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Webcasting Issues & the Reaction

If you have been following the reaction to the webcasting rates released by the Copyright Royalty Board, you have likely seen a lot of electronic and some print ink on the topic. Until now, what this blog, dedicated to College Broadcasters (and it will include more than just webcasting issues in the near future) has done is to outline the legal issues and implications with a selected amount of bias and no calls for action. This post will differ a little in that it will point out some areas of hardship for stations and make some suggestions, but that will not be the focus. Instead, I will focus on some of the finer points of the decision, clear some facts and discuss what might happen.

Channel/Station – This seems to a big issue for some of the webcasters. This will affect some Educational Stations, but how many? If you are an Educational Station with multiple streams that include copyrighted music, chime in and give us a head count.

Lost already? Here is the background. To be truthful, I haven’t followed the commercial side of things, but the bulk of the discussion on this issue concerns entities that offer “custom” streams based on user preferences and content aggregators, such as AOL. On the educational side, I will refer only to the SWSA settlement as almost no station that paid royalties opted to not participate in the SWSA settlement. The SWSA settlement allowed stations at an institution with 10,000 or more students to stream up to three “channels” (i.e. stations with different content) for the $500 fee. Stations at smaller schools could pay $250 for a single channel or $500 for up to three channels. Each of these situations put a cap of 146,000 ATH, per month. In short, this means that if you did not average over 200 concurrent listeners throughout any month (in total for all streams), you did not exceed the cap and were not liable for additional royalties.

The CRB decision seems to require $500 per channel, regardless of enrollment or combined ATH. Obviously, content aggregators and those who offer custom streams are upset with this decision/lack of clarity. Educational Stations that are now or may in the future offer additional streams  might also take exception with this provision of the CRB decision.

Avoid the Fees – Don’t Play RIAA

If it were only that easy! While there are many who say they will avoid the fees and “tune out” the RIAA, all but a few are mistaken or misguided. The applicable laws cover ALL copyrighted music, with the exception of some  work under the creative commons or other such license. Thus, playing only independent music will not remove the burdens associated with the statutory license. The only way to avoid paying the fees, etc. is to use only music under the creative commons license (or similar agreement) and/or to license the music directly from the copyright owners (which usually includes a record label).

Unless you are prepared to determine your playlists (and all music on the station) by these criteria and do all of requisite negotiations and maintain the paperwork, this isn’t a viable option.

$500 Minimum/218

Because I am involved on the legal side of the issue, I can’t go into detail, but it appears that there maybe some room above the 218 cap, but it is rather nominal, given the CRB rates, it is not worthy of a real discussion. If the rates “stick” and there are stations on the verge of breaking the cap, we can delve into this further.

Where, what and how to protest.

  • Back Fees – The law allows and prescribes the issue of retroactive fees. Because the laws and regulations covering fees expired 12/31/2005, stations that have paid fees since then have paid “placeholder” fees. In other words, if the rates went up, the stations would owe the difference for 2006. Since the rate determination was not rendered until 2007 the back fee issue applies. Since rates went up for most stations, they owe retroactive fees and they need to pay them within 60 days of the regulations becoming official.

Herein lies the problems. Many stations will owe back fees if the ruling stands, yet the fees owed will become due during summer break for many stations, when students are unable to deal with the issue of a prompt demand for payment. Most stations operate on a ZERO budget. In other words, they are allocated funding for an academic year and there is no carryover or contingency budget. If the station is required to pay the back fees in this academic year, it may not have the funds to do so. For most stations, this obligation will triple their royalty fee due to the catch up mechanism.

If the fees aren’t paid during the summer break, the regulations promulgated by the CRB allow for a late fee of 1.5% per month.

It should also be noted that a station would likely not have allocated the funding for the additional fees in 2006-7 or asked for the back fees to be covered in 2007-8. Yet if a station is not able to pay within the 60 day window and forced to pay in the 2007-8 fiscal year, it will need to pay even more fees. If your station is affected, this is one area that should be on your list of issues. Either the retroactive portion of the final rate determination should be dropped or stations should be allowed extra time to pay without penalty.

Finally, the basic problem here is that the sound recording fees (section 114) are set using a different rate setting standard than the musical works fees (section 118).

Bottom Line: Any protest should request, at minimum a rollback to the rates currently paid and a request to change the rate setting standard so that the standard is consistent with that used in what is paid under section 118.


I think the boat has sailed on this issue, but it has yet to reach its destination.  The amount of data required and the format of submission issues have been settled by the CRB, but that does not mean there are not additional avenues to pursue.  As we know, many of the educational stations currently webcasting will cease once the regulations become final or will eventually fall out of compliance due to the natural churn of students.   These issues need to be addressed in discussions with Congress and in any negotiations that may occur.   The content portion of the reports of use needs to be addressed.  ATH, in particular, is a real problem for stations.   There is also a reality check that needs to be addressed.  A station with an ATH of under 20 is likely to generate milicent revenues for the copyright holders and more importantly the artists.  At this pace it would take years for the performers to receive the minimum distribution of $10 even when stations playlists/reports are aggregated.  Only the top performers are likely to ever receive a check.Frequency – The requirement to submit 4x per year is onerous, burdensome and likely to yield 0 results when certain stations are off the air.  Any reports should be limited in duration and occur only once a year, perhaps on a rotating basis.

One more note, the regulations permit stations to submit a report of use with headers, but is not required to do so and the headers do not alleviate the station from the need to submit the redundant information in each line of the report of use. A protest call to Congress might include a request to alleviate stations from the need to report redundant information on every line when that information is included in the header.

Bottom line, if you are going to protest, request that the recordkeeping and reports of use requirements be set no higher than those required under section 118, which is what most stations report to BMI. This is the most reasonable outcome possible for stations as they prepare to implement requirements which will eventually become an expected part of their service.


The Perform Act contains many provisions that are extremely problematic for Educational Stations. One of the key issues would prevent the use of MP3 streaming because it lacks Digital Rights Management (DRM). The bill also hopes to level the playing field by changing the rate determination standard, limiting recording options and many other issues that would have a negative effect on stations. Perhaps the most detrimental effect would the creation of a fair market value for recordings which could require broadcast stations to start paying sound recording royalties. While some in the commercial webcaster field want this, they either don’t care or are unaware of the effect on Educational Stations if this were to happen. While I don’t oppose artists being compensated for their work, for reasons I won’t delineate in this overly long post, this is not appropriate for Educational Broadcast stations.

I will end this lengthy post with the following two items…

If you are going to protest, I would suggest that you protest

Minimum Fee –

Too high

Should include multiple stations/channels

Should not be retroactive

Recordkeeping/Reports of Use

Remove the ATH requirement

Only require Educational Stations to report 1 week per year, as per section 118

Perform Act

The perform act will remove a cost effective means of otherwise viable stations from webcasting and limit others in their means to access an audience with underexposed artists.

Don’t impose new royalties on Broadcast Educational Stations

This will further limit the market of the small non-commercial bastions of free expression and artists exposure.


There are a number of pages devoted to protesting the CRB decision. While not comprehensive, the site lists a number of resources. If you do decide to protest, think about asking your representatives and your membership organizations to protest the issues important to you. I hope the above gives you something to think about and if you want more information on any topic, post it here.

Protest Central?

There are many different levels for protest. The first is for the participants to file a request for a rehearing. The discussions of whether or not that will happen are being held. The next level is for those participants to file an appeal. The participants will need to await the outcome of the request for rehearing before they can file an appeal. There is a possibility for a change to the rate determination to come from within the office of the Librarian of Congress.

I think the biggest problem webcasters, in general, face is the lack of a central place for them to concentrate their efforts. Perhaps there is a discussion forum already in existence or being formed, but the folks in charge of the protest cites need to work together in order to develop a cohesive message.

A list was formed and highly active after webcaster I. Due to the divisions within webcasters, I highly doubt a recurrence of that form of interactivity will occur again, particularly since many of the participants of that list we disenfranchised by the outcome, the SWSA.

Will R


March 13, 2007 Posted by | Display Requirements, Rates, Recordkeeping, Reports of Use, Webcasting | 2 Comments

Sound Recording Performance Complement

One of the many requirements of webcasters is that they don’t exceed the Sound Recording Performance Complement, which is specified in 17 USC 114 (j)(13) .

Here, the law states, “The “sound recording performance complement” is the transmission during any 3-hour period, on a particular channel used by a transmitting entity, of no more than–


3 different selections of sound recordings from any one phonorecord lawfully distributed for public performance or sale in the United States, if no more than 2 such selections are transmitted consecutively; or


4 different selections of sound recordings–


by the same featured recording artist; or


from any set or compilation of phonorecords lawfully distributed together as a unit for public performance or sale in the United States, if no more than three such selections are transmitted consecutively:Provided, That the transmission of selections in excess of the numerical limits provided for in clauses (A) and (B) from multiple phonorecords shall nonetheless qualify as a sound recording performance complement if the programming of the multiple phonorecords was not willfully intended to avoid the numerical limitations prescribed in such clauses.”

March 11, 2007 Posted by | Sound Recording Performance Complement | Leave a comment

Display Requirements

All webcasters, according to law, are required to abide by certain requirements and prohibitions in order to qualify for the statutory license to webcast. Those requirements include, among others, paying the royalty, submitting reports of use, not exceeding the Sound Recording Performance Compliment (covered in another section), and the display of certain information concerning each song. Failure to follow these requirements prohibits a station from the use of the statutory license. If a station is prohibited from using the statutory license, it must secure agreements from each and every rights holder to a sound recording before transmitting it on the Internet (or other means of digital transmission, other than via broadcast).

For the purposes of this entry, we will only discuss display requirements.

17 USC 114 (d)(2)(c)(ix) specifies that “the transmitting entity identifies in textual data the sound recording during, but not before, the time it is performed, including the title of the sound recording, the title of the phonorecord embodying such sound recording, if any, and the featured recording artist, in a manner to permit it to be displayed to the transmission recipient by the device or technology intended for receiving the service provided by the transmitting entity”.

In summary, you are required to display the artist, song title and album (if any), for each song.

March 11, 2007 Posted by | Display Requirements | 1 Comment

Reports of Use for Webcasters

The terms “Reports of Use” and “Recordkeeping” are used freely among those intimately familiar with the rules concerning webcasting. In loose terms, recordkeeping refers to the data that a station needs to obtain/maintain/ and retain concerning the songs it plays in order to submit a report of use. Another facet to this topic is the format and method of delivery of the reports of use. The regulations specify that the data must be maintained for three years.


Federal law requires webcasters to submit a report of use. In other words, webcasters need to submit data concerning songs they webcast in order to distribute the royalties collected. The amount of data, the means of submission and the format of reports was left to the Copyright Office to determine. It has taken years to reach a final outcome. This post is intended to delineate the requirements for stations. Following that will be a summary of the process that led to the conclusion.

There are two links that offer some concrete information concerning the required data, the format of the reports and delivery methods. The first link, Reports of Use Summary, provides a list of the required elements, the delivery format and methods of delivery along with other important details. Alternatively, you can read the CRB ruling or the SoundExchange “guide”.

The second link provides an informative example concerning the format of reports, using the SoundExchange Excel template. The regulations require SoundExchange to post a Corel version of the Excel document, but that is not currently provided by SoundExchange.

Submission of Reports.

There is a rich history concerning the reports of use. I will forgo most of the history here. The primary question that is of interest to college stations is when the reports are due and what period needs to covered.

Due to the rich history, there are some quirks here. Educational Stations that opted into the SWSA settlement were not required to submit reports of use or retain data while that settlement was in effect, instead they paid a fee. Due to the quirky way things worked, that settlement expired 12/31/2005. As of that date, stations became responsible for maintaining data for the reports of use even though most were not aware of the requirement AND SoundExchange continued to collect a data fee.  Further there was not a recognized means of submitting those reports until the CRB issued a decision on the format and delivery of the reports on October 6, 2006. The report and two subsequent events offered some interesting thoughts on what that means to Educational Stations.

First, the decision did not include a due date for reports of use. So even though the issues of the required elements, the format and means of delivery (among others) had finally been resolved, the regulations failed to include a due date for the reports of use. Second, SoundExchange sent a letter to many Educational Stations informing them of their requirement to submit reports of use. That letter specified that the requirement was retroactive to 2004. While there is an extremely small group of Educational Stations (less than 10) that this applies to, the letter was sent to stations where this did requirement did not apply. Third, SoundExchange General Counsel appeared at a CBI conference panel and essentially said, get us what back data you have, but be more concerned with compliance from this point forward. Interestingly, that person is no longer an employee of SoundExchange.

The bottom line here is that you are required to do the recordkeeping and submit reports of use, but there is currently no deadline for the submission of those reports. On the other hand, it would be dangerous to take the lack of a current deadline to mean that you don’t need to be prepared to submit the reports when a deadline is announced.  It is also important to note that there are efforts to reverse the need to submit reports of use, but you should weigh carefully your options as the outcome is unpredictable.

March 10, 2007 Posted by | Recordkeeping, Reports of Use | Leave a comment