke because of a backroom deal
>negotiated under duress by a team that did not set out to represent
>webcasters at large and does not accept that the RIAA has a complete
>lack of respect for the webcasting community and never intended to
>deal fairly, honestly or forthrightly with the issues facing
>webcasters today.
>I wish you all the best of luck moving forward in a very difficult time.
>Ann Gabriel

SomaFM was not involved with negotiating this deal, although we did
sign a letter in support of it.

If you think my support is wrong, I'd like to hear the reasons why.

--Rusty Hodge
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Latest Salvos in the Ongoing Battle Of Webcasting

Comments Filter:
  • good grief (Score:4, Funny)

    by Anonymous Coward on Tuesday October 15, 2002 @09:15AM (#4452769)
    If this gets any worse, people are going to have to move underground and be forced to broadcast signals over radio waves or some such crazy medium!
  • by Viewsonic ( 584922 ) on Tuesday October 15, 2002 @09:16AM (#4452775)
    I'll just buy one of those new radios with hard drives built into them that are popping up everywhere. It's the new trend, and that will piss off the RIAA even more. Bleh.
  • Time for Peercast? (Score:5, Interesting)

    by RefriedBean ( 615424 ) on Tuesday October 15, 2002 @09:17AM (#4452779)
    And the lastest version supports easy relaying of shoutcast streams :) Peercast.Org []
    • by Anonymous Coward
      is it just me or does peercast by default allow anyone to connect to your web interface, and log in even with a wrong password, and change the settings as they wish?
      • When you first launch peercast, it only accepts connections from localhost, allowing you to set up a password, and your preferences. Only after a password has been set it will accept connection from outside.
  • Legal response (Score:2, Interesting)

    by gowen ( 141411 )
    Is there not any legal remedy small webcasters can take, regarding the shocking carve up their larger competitors have set up. Surely this must constitute a cartel operation, or at least a breach of some relevant antitrust legislation.

    ObDisclaimer: I am not a British lawyer, let alone an American one.

    ObJoke: Why is there only one Monopolies And Mergers Commission []?
    • Surely this must constitute a cartel operation, or at least a breach of some relevant antitrust legislation.

      Why does everyone always jump on the large-organization-screwing-innocent-person bandwagon? The RIAA has the right to defend the property of its members. There's no legislation preventing someone from webcasting music of their own creation. Fair use does not include broadcasting content that doesn't belong to you. It disgusts me that people will badmouth the RIAA and then willingly support them through CD purchases or just plain steal from them.

      Hypocrisy aside, I have an mp3 collection. The vast majority of those songs are made up of content I wouldn't listen to otherwise, and ceratinly didn't buy. I make no excuses, and should the cops show up on my doorstep, I would readily admit I did something illegal and I would, unenthusiastically but willingly, delete them. The last thought on my mind would be, "How do I convince the world that they're evil and I'm justified?"

      • Re:Legal response (Score:2, Interesting)

        by gowen ( 141411 )
        Why does everyone always jump on the large-organization-screwing-innocent-person bandwagon?
        Erm. I wasn't. I was jumping on the "large corporattions form cartel in order to unfairly crush smaller competition" bandwagon.

        I made no comment whatsoever on illegal filesharing.
      • It disgusts me that people will badmouth the RIAA and then willingly support them through CD purchases or just plain steal from them.

        Then you should appreciate my efforts. First, the obligatory:

        RIAA Sucks!!!

        Now that I have that out of the way, let me justify my rights to say that I couldn't care less about the 90% revenue stream generated from today's popular music. It's not a lot of my money going there. I mainly support unsigned artists []. If a new 'popular' song tickles my fancy, then I rely on one of the local used tape & CD shops to have an original used copy of it. It usually doesn't take long to get them in. I feel by doing this, I put as little of my money into the RIAA mainstream revenues as possible.
  • Suppor the Bill! (Score:4, Informative)

    by theBraindonor ( 577245 ) on Tuesday October 15, 2002 @09:19AM (#4452791) Homepage
    Who cares what the news reporters are saying! Go visit your favorite webcasters, and see what they have to say. I guarantee that they have been crunching the numbers on this bill--they don't want to go bankrupt.

    My favorite webcaster, Digitally Imported [], fully supports the bill.

    Again...before you start ranting away and listening to the FUD, check what your local webcaster has to say!
    • Ya... but it went from 1 to 30 pages once the RIAA got involved. I am happy is supporting and going to continue online, but I want to know what else in the 29 other pages got inserted and just hasn't been found yet.

      Expect in the future for the definition of SMALL to become larger and larger until that saying of "first they came for the stations with only 5 users, but since I had 5,000, I wasn't worried. ... Eventually they came for the 5,000... Who will defend me." I don't like definitions and groupings to be stated since those WILL BE CHANGED and the BOUNDARIES broadened to maximize the RIAA revenue in the future.

      Basically they are grabbing what they can now, and knowing that in the future they will go for more, probably before anyone can organize in time.

      Remember, this is the RIAA, unlike the MPAA that does enable LoTR and ST and SW, I have little to be thankful of the RIAA for.

      So RIAA, get bent!
    • by Anonymous Coward

      I went to my favorite Webcater (Live365) to see what they had to say.

      Live365 remains frustrated with the process of obtaining a fair royalty rate. HR 5469 fails to provide long-term relief to any webcasters, as even the smaller webcasters will still be saddled with the old rates if they become bigger. We do not believe that any webcasters would have agreed to the terms of HR 5469, without the threat of bankruptcy looming over them.

      It looks like someone carved out a sweetheart deal for themselves and screwed over everyone else.
    • My favorite webcaster, Digitally Imported [], fully supports the bill.

      But which bill do they support? The original one, or the current version? Do they even know?

      That's the most worrisome aspect of this whole thing. The "bait-and-switch" manuever, replacing one bill by another but still under the same name/number, renders expressed support very unclear.

      Sure, talk to your favorite webcaster. But if someone says "Support H.R. 5469" or "Don't support H.R. 5469" make sure you know which HR 5469 they're talking about.

      • Re:Suppor the Bill! (Score:5, Informative)

        by Anonymous Coward on Tuesday October 15, 2002 @10:58AM (#4453364)
        Greetings, I am actually the founder of Digitally Imported Radio (Ari Shohat).

        I can tell you that we did and DO still support both versions of the bill, except that the old one doesn't apply anymore.

        Many misunderstand the government procedures on this, and I would be very confused as well if I wasn't in the middle of it... As I have explained to others elsewhere...

        We DID Support the original bill as well!
        Rep. Sensenbrenner, the top Republican on the House Judiciary Committee, introduced the 1-sentence Stay bill on Thurs. Sept. 26. At the time it seemed bipartisan and noncontroverisal.

        On Monday Sept. 30 the artist and label "spin" machine pulled into high gear. Rep. John Conyers, the top Democrat on House Judiciary, circulated a letter to all House offices, claiming a 6-month stay would "rip up the paychecks of working musicians, vocalists and artists."

        The death knell for any chance that the 6-month stay version of H.R. 5469 had in the House came later in the day on Sept. 30, when the AFL-CIO (on behalf of artist unions AFM and AFTRA) came
        out with a statement condemning it.

        So the original Bill had no chance of getting through, so to go through with some negotiated deal was the only option save for death of stations.

        What happened here though is, the same bill number was used, as I am guessing is a standard practice in US. I really didn't know that. I couldn't understand why they used the same HR5469, but that's the way it works. That's how it became something else. There was NO SWICHEROO, if that's what the accusation is, you'd have to ask the goverment how they make things work on this one.

        In addition, I agree to everything Rusty from SomaFM said above. And I want you people to be aware of something... This bill, if goes through, is an Additional Option to the already existing rates. It doesn't push anyone out of business, it doesn't change previous rates, it only allows more people to be saved. The only companies (such as live365) that would not benefit are those that are too large to go under this deal. Note I said do not benefit, because they are also Not harmed explicitly by it in any way.

        If the bill doesn't get passed, 96% of stations that support 96% of listenrs roughly might just shut down this week. The author of register article obviously seems uneducated about the trends and realities of small commecial webcasters.

        About Digitally Imported Radio: We are a hobby station for almost 3 years. We are not a non-profit legally, but we don't yet make anything for ourselves. We run it as a hobby, and the only money we get is used right back into the station. We only get donations from listeners, and a tiny amount from banner ads (ha!). We just happen to have a lot of listeners who enjoy our FREE service fo the last few years, maybe that fact alone isn't sitting nice with a few webcasters who don't like this bill.
    • I am a local webcaster and I say the bill is worthless unless you happen to fit into the tiny financial segment of webcasters that were in on the top secret meetings. I departed the VOW list about three weeks ago just after it became clear to me that the hobbyists, educational and other non-coms (who make up the majority of webcasters in the world) were being used only as pawns and publicity, and not being considered or represented in any deal making processes. Am I bitter? absolutely. I and every webcaster I know have spent the entire summer writing letters, faxes and making phone calls to every aide in every congressional office and media outlet and begging our listeneres, friends and family to do the same to support every new idea the VOW turkeys came up with, only to have it shoved back in our face as a waste of time when the next big idea came along. At the end of it all, we (hobbyists, edu's and non comms) weren't represented even slightly and it came to light the through all the effort, the back room deal was going on the entire time. These small commercial guys and have will argue that the fees for hobbyists are cheap. "Oh, you can afford a couple thousand dollars in retros and $500 or a $1000 a year" - No we can't. Most hobbyisyts are getting by only on free broadcast sites and help from friends who have spare bandwidth. To sum up, I don't play Britney Spears, and I am certainly not helping foot the bill for her next boob job.
  • by EvilAlien ( 133134 ) on Tuesday October 15, 2002 @09:21AM (#4452802) Journal
    I love the smell of government-created competitive disadvantage in the morning.

    I'm not sure how things work in the US, but in Canada this kind of law would be open to quite a bit of challenge on that issue alone.

    The players in the recording industry need to be slapped with antitrust investigations or something roughly equivalent to bring the truth out into the open.

  • Good (Score:4, Insightful)

    by Theatetus ( 521747 ) on Tuesday October 15, 2002 @09:21AM (#4452804) Journal

    Heh heh... I loved the gratuitous mention of the blind guitarist in the article

    This is great. Really. It's an incentive for webcasters to look for sources of content not controlled by a media cartel. If you can't find decent bands who are willing to let you broadcast their music for free, you probably shouldn't be running an Internet radio station.

    • If you can't find decent bands who are willing to let you broadcast their music for free, you probably shouldn't be running an Internet radio station.

      You're assuming it's easy to find bands who'll let you do that. I've suggested it to a few, trying to find music for WOPN - they all said no, citing the perception that if they'd previously given away their music for free, it would be harder to get a record contract. They all dream of fame and fortune, and if they think supporting net radio will put that dream in jepoardy, they won't do it.

  • by Trusty Penfold ( 615679 ) <> on Tuesday October 15, 2002 @09:22AM (#4452805) Journal

    I don't think broadcasting music on the Internet could work, so I don't know why all these people are complaining about not being allowed to try.

    It takes me 10 minutes to download a 3 minute song ... that means if it was broadcast I would have to listen to it at 1/3 speed.

    Some things would sound okay slower, but other stuff wouldn't - the voices would be deeper and women would sound like men.
    • yeah, but on the upside, Celine is suddenly tolerable
    • It takes me 10 minutes to download a 3 minute song ...

      Mind you, it takes one minute for me to download a 3 minute song. In other words, I would lose time by listening to webcasts instead of just downloading the music files as plain warez :)
      • "Mind you, it takes one minute for me to download a 3 minute song. "

        A 3 minute song in one minute? You a Chipmunks fan?

        boombabeebaBAbada!boombabeebaBAbada!boombabeebaB Ab ada!

        Heh I doubt that song'll appear as a Chipmunk's greatest hit.
    • It takes me 10 minutes to download a 3 minute song ... that means if it was broadcast I would have to listen to it at 1/3 speed.

      I'm sitting here trying to figure out if I should laugh at a joke or just wince...

      You know, the webcasting streams typically don't broadcast at 128 or 160 kbps, like the music you'd typically download. Most webcasting offers 64kbps, and some have options of 48 or lower and 128 and higher streams. For a voice station 32kbps is just fine (at least on ogg), and some codecs can handle music pretty well at low bitrates. Of course, its kind of like AM radio versus FM, but if its the only place you can listen to what you like, it can be worth it.

  • Hm. (Score:5, Funny)

    by Komrade S. ( 604620 ) on Tuesday October 15, 2002 @09:22AM (#4452806) Homepage
    So I guess now isn't a good time to advertise my pirate radio station that plays the entire Avril Lavigne album 24/7?
    • Re:Hm. (Score:1, Funny)

      by Anonymous Coward
      But it's a perfect time to advertize your bad taste in music??
  • Justice (Score:5, Insightful)

    by Deton8 ( 522248 ) on Tuesday October 15, 2002 @09:22AM (#4452807)
    Why should webcasters have to pay more per listener than a major FM radio station?
    • Re:Justice (Score:3, Insightful)

      by ottffssent ( 18387 )
      Well, because they've got lower, I mean higher, I mean . . . Shit, it's the internet and everybody who knows nothing about it knows there's money in them thar' hills!

      That's probably only funny because I didn't sleep last night. On the plus side, I'll bet the bill makes perfect sense now though!
    • Re:Justice (Score:2, Interesting)

      by iamr00t ( 453048 )
      Well, efficiency I guess.

      You can't argue that it's much easier to track how many listeners you have and where in the world via internet radio than via real radio.
      In fact, there is no way real radio stations can be charged per-listener.

      That brings up another point - real radio stations have to spend alot of money on licensing (actualy no idea how much) and equipment upfront.
      Internet radio stations on the other hand are much easier to start up and scale.

      The bottom line is that internet radio is better radio for both IP holders, broadcasters, me and you (in terms of variety). It's just that pricing has to be based on real world figures, not .dom-bubble ones.
    • Re:Justice (Score:3, Interesting)

      by Alsee ( 515537 )
      Why should webcasters have to pay more per listener than a major FM radio station?

      You have to pay a higher royalty when you are giving someone a copy than when you're just playing a recording.

      You see, no one who listens to a radio ever records it, and everyone who listens on the internet is keeping a permanent copy.

      That is the reason. I don't know weather to laugh or cry.

    • Can someone who knows please explain the fee structures for broadcast radio and webcasting (either scheme) so we can get some numbers?

    • Re:Justice (Score:3, Interesting)

      by Nessak ( 9218 )
      I disagree with the RIAA/DCMA on allmost everything, but you need to think about what your saying.

      A Major FM radio station still needs to pay a *lot* of cash for transmitters, FCC fees, power, etc. If a "major" radio station had only 7 listeners, the cost per listener per song would be greatly higher then for a small webcaster paying CARP rates. I know as a fact a small NJ/NY non-profit FM station with a volenteer staff just makes it by with a $600,000.00 budget. Thats a lot of listeners/bandwidth if they were only webcasting.

      Of course, radio can scale well without increasing costs whereas webcasting (bandwidth, CARP) can not. One extrea listener on FM costs nothing while it costs a little more on webcasting.

      But lets not forget what we're talking about mainly is small webcasters being hurt. The reason many small webcasters are webcasters is becuase they could never afford the costs of actully getting FCC licenced. (Even if the equipment and music was free.)

      What we need is some sort of fair flat rate or percentage rate fee for webcasting. The recent bill, while still unfair to many groups, is closer to this then the orginal CARP rates. We should still push for more fairness for small non-profit webcasters, but to imply that FM is cheaper or that webcasters should pay absolutly nothing is just wrong.
      • Re:Justice (Score:4, Insightful)

        by broter ( 72865 ) on Tuesday October 15, 2002 @01:22PM (#4454544) Homepage Journal imply that...webcasters should pay absolutly nothing is just wrong.

        I think you've missed it. Just because the costs of web casting may be smaller does not imply that IP owners are entitled to more money. That runs counter to the philosophy of copyright in America (although IANAL). Royalties should not be robbery only limited by the broadcaster's pocket book.

  • Bait And Switch (Score:5, Insightful)

    by cybrpnk2 ( 579066 ) on Tuesday October 15, 2002 @09:22AM (#4452809) Homepage
    Boy, I really feel shafted by all of this. I listen to several channels at Live365 [] and received a notice from them asking for emergency short-fuse support of the ORIGINAL HR 5469 which was supposed to go to a vote in only 72 hours or so. I went thru the email-my-congressmen-and-senators routine and felt smug that I had done my part to help. Now the original bill has been rewritten so that it's not the one I asked to be supported. This whole thing is so unfair when compared to the sweetheart deal the over-the-air broadcast radio stations operate under because they are effectively commercials to go buy a CD. So who is the Gang of Bigwigs that has circumvented this whole mess by arranging the rewrite? Despite my distaste for them, I've got to admit they sure know how to work the system...
    • Re:Bait And Switch (Score:2, Insightful)

      by jenkin sear ( 28765 )
      I wouldn't worry too much- congressman (representatives and senators) routinely ignore email- most of it is astroturf. If you really want to influence a decision, call or write in the real world...

    • Re:Bait And Switch (Score:2, Informative)

      by rustman ( 143533 )
      Bit of clarification here:

      1. Live365 had chosen to work with DiMA, whose other members are at odds with what Live365 wants as a deal. Other DiMA members (Yahoo, AOL) do not want a percent of revenue deals like Live365 wants, so DiMA isn't pushing for a precentage of revenue deal, and hence Live365 is screwed.

      1a. The RIAA refused to include Live365 in a "small webcaster" deal. Because even though the broadcasters on Live365 are small, Live365 is one of the largest webcasters in terms of their aggregate.

      2. The original version of the bill was just a delay for 6 months, to see how the courts dealt with the appeals that have been filed. It just postponed things, it didn't solve problems.

      3. The original version of the bill was tabled. That is, it was dead in its original form. The bill's sponsors (e.g. House Judiciary Committee Chairman James Sensenbrenner's legislative team.)

      4. The gang of bigwigs isn't a gang of bigwigs at all if you're talking about the webcasters who are supporting this bill. It's a gang of despearate webcasters who have a lot to personally lose. Actually, the rewrite of the bill was crafted by the bills original sponsors in conjunction with the RIAA. David Oxenford, a lawyer/lobbyist representing small webcasters, was also involved trying to make the best deal for webcasters. (Like, getting the retroactives down to $2000 a year from $5000 a year.)

      Here is a list of the people who support HR5469 and have publicly signed a letter to the Senate in support of it:

      3WK L.L.C. - Jim and Wanda Atkinson, Owners - St. Louis, Missouri

      Boomer Radio , Ron Rubin, President and CEO - Boalsburg, Pennsylvania

      Classical Music Detroit, L.L.C - Robert F. Ottaway, Founder, Detroit, Michigan

      Carol Hess, Chatmasters Streaming Network
      Lewisville, TX

      Freshwater Radio, Michael Anderson, Great Falls, MT 59404

      Houndogradio, Frank Coon, Owner, Stone Mountain, Georgia

      KPIG, Bill Goldsmith, Online Operations Manager
      Santa Cruz County, California

      Montpelier Communications L.L.C., Onion River Radio
      Frank R. Schliemann/Founder - Montpelier, Vermont

      Radioio, Mike Roe, Owner , Jacksonville, Florida

      RadioParadise, Bill Goldsmith, Owner, Butte County, California, Inc., Michael Donahue , Sudbury, Massachusetts

      SomaFM, LLC, Rusty Hodge - San Francisco, CA 94110

      Ultimate 80s - Dave Landis, Founder - Los Angeles, California

      WebMedia Consulting, Inc. (Digitally Imported Radio) - Staten Island, New York

      Wolf FM - Steve Wolf, Owner - Nashville, Tennessee
  • by dlasley ( 221447 ) on Tuesday October 15, 2002 @09:24AM (#4452815) Homepage
    is FUD has spread to the Register, which i usually associate with something pretty close to reality in an information source. bummer.

    more info and yet another point of view at Bill's RadioParadise [] (scroll down to the comments section).
  • by Bonker ( 243350 ) on Tuesday October 15, 2002 @09:28AM (#4452836)
    Webcasting, at least the individual-run stations I see, could care less about CARP or any fees anyone seeks to impose on them. The individuals I see who do care about it don't have any plans to stop broadcasting, but instead intend to take their broadcasts deeper underground. A tactic I have seen is that a broadcaster will firewall his shoutcast or icecast stream and then do allows on individual IP addresses that want to listen based on e-mail requests. Of course this is easily defeatable by someone with half a brain, but not by automated methods.

    Another thing I've seen is webcasters who refuse to play music commercially released in the U.S. They play J-, K-, and C-pop, some of which is quite good. They play German techno and metal, and un-US-released Euro-pop. They also play tracks that are freely available downloads from amature-music sites like Acid Planet []

    This is, of course, the music industry's largest fear... that the U.S. public will realize that they are not the only, nor even the best source of music in the world.
    • Uplink underground, uplink underground. If you say that one more time, I'll uplink your ass, and you'll be underground!
    • ... or they could just broadcast from outside the US. The beauty of the internet, you can have intercontinental radio, and no way to stop it unless you want a nationwide packet filter.
      • no way to stop it

        Hah. Hah, hah, hah!

        Anyone who things that "intercontinental radio" will keep them safe from RIAA has something else coming. They can go after you using the local laws, or after your upstream provider in the US--or they can just buy you out.

        Everyone has a cost. Some people just have costs so large no one is willing to pay them.
        • They can go after you using the local laws, or after your upstream provider in the US--or they can just buy you out.

          IANAL, but I believe that the US courts tend to think that if you live in the US or make your 'product' available to US citizens then you come under their power. So if you live here (US), like me, you'd still have to go underground to broadcast.

          I'm all for the unsigned stuff, though.. I think it's about time we hear some music that isn't on the air due to payola.

  • by martin ( 1336 ) <maxsec@gmai[ ]om ['l.c' in gap]> on Tuesday October 15, 2002 @09:29AM (#4452842) Journal
    Again , still...

    Now how do they expect to police this with providers based in non-USA territories????

    I'd love for some of the larger internet sites (yahoo, google, live365, to up and move to (say) Russia, or some other country with a decent amount of connectivity and watch RIAA/MPAA etc try control to them. (I'm sure someone can suggest such a region).

    yes there's be issues (cf deCCS and the Norwegian justice system), but it would be interesting non the less.

    Anyway back now to normal broadcasting.......
    • Back to normal broadcasting he says. Ha! Normal broadcasting around me is horrible and has been for years. I listen to webcasters because they give you a choise, rather than being spoon-fed the latest crap. The only thing I use broadcast radio for is traffic and news. The case is the same for most people I know.
    • That's just it ... they don't.

      If you had read anything about it, you would know that this only applies to US-based stations, and then even only for their listeners in the US.

      It's just like stations on the borders -- they don't count listeners on the other side in the royalty calculations.
      • So how so I prove I'm not a US citizen (or even that I am). Goes back to the days of US crypto export when I had to prove I was a US citizen by supplying a valid name/address etc before I could download.

        IMO it won't work from a practicality point - everyone will become Icelandic :-)

        Still would like to see one of the big stations move out of the US due to this.
    • Well, the problem with that is that sreaming takes so much bandwith that it would flood both the undersea fiberoptics and the satelite networks that make up the global pipeline, if they were really popular. America has an insane amount of unlit fiber, partially because of the cost of burrying more fiber, and partially because technology increased the capacity those same fiber optics could carry. the world does not have an insane amount of unlit fiber.
      This is why technologies that increase fiber capacity are so important, especially if they only require minor modifications to the equipment (eg: nothing that would require say trying to change any physical reapeaters along a several thousand mile long undersea fiber optic cable)
      If you can 100x fold the capacity of 'existing' undersea pipelines it would reduce the cost of bandwith greatly and perhaps increase the revenue of those pipes, because you could go for traffic volume, instead or trying to entice people into paying a premium for it. I think that some of that has already come into play, since I've noticed much improvement on my access to taiwan and german sites, but it's still not perfect, and ultimately undersea bandwith will always carry a premium over land line fiber. Although ironically, it's potenetially cheaper to use a river and underwater optic cables than to dig up a city, although I'm sure that the largest cities that would be most applicable to already have a tunnel system which would remove the cost of 'digging up the streets' however, it would be interesting if rivers made it cheaper/easier to expand fiber infrastructure beyond the 'major' hub cities.
      • Not really the issue - people use the internet in non-US locations :-)

        Sure the places to host for high bandwidth are limited geographically (New and London being the top two). It's all about getting the content to the end user.

        Now if I could get 100 OC-48 pipes into Afganistan then that would suddenly become a nice location to host from.

        The problem here is RIAA (and the MPAA etc) are trying to place a royalties on content providors. Now this isn't necessarily a bad thing IF they get down to people who made songs (content) in the first place. BUT is doesn't (see earlier /. stories for this).

        I can't how how they can police the royalty calculation - they expect people to own up to being US citizens and assume that the providers are passing on this info. I'm sure that there will be point where it will be cheaper for (say) live365 to move to Australia (or whereever) and rather than RIAA royalties. IE RIAA may effectively price themselves out of the market.

  • Newsflash! (Score:5, Insightful)

    by wunderhorn1 ( 114559 ) on Tuesday October 15, 2002 @09:42AM (#4452892)
    NEWSFLASH: Large webcaster supports bill that helps large webcasters, calls on small webcasters to cut their whining.

    I mean, really, the difference between $250 and $500 is "negligible"? WTF? These people are hobbyists, they run these stations for friends and a sparse few random listeners. If paying an extra $250 is no big deal, then perhaps Mr. Hodge could send a check for that negligible amount my way; I'm a poor college student and could use the cash.

    • Here's a news flash for you...People like Rusty are also hobbiests. He makes nothing from SomaFM (donations of money and bandwidth never cover his costs.)

      If you can't affort $500, you're small enough to not attract the RIAA's attention. Meanwhile, you're trying to de-rail a bill that would allow stations like SomaFM to provide thousands with a quality source of interesting music. It's because of people like Rusty who have put a lot of work into these negotiations that there is a deal that makes small-time webcasting even remotely feasible for you. Show some friggin' respect.

      And how is your situation improved by this bill not passing? You're left with only the CARP rates which go into effect this month that would end up costing you way more than $500.

      Yeah, it sucks having to pay the RIAA $500, but a) you're not going to get a better deal and b) you're ruining independant internet radio for the rest of us (and by us, I mean listeners). So cut your whining and let the bill pass.
  • by NigelJohnstone ( 242811 ) on Tuesday October 15, 2002 @09:42AM (#4452895)
    I read Rusty's comment, but its playing with words. If the royalties have a minimum payment and a maximum payment then they favour the big guys over the little guys.
    It does not matter how you count the number of radio stations, all that matters is there will be many more big guys than little guys in the years to come.

    Next, this was a bait and switch move. Nothing you said changes that. They put one bill forward, got public approval for it, then switched it for another.
    The fact you are among the ones who gained from the changes alters nothing.

    What the RIAA did was split you guys in two, they pull a quick switch, and split the opposition in two. You turned your back on the little guys.

    Also yet again the RIAA has shown that Congress is a little puppydog whose chain it can yank.

    This is a nasty sellout.

    • The RIAA didn't split us in two. There was ALWAYS two camps on the VOW list. The Register article, while slightly dramatic in presentation, only scratches the surface of the internal workings. Many of us recieved email and telephone calls threatening us when we didn't just go along with whatever certain members of the group said or did. It was a bad situation from the get go.
  • by cHiphead ( 17854 ) on Tuesday October 15, 2002 @09:45AM (#4452901)

    I've been listening to rantradio for years and they sure as hell don't need "$20,000 a year" in donations to operate. Actually, they do it full time as a hobby and lose money anyway, but not tons of money. Cimmerian, the station manager, is perfectly capable of going out getting help and 'bandwidth donations' in a split second.

    Hodges of SomaFM is full of shit. I liked SomaFM, I really did, but its blatantly obvious that the $$$ signs are all Hodges is seeing now.
    • Your favorite internet radio station might not need $20,000 / year to operate, but its also a lot smaller than SomaFM. When you serve more users, costs go up.

      I know Rusty and can vouch for the fact that he doesn't make money off SomaFM. How do I know that? I'm a co-worker of his at his daytime job. I don't know what else to say, but that you're an ignorant fool for making these kind of allegations against someone who has devoted a lot of time, energy and his own money into providing a free service for people, most of whom are far more appreciative than you are.
  • Naive Approach (Score:5, Insightful)

    by Kefaa ( 76147 ) on Tuesday October 15, 2002 @09:46AM (#4452913)
    For the record, SomaFM feels that 5469 is far from a perfect bill. However, we think it is a good starting point.

    A "good starting point" are words we would probably hear describe the DMCA at its inception. However, instead of moving back to a more reasoned approach, it continues toward even more draconian measures such as Fritz's most recent incantation of what Fair Use and infringement mean. Of the now infamous, "skipping commercials is a contract violation" speach.

    I believe Rusty is sincere in his belief that this is a good start. However, I also believe it naive to think the tail will ever wag the dog. However, when the RIAA sent in a team of people to "re-write" this bill, looking out for "others" best interests is not why they are there. Further, to think that the bill will at any time in our life time be "revisited", except to make the restrictions greater and the fees higher, is unrealistic.

    As the saying goes "Fool me once, shame on you. Fool me twice, shame on me."
  • Rusty, CARP is evil (Score:3, Interesting)

    by twitter ( 104583 ) on Tuesday October 15, 2002 @09:47AM (#4452914) Homepage Journal
    You say,

    To the rest, HR5469 DOESN'T CHANGE ANYTHING. If it passes or fails, nothing changes for the smallest webcasters.

    Others say, CARP is crap []. If there is no change, it must still be crap.

    Here's the ammount of money I'm willing to give the RIAA to broadcast/host/make available non RIAA music - 0 -. That's zero, zilch, nadda, nothing baby. That's the deal, you can keep your golden stream on the soon to be obsolete fixed frequency radio broadcasts with their $500,000/year fees. I'm not impressed with it and your long rant leaves me less than reassured. Oh yeah, if you would tell your friends over at COX Cable to get their thumb off my upload rates and quit blocking my ports, I might be able to support more than one listener. I'm not going to hold my breath and I'm looking into this neat not so new 802.11B stuff. Please don't get any ideas about charging me money for avoiding RIAA rip offs there. Go away now.

  • If the evil empire or the RIAA/BPI or the devil with whom they are in league wishes to stamp on people, the quickest, not to mention cheapest way of getting redress is to use the market and encourage mass abstension from purchases of their products. A form of words like: "I will no longer purchase materials wholly or partly produced by RIAA members, and will ensure that others have sufficient information to make their own choice..." might be useful. An internet blacklist of RIAA material would have a wonderful calming effect on copyright hotheads. After all, even a monopolist faces some kind of demand constraint. Something like: "We are your customers. And you know those people you want to f**k with? That's not us." might do wonders to concentrate minds on the real issue.
    • by namespan ( 225296 ) <namespan@elite m a i> on Tuesday October 15, 2002 @10:22AM (#4453135) Journal
      I'd love to see this work. But I think the fact of the matter is that there's no way in heck or Utah that the majority of the population is going to care enough to resist the shiny lure of their favorite pop, country, or alt-rock band. Even one of my favorite "Indie" labels ( Razor and Tie [] records) may be part of the RIAA -- I'm not sure. How does a buyer know what's RIAA music anyway? How do you make an average buyer even care?
    • by anonicon ( 215837 ) on Tuesday October 15, 2002 @11:55AM (#4453803) sells nothing but [] independent music by artists who've chosen to remain independent instead of signing away their music to an RIAA label.

      I'm working with them now to make things better and easier for the public. We will make the RIAA irrelevant, but not today. Stay tuned!
  • The thing that jerks my chain is all the restrictions that are being applied here that are NOT applied for open air radio. Music fees? Right! Most radio stations get their music FREE from the damn record companies, just so they'll play it! Oh, but not the internet! Oh no, crappily broadcast mp3s are scary and industry destroying! OH PLEASE CONGRESS SAVE US FROM RLC ONLINE! THEY HAVE 11 LISTENERS! AAAAAAAAA!

    Christ, this makes me wanna go pirate some music.

    • > Most radio stations get their music FREE from the damn record companies

      Actually, money goes from Label => 'Indie' => Station. Radio stations get paid to play songs. Read about it here []

      Of course, radio is a limited-shelf-space medium, so it should be no surprise that it costs to get access to the shelf space.

      The internet features unlimited shelf space which is why they are just trying to price the small fish out of the water via licencing fees. Since they can't own all the real estate, its a supply and demand thing that doesn't play into the RIAA's members' hands.
  • by teamhasnoi ( 554944 ) <teamhasnoi AT yahoo DOT com> on Tuesday October 15, 2002 @10:07AM (#4453019) Journal
    Only play non-RIAA music! There are a million and one unsigned geniuses out there.

    Granted, it would take more work to insure a semblace of quality, but artists can record in their basements what would have taken a mid-level studio five years ago. The RIAA can't touch what it doesn't have control over.

    Leave the biglabel stuff alone. Christ, it gets enough airplay as it is. We certainly do not need another nuMetal station - The greatest hits of one band with different names!

    There is plenty of music that has nothing to do with the RIAA, would bend over backwards to be on a station (probably would record a web only version just for you).

    If you don't believe me, spend some time in Minneapolis, MN. The land of ten thousand lakes, and twenty thousand bands.

    • Are there any internet stations that currently play all non-RIAA (shark-free) music that we can listen to and support?

      "They bind our hearts: 'Let's sell them again and again!'
      Our plan understands the sea; we can wait for her coming."
      From the song "Infanto no Musume" in the Japanese version of Mothra (1961).
      • Since you asked, I'll bite. In Perpetual Motion non commercial. We're all here for the music - and the beer. As for the actual quality of the content - There's some duds, of course, but the vast majority of the stuff submitted to the show is high quality. There's an awful lot of small artist run labels now a days, and theyre putting our some good music as well as keeping themselves up to date and informed on the new methods of getting the music to the masses who would otherwise never hear it. As I've stated elsewhere, the law makes it difficult even if one doesnt play RIAA artists. As a station, I have to prove that any works I broadcast are covered by waivers signed by the copyright owner. It's a major administrative undertaking. So I suppose if you really want to support indie / rogue radio stations, offer to come by and help type. ;)
        • ISTM what's needed is a central registry of royalty-free music, as submitted by the copyright holder (the artist or whoever) so there can be no question about its legal status AND it's easy to keep track/look up any given song's status. Also, if the artist then signs with a label and doesn't bother to notify this proposed registry, he should have to pay his own royalties.

          Maybe someone is already doing this, since the concept seems so obvious :)

    • The RIAA buys small labels for this very reason. You'd have to check your playlist constantly to make sure that the RIAA doesn't own the rights to any song that you play. To say that this taks is onerous is an understatement. Basically, the RIAA uses its money to force everyone to deal with them.

      So while everyone here likes to troll /. by posting the overly idealistic "just don't deal with the RIAA" (with no mention that 100 other people have posted the same idea to 50 other internet radio articles), it's just not a realistic idea. But you got your 5, so I guess you can be happy and everyone who modded this post can happily mod it up to 5 the next time someone posts it.
      • I have 1,000,000 karma (Mega Super) so the 5 doesn't matter - what I'm am saying is: Have a relationship with unsigned artists. They are not hard to find. They will love the exposure, you will have a RIAA free radio station, and you get to bring unheard and sometimes startlingly original music to the public.

        Nowhere did I say that it would be easy - other than the fact that in a town like Minneapolis, you can throw a rock and hit 9 musicians. (and 3 of them are amazing...)

        I happen to be one of those 'unsigned masses'. I can tell you from personal experience that I have dealt with many incredible musicians who would love to 'give' a song or album to an independent streamer.

        Sure, you have to look - but I guess that still would be easier than trying to deal with 30 pages of legislation.

        • Most streams have very simple instructions to submit music and are eager to play it provided it fits with the overall theme of the stream. However, ensuring that none of the music in your playlist has fallen under the control of the RIAA means constantly auditing it which is a major pain in the ass.

          Every station operator has to deal with the RIAA or face the sisyphean task of keeping their collection "clean." Your original post (one that has been repeated ad nauseum here on /.) was advocating the later and I said that it isn't feasible from the webcaster's standpoint.

          My advice to you is to stop waiting for an "all-indie" station, find a stream that plays music similar to yours, and submit your music. I'm sure the operator would be happy to play it.
  • by Vengie ( 533896 ) on Tuesday October 15, 2002 @10:11AM (#4453052)
    Actually, the Classic case of the Tragedy of the Commons follows:

    I am a cow or sheep farmer.
    I may use the commons to graze my animal.
    The commons may only support N animals.
    There are P farmers.
    Therefore, I may safely graze N/P animals without damaging the commons, like all other farmers.
    There is NO incentive for me to not damage the commons, since I can profit extra by adding an extra cow.
    Rinse, Lather, Repeat for each individual farmer.
    This easily, _without_ a second iteration, produces NP+P cows, NP+P > NP, so the commons goes to ruin.

    Having said this, can someone please show me how in the hell _not having obscene webcasting rates_ is a tragedy of the commons?
    Webcasting may or may not have an economic impact on artists (*cough record companies cough*) and I make NO STATEMENT regarding that as I have absolutely no statistics and am completely unqualified to do so -- HOWEVER -- I am intelligent, rational, and quite capable of pointing out that the situation does NOT closely resemble the Tragedy of the Commons. (Music is a non-depletable good. Unlike an apple or a blade of grass -- comestibles and other consumables -- if one person listens to music, it can be listened to by another. The tragedy of the commons only applies to PUBLIC ACCESS goods which are CONSUMABLE)
    -nuff said
  • by namespan ( 225296 ) <namespan@elite m a i> on Tuesday October 15, 2002 @10:26AM (#4453152) Journal
    So... what did the old bill actually say?

    What does the new one actually say?

    I really can't tell from the articles or the comments... can someone give a simple explanation of the fee structures?

  • RIAA.COM is down, so I can't read that link. The slashdot story and the register article are vague. They seem to suggest that the minimum fee would rise from $500 to $2000?!?!?

    If I read that right, that's ReallyBad.

  • by Bob9113 ( 14996 ) on Tuesday October 15, 2002 @10:56AM (#4453350) Homepage
    From what I've been able to deduce, basically there was a bill in congress, HR 5469. It was a very short bill which put off CARP for six months. Webcasters were universally calling on their listeners to support the bill. Just before the bill went to the floor for a vote, the RIAA tacked on thirty pages of ammendments. With all the public and industry support, it passed easily, despite the fact that the public support was for the unammended version.

    The most significant part of the ammendments is that they create a decreasing royalty system. The more you broadcast, the less you pay per song. This ensures that something like Clearcast will exist in netradio. This makes it much easier for the RIAA to control what's played the same way they do with Clearcast.

    The decreasing scale kicks in at a low enough level that all of today's popular webcasting sites will see a reduction in the royalties they are responsible to pay relative to the current law--so they all blindly support it. What they are failing to realize is that there are no really big webcasters yet, and that this law guarantees that those big webcasters will come into existence. All of the current stations will be undercut by the megacasters who will be paying lower royalties. They will either; have to put on more commercials than the megas and lose their listeners, keep their commercial level low enough to keep their listener base and operate in the red, or sell out at fire sale prices.

    This bill will eliminate independent webcasting (for better or worse). As for you Rusty, you're an idiot. You're a big fish in a small pond now. Wait till you meet a killer whale--you won't even know what hit you.
  • ...Same as the old boss.

    I read Soma's rebuttal, and frankly, I thought it was a crock of crap. Just because most current small stations aren't listened to doesn't mean they should be thrown to the wolves, or that there wouldn't be newer stations that would fare better.

    This ruling effectively creates a limit below which operating a small webcasting station using RIAA-controlled music is effectively impossible. Only well-funded offerings will be able to survive, and this will limit the number of potential stations. This benefits the RIAA enormously, since they HAVE enough money to "consolidate" those limited number of stations, placing them effectively under their control.
  • by dschuetz ( 10924 ) <> on Tuesday October 15, 2002 @10:57AM (#4453358)
    It was originally a one paragraph bill to delay the CARP rates for 6 months, and was widely supported in its original form by the webcasting community. After the RIAA rewrote it, it turned into 30-page monstrosity that had no relation to the original bill. It has already passed in the House.

    Okay, lessee... H-5469.. Two versions... first version -- huh. doesn't do anything, just delays stuff. (The entire text of first version: The determination by the Librarian of Congress of July 8, 2002, of rates and terms for the digital performance of sound recordings and ephemeral recordings, pursuant to section 112 and section 114 of title 17, United States Code, shall not apply during the 6-month period beginning on October 20, 2002.)

    New version... modifies USC 17-112(e).. Hm... er, hm. Inserts sentence--Hey! Does anyone have a version of patch (1) that works on the US Code? ... Okay, it's complicated, and confusing. But it seems to me that the simple "1-paragraph bill" did absoultely nothing except delay everything for 6 months (as mentioned in the article above but glossed over by many posters), and the "30-page RIAA-sponsored monstrosity" actually attemts to present a solution.

    I'm sure other people have done a much better job of summarizing the bill's actuall effect, but it looks to me that, for small webcasters, it:
    • Sets retroactive rates (1998-2002) at 8% of revenue or 5% of expenses, whichever is greater
    • Sets 2003/2004 royalty rates to 10% of 1st $250,000 in revenue, and 12% of revenue above that
    • Allows for three equal payments over 12 months for back royalties
    • Sets minimum back-royalty payments for 1998-2002 of $500 to $2000 (or up to $5000 if you make a lot of money)
    • Allows for election of alternate (.02 cents per performance) royalty structure
    Now, I'm not a webcaster, so these numbers don't mean too much to me. It looks like a "small webcaster" is someone who didn't make more than $1,000,000 from 1998-2002, who isn't expected to make more than $500,000 in 2003, and isn't expected to make more than $1.25 million in 2004. That's pretty big, for a "small" webcaster.

    So what I don't understand is this:
    • DMCA is passed. Provision is made for LoC to set royalty rates.
    • Library of Congress sets said rates.
    • Everybody hates those rates.
    • Bill is introduced that doesn't fix rates, but simply delays them for six months, giving people half a year to figure out how to shut down without going into bankruptcy court
    • New bill is introduced that actually addresses the rate issue in reasonable fashion
    • Webcasters support new bill
    • Register article comes out saying that new bill screws people over, give us back the old bill (which, remember, didn't do anything
    • Slashdot picks up Register article (imagine that!) and 90% of posters agree with Register's FUD
    I just don't get it.
    • People have been stung so many times by the RIAA that anything it does is construed as being bad.

      It's a trust thing. The RIAA has lost any trust it had with webcasters (and many consumers), so anything they do, good or not, will be met with opposition. Its just deserts.

      People and organizations have reputations, trust levels, etc. Once they breach that trust or act in underhanded or selfish ways, their well intentioned actions will go unnoticed or untrusted. Thats human nature.

      That said, I don't know enough about this issue to judge their intentions either which way. Its just that you cant go from mean person to nice person and expect people to forget what they know about you and judge you only by your virtuous actions.

      I sense a lot of mistrust regarding this issue, and the recent payola and MAPS (fixed price) scandals are good reasons why I think its a valid position.
    • * New bill is introduced that actually addresses the rate issue in reasonable fashion
      * Webcasters support new bill
      I just don't get it.
    • "Small webcaster" in RIAAspeak means a revenue of not more than $1.25 million??! There are small-town *commercial* radio stations with less revenue than that.

      Another thread talked about how as few as 7 listeners was considered enough to garner revenue. Dunno about broader-product companies, but as a small specialty business, I've learned that anything under 10% of available population (or about 50,000 persons, whichever is larger) is not worth the cost to advertise to, because it simply won't hit enough interested people. Advertise to a few dozen or a few hundred? No way, and I can't see why any other business would advertise on such a microscale either, unless via very micro ad charges. IOW, I don't see how these small webcasters can possibly make enough "revenue" to cover costs, let alone pay fees and royalties at these levels.

  • capitalism at its best.
  • so, the obvious answer is to break the law if this passes.

    nothing changes

    problem solved.

    good day.

    *gets carried away to federal pound-me-in-the-ass prison for webcasting*
  • Out of curiousity, what royalties are webcast stations paying now? Why can't they just join ASCAP, like we real radio stations do? According to their payment plan [] ASCAP distributes rights to "radio, TV, cable, bars, clubs, restaurants, shopping malls, concert halls, web sites, airlines, orchestras, etc."

    I understand that CARP stinks, and I agree that webcaster shouldn't have to pay such high fees. But what, if anything are they paying now? And what's wrong with existing solutions?
    • Why can't they just join ASCAP, like we real radio stations do?

      Because, a I understood the thing, the RIAA wants them to pay extra cash on top of author fees (more than 100%), unlike you "real" stations.
    • Webcasters must pay ASCAP and BMI just as meatspace radio does. In addition to paying the publishers/songwriters through ASCAP and BMI, the webcasters have to pay "Performance Royalties" to the label/artist for the license to stream the music. Terrestial radio doen't have to pay performance royalties (unless they also stream their broadcast). Let's not forget the fact the the labels actually pay the terrestial stations to play their music. (through independent promoters, they would never actually do anything illegal)

      Where the RIAA and its member labels screwed up was in trying (and succeeding)to get performance royalites on streaming. Had they left that alone, and treated webcasting as "Internet Radio" and gone for royalies on downloading they wouldn't have half the problems they have now. (other than the accounting practices, the contracts and running up expenses artificially to assure the artist never recoups).

      How come everyone except the artist gets paid up front? Forget the advances, they go toward the recording, paying the producer, the engineer, etc.
  • and it was rejected THEN...! Why NOW is this news? It WAS news two days ago, but now it's STALE!
  • I'm confused by all of this. If the RIAA is pushing small webcasters away form RIAA music, won't that push them towards non-RIAA music? To me, that is a good thing. People need to stop trying to figure out how to co-exist with the RIAA and start figuring out how to get rid of the RIAA. Severe financial penalties for small RIAA puppet webcasters is a good thing.

    Why aren't people here taking the same line they take with open source software? If you aren't allowing free use and copying then WE SHOULD REJECT YOUR MUSIC TOTALLY. That means rejecting artists on all major labels. It means creating a community of non-RIAA artists and stations. The RIAA is the Microsoft of music, and it's JUST NOT ACCEPTABLE to like proprietary music. We need free music, just like we need free software.

    Why slashdotters posting links non-RIAA webcasters? Why aren't slashdotters creating music (I expect some of you are musicians) that is royalty free? Why aren't slashdotters creating web-sites to focus attention on free music? Why aren't slashdotter submitting stories about bands they like that create free music?

    The RIAA needs to be destroyed. RIAA supported musicians need to be destroyed. If your favorite musician is an RIAA musician, then YOU ARE THE PROBLEM.
  • Small webcasting is utterly insignificant to the music industry in real terms. Anybody in a college dorm could play music 12 hours a day to an average of 7 listeners. Small webcasting is two cans and a string. Why does the RIAA care? Don't ask. The RIAA is run by people who are so mindlessly greedy that it is *impossible* for normal people to understand how they think. It's useless to try. They simply want all the money in the world and will do anything in their power to collect it. If they could, the RIAA would send a surgeon to your house to implant a metering device in your head that would send them money every time you heard a musical note. The only reason they don't is that they can't, at least not yet.

    It's a waste of time to try to figure out the RIAA's motivation. Accept that they are insanely greedy and deal with their actions as insanity.
  • So what I get out of these articles, including today's interesting followup Register article [] is that convenience trumps good research and good data. Even though the foundation of these negotiations- the rate set by the head librarian- was based on flawed data, we should still use it. It would be inconvenient to restart. Congress can't handle working on an issue twice. And I suppose Congress really can't handle the idea of designing laws that require regular checkups and reviews to see if the original assumptions hold up.(1) Annoying but not surprising.

    At the start of all this, the librarian set the rates based on one Yahoo agreement. But Yahoo set these rates to shut out (kill off) smaller broadcasters. Marc Cuban admitted this, as was reported here. [] Yahoo admitted this to Congress- from
    this SJMercury article: []

    "David Mandelbrot, Yahoo's vice president of media and entertainment, testified before the Senate Judiciary Committee in May that the agreement had been misapplied ``to set excessive rates for an entire industry.''

    I've read nothing that implies that the head librarian has admitted that he used a flawed data source. Not to mention the inherent flaw of using just ONE sample point. Sure, sometimes you can use a single point for a decision "J likes this movie, so I'll see it." But basing rates that can strangle an entire ongoing industry on one sample? With your one sample being an obvious statistical outlier?

    Even in qualitative research you still make sure you have *representative* samples. But this shouldn't be qualitative. This is business. A sector of the economy, however new and small. For this you use quantitative data. For this you hire an econ graduate student and have them spend a couple of weeks gathering data... But ONE sample point??!?? For an entire industry??!?? (Visual of 10,000 Statistics lecturers snapping their chalk in disgust.)

    (1) i.e. remember the debates on reporting requirements and sunset provisions in the PATRIOT Act? Congress seemed to say that asking Congress to revisit and rewrite (or simply extend) the law 2 years later was an unusual request: better to just make it indefinite. The Executive Branch acted as if requiring reviews, updates and progress reports was tantamount to not wanting the law at all. And even the Supreme Court isn't immune, which would be bad news for the Eldred case and Lessig. The Scotus questioning implied that even if the extension is *wrong*, negating the extension could cause chaos. Wouldn't want the public domain and the Constitution to get in the way of Convenience, would we?

Thus spake the master programmer: "When a program is being tested, it is too late to make design changes." -- Geoffrey James, "The Tao of Programming"