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US Members of Congress
Wednesday, July 10, 2002
Washington, D.C.

Library of Congress Decision Setting Performance Royalty Rates for Use of Music on the Internet condemned by United Group of Webcasters

We respectfully submit this petition on behalf of the undersigned group of small, independent webcasters, asking for your help in averting the impending collapse of much of the Internet webcasting business. Each of the undersigned companies operates an Internet Radio station with a significant listening audience. These companies provide outlets for public expression and add diversity to the media landscape, but the continued existence of each of these companies is threatened by a recent decision of the Library of Congress setting rates for the royalties to be paid to copyright holders for the use of music on the Internet. The undersigned companies are fairly representative of the vast majority of Internet Radio stations, yet no one has been standing up for their interests that are imperiled by the recent rate setting decision. Thus, this coalition of small webcasters was born.

The Library of Congress determination that established this royalty rate used a “willing buyer and willing seller” standard based on ONE agreement between a very large webcaster and the recording industry. Using one agreement involving a company not representative of the majority of webcasters to set a standard for an entire industry is, in and of itself, an arbitrary decision and bad public policy. Even worse, recent reports quote a former executive of that company as stating that the rate was purposely set at an artificially high value to force small webcasters, like those signed below, out of business. That is exactly the effect that this decision is already producing. Although this rate is not effective until September 2002, 100’s of Internet Radio webcasters are already in the process of closing down their streams or have stopped streaming altogether. If this decision is not changed, the process will continue; small independent companies will be driven from the webcasting business and the few large companies that can afford the high rates will dominate the webcasting industry. In this period of rapid media consolidation, it would be terrible to effectively exclude small businesses from the one arena that offers so much promise for the flowering of diversity and free expression.

What made the process even more unfair is that small companies like those below were effectively excluded from participating in the process that determined these rates, due to the extremely high financial commitment required. The rules governing the arbitration process that arrived at these rates required that participants pay a share of the arbitrators’ fees, which exceeded $1,000,000. Small webcasters simply could not afford those fees, much less the cost of the attorneys necessary to try a case that went on for almost six months. Thus, the process to set a rate governing a vast, growing industry was arrived at by representatives of only a few very large companies – companies having different interests than those of the small independent webcasters. Having private interests set public policy in a forum that excludes the majority of those affected is not in the public interest. The process needs to be based on standards that require arbitrators to set a “fair” royalty rate that considers public interest and balances copyright owners and user interests. This process was not, and threatens the existence of hundreds of webcasters.

The decision that brought about these closings has to be fixed or the trickle of webcasters turning off their signals will become a torrent of bankruptcies, lost jobs, reduced demand for broadband, and more importantly, less opportunity for smaller artists and fewer choices for music listeners on the Internet. Congress must take a position on this, and do it quickly, or they will be partially responsible for the worst loss of Internet related businesses since the dot.com bubble burst two years ago.

This coalition asks that Congress act as soon as possible to accomplish the following things:

1. Immediately stay this Library of Congress decision.
This decision was based on ONE “willing buyer, willing seller” agreement between the RIAA and Yahoo!; an agreement reportedly designed to monopolize the Internet Radio industry by creating an inflated copyright market value that would force small webcasters out of the business of self-streaming. Even 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”. If this rate goes into effect as scheduled in September, hundreds of small webcasters will be driven out of business. Thus, Congress must stay the effect of this decision immediately.

2. Restructure the CARP process to ensure that future Copyright decisions accurately reflect “fair market value” for copyrights.
A. Small businesses must be allowed to participate in any future CARP negotiations without the exorbitant cost of paying the arbitrators’ fees. Copyright decisions affect far more than just big corporations and the process must ensure that small independent businesses can participate to protect their interests.
B. The rate-setting standard must be changed from the current “willing buyer/willing seller” basis, which set such a horrendous precedent with the recent CARP, back to the previous “Fairness” standard that requires arbitrators to set a “fair” royalty rate that considers public interest and balances copyright owners and user interests.
C. The process must be changed so that one organization cannot have enough veto power to stop anyone else from participating.
D. The Register of Copyrights must adhere to the Regulatory Flexibility Act so that the burdens on small business are considered when the Register acts in its regulatory capacity when setting recordkeeping rules and in future rate-setting cases.
E. In that the next CARP convenes in less than 2 months, Congress must act immediately to restructure the CARP process to ensure that none of the problems incurred in the recent CARP will take place in the next negotiation.

As webcasting is an entirely new industry, we understand the problems inherent in establishing a “fair market value” for sound recording royalty rates. However, because of the above problems with the recent CARP procedure, we ask Congress to intervene to stop the implementation of the Library’s decision immediately. Only with Congressional help will small webcasters get a legitimate and fair chance to survive and compete with large commercial webcasters.

The undersigned webcasters would appreciate any opportunity to discuss these concerns with you or your staff.
(For more information including a list of Internet Radio stations already closed down, visit http://www.kurthanson.com.)

3WK L.L.C.
Jim and Wanda Atkinson, Owners
www.3wk.com
jim@3wk.com, wanda@3wk.com
St. Louis, Missouri

'70s Rock Stream
John Boswell, Creator
www.jboz.com
jboz@thecity.net
Fort Scott, Kansas

8BallRadio
Scott Parent & Brian Brodeur, Co-Founders
www.8ballradio.com
admin@8ballradio.com
Santa Barbara, California

All Bass Radio
Scott Jamar, Owner/Operator
http://www.allbassradio.com
scott@visionstart.com
Lafayette, California

The Aloha Radio Network®
Joe Seiter AKA Aloha JOE®, President and CEO
www.alohajoe.com
alohajoe@alohajoe.com
Lakewood, California

Aritaur Communications, Inc.
Jennifer Lane, Director
www.mvyradio.com
jlane@mvyradio.com
Vineyard Haven, Massachusetts

Atlanta Blue Sky
Michael Monahan, Owner and Operator
www.atlantabluesky.com
mmonahan@atlantabluesky.com
Virginia Beach, Virginia

AtomicPlus, LLC/LuxuriaMusic, LLC
Cliff Chase,CEO
www.luxuriamusic.com
cliff.chase@luxuriamusic.com
San Francisco, California

Beethoven.com
Kevin Shively, Director of Interactive Media
www.beethoven.com
kshively@beethoven.com
Hartford, Connecticut

Blue IceWater Radio
Debora Panebianco, Broadcaster
www.blueicewater.cjb.net
blu4u@attbi.com
Portsmouth, New Hampshire

Boomer Radio
Ron Rubin, President and CEO
www.boomerradio.com
rrubin@boomerradio.com
Boalsburg, Pennsylvania

bumpNgrind Records & Radio
Cookie Holley, Founder
http://bumpNgrindRecords.com
cookieholley@tymewyse.com
Tiller, Oregon

Chemlab Radio
Steve Kondik, Owner/Operator
http://chemlab.org
info@chemlab.org
Pittsburgh, Pennsylvania

Chronix Radio
Rochelle Lozensky, Founder
www.chronixradio.com
rockie@chronixradio.com
Denver, Colorado

CIM Radio Smooth Jazz
Steve Lee, Founder/President
www.cimradio.com
steve@cimradio.com
New York City, New York

Classical Music Detroit, L.L.C
Robert F. Ottaway, Founder
www.ClassicalMusicDetroit.com
bobottaway4@comcast.net
Detroit, Michigan

CLICKRadio
Vince Vielhaber, CEO
www.clickradio.net
vev@clickradio.net
Oxford, Michigan

CMRadio Networks
George Motter, President and CEO
www.CMRadio.Net
george@cmradio.net
Nazareth, Pennsylvania

CRC Radio, Inc.
Christopher J. Veile, Webcasting Director
www.hardrockin80s.com
http://crcradio.net
http://extremerockonline.com
chrisv@crcradio.com
Broadcast location: Moberly, Missouri
Corp. Office: Chicago, Illinois

CyberRadio2000.com
Salvatore Lepore, George Halstead
www.cyberradio2000.com
sal@cyberradio2000.com
george@cyberradio2000.com
Chicago, Illinois

DainBramage Radio Network
James Evans, President
www.dainbramage.com
jrevans@dainbramage.com
Apex, North Carolina

DH NetRadio
Mark Douglas, CEO/Producer
www.madawg.net
dhnetradio@madawg.net
Greenville, South Carolina

Digger's House of Tunes
Dennis G. Cheng, MPH, Keeper of the Tunes
www.chengdigger.com
frickyfricky@hotmail.com
Dunmore, Pennsylvania

Flaresound Internet Radio
Jeff Carter
http://flaresound.com
flaresite@yahoo.com
San Francisco, California

HardRadio®
Tracy Barnes, Founder and President
www.hardradio.com
prez@hardradio.com
Rowlett, Texas

Houndogradio
Frank Coon, Owner
www.houndogradio.com
frankcoon@houndogradio.com
Stone Mountain, Georgia

iM Networks, Inc.
Mary McCann, VP Radio
www.imnetworks.com
bone@imnetworks.com
Mountain View, California

Inetprogramming Incorporated
Robert Pullman, President
http://inetprogramming.com
pullman@pullman.net
Renton, Washington

Internet Radio Hawaii
Robert "Rabbett" Abbett, Owner/Operator
www.internetradiohawaii.org
rabbett@irh.com
Kailua, Hawai`i

Internet Radio Inc.
Val Starr, President
www.choiceradio.com
www.alldanzradio.com
valstarr@pacbell.net
Dallas, Texas

I-TRACS
Tim Shriver, Owner/Operator
www.trsweather.com/itracs
trsbbs@tds.net
Waunakee, Wisconsin

KPIG
Bill Goldsmith, Online Operations Manager
www.kpig.com
bill@kpig.com
Santa Cruz County, California

KTOZ-AM
R. R. Johnson, G.M.
www.ktozam.com
ktozam@pcis.net
Springfield, Missouri

KXCD.COM
Jeremy Preece, Owner
www.kxcd.com
kxcd@yahoo.com
Sacramento, California

Limbik Frequencies
James J Brust, Owner/Operator
http://radio.limbiksys.org
jamesj@limbiksys.org
Milwaukee, Wisconsin

LV Rocks - Noise From Vegas
Jimmy Diggs, Station Manager
www.lvrocks.com
diggs@lvrocks.com
Las Vegas, Nevada

MEDIAmazing.com
Henry Callie, Co-founder
www.MEDIAmazing.com
henrycallie@hotmail.com
Nazareth, Pennsylvania

The Megarock Network
Robert Winkelmann, Founder & Operator
www.megarock-radio.com
megarock@megarock-radio.com
St. Louis, Missouri

MIBN
Dan Morgan - CEO
www.mibn1.com/
dan@mibn1.com
West Branch, Michigan

NewOrleansRadio.com
Mark D. Glynn, President
www.neworleansradio.com
info@neworleansradio.com
Metairie, Louisiana

Niftywerks Inc.
Ennis Glendon, President
http://F188.com
ennis@niftywerks.com
Boston, Massachusetts

Owndog’s Musical Journey
Allen Rehmann
www.owndogsmusicaljourney.com
owndog52@owndogsmusicaljourney.com

Pacific Internet Broadcast Svs. (Hawaiian Hits.com)
LD Reynolds, President and Owner
www.hawaiianhits.com
ld@hawaiianhits.com
Kihei, Hawai`i

ParaDynamic Roadhouse
Steven Hartmann, Program Director
www.paradynamic.com
shartman@paradynamic.com
Eden Prairie, Minnesota

Progged Radio
Chan Weinmeister, Owner
www.proggedradio.com
chanweinmeister@cox.net
Bellevue, Nebraska

Radioalbany.com
Joseph D. Condon, Owner
www.Radioalbany.com
joecondon@radioalbany.com
Albany, New York

Radio Free Akron
Christopher Jirka, Owner
www.RadioFreeAkron.com
chris@radiofreeakron.com
Munroe Falls, Ohio

Radioio
Mike Roe, Owner
www.radioio.com
mike@radioio.com
Jacksonville, Florida

RadioMaxMusic
Ron Kovacs, Owner/Program Director
www.radiomaxmusic.com
kovacs@radiomaxmusic.com
Flemington, New Jersey

RadioParadise
Bill Goldsmith, Owner
www.radioparadise.com
bill@radioparadise.com
Butte County, California

Radiopoly.Com
John Schneider, Founder/President
www.radiopoly.com
schneider@radiopoly.com
Danbury, Connecticut

Radiostorm.com, Inc.
Michael Donahue
www.radiostorm.com
mjd@radiostorm.com
Sudbury, Massachusetts

RCN Radio Networks, Inc.
Chris J. Popp, CEO/GM
www.rcnradio.net
cpopp@rcnradio.net
Madison, Wisconsin

Reign Radio
Shane Stanton, President
www.reignradio.com
sstanton@reignradio.com
Daytona Beach, Florida

Riff Radio
Dan Simons, Owner
www.hardrocksociety.com
mmd@hardrocksociety.com
Fargo, North Dakota

The Rock FM
Jeffrey Franklin Bottoms, Site/Station Owner
www.TheRockFM.com
manager@therockfm.com
Houston, Texas

Savage Rock Radio
Gene Savage, Co-owner
www.savagerockradio.com
savage@aidan.net
Tulsa, Oklahoma

Sea-Comm Media
Max Deutsch
www.937thebone.com
www.jammin999.com
www.surf107.com
maxdut@sea-comm.com
Wilmington, North Carolina

South Central Oklahoma Christian Broadcasting Inc.
Rick Cody, Operations Manager
www.thegospelstation.com
email@thegospelstation.com
Ada, Oklahoma

Spacial*Audio Solutions
Bryan Payne, CEO/Managing Partner
www.audiorealm.com
bryan@audiorealm.com
Lubbock, Texas

StreamingSoundtracks.com
Eric Thornton, Owner
streamingsoundtracks.com
morglum@streamingsoundtracks.com
Ashland, Virginia

theKompany.com (Progrock.com)
Shawn Miles Gordon, President
www.progrock.com
shawn@thekompany.com
Rancho Santa Margarita, California

Twangcast
Mike Hays & R W Shamy Jr, Owners
www.TwangCast.com
mike@twangcast.com
Orange, Virginia

Ultimate 80s
Dave Landis, Founder
www.ultimate-80s.com
dlandis@ultimate-80s.com
Los Angeles, California

WebMedia Consulting, Inc. (Digitally Imported Radio)
G. Ari Shohat, President
www.digitallyimported.com
ari@di.fm
Staten Island, New York

Weirdsville! WebRadio
Erik Amlee, Big Kahuna
www.weirdsville.com
weird@weirdsville.com
Northampton, Massachusetts

WFMU / Auricle Communications
Ken Freedman, Station Manager
http://wfmu.org
ken@wfmu.org
Jersey City, New Jersey

whereveRadio.com
Tom Mondell, Owner & Founder
www.whereveRadio.com
mondell@whereveradio.com
Ellwood City, Pennsylvania

WOBC 91.5 FM
Neil Freeman, Station Manager
www.oberlin.edu/~WOBC
wobc@oberlin.edu
Oberlin, Ohio

Wolf FM
Steve Wolf, Owner
www.wolffm.com
steve@wolffm.com
Nashville, Tennessee

WOXY - 97X
Bryan Jay Miller, Director of Internet Development
www.woxy.com/
97x@woxy.com
Oxford, Ohio

XTC Radio
Grady (Zero) Nelson, Founder
www.xtcradio.com
gradyzero@xtcradio.com
Atlanta, Georgia

Zero Art Radio
Tate Anthony Eskew, Station Manager
www.zeroartradio.com
music@zeroartradio.com
Chicago, Illinois

Zwarp Hard Rock/Genocide Radio
Thomas Lane, News Director/Promotions
www.zwarp.com
tom@zwarp.com
Detroit, Michigan

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