California Webcasters Ask Congress to Save Internet Radio.

Entertainment Editors

LOS ANGELES--(ENTERTAINMENT WIRE)--April 22, 2002

Twenty Members of Congress today -- including four from California -- in response to an arbitration panel's recommendation of sound recording royalties for webcasters, urged the U.S. Library of Congress and the Copyright Office to ensure that the royalties do not devastate the webcast industry. Executives from seven California-based Internet radio companies asked the California Congressional delegation to support a fair royalty regime for Internet radio, as the current rate being proposed, webcasters say, would put them out of business.

"Representatives Lofgren, Honda, Lantos and Eshoo have taken a stand for webcasters today," said Val Starr of Choice Radio, "and more importantly they are supporting music-loving consumers in California who want to access diverse music and culture on the Internet."

The California webcasting community's revolt against the arbitrators' proposal has widespread support. Thousands of webcasters and consumers have recently appealed to the Congress and the Register of Copyrights, who is authorized to review (and possibly reject) the proposed royalty rate.

"The proposed fees would definitely put us out of business," said Bill Goldsmith, the owner of popular California adult rock station RadioParadise.com. "If that happens, everyone loses: our listeners, the artists we play, and the record labels themselves. We'd see two years of hard work and sacrifice go right down the drain."

"Webcasters want to pay royalties to recording artists," added David Landis, of Ultimate-80s. "But if super-high rates cause us to shut down, there will be no music, no royalties paid, and no money going to California recording artists."

Goldsmith cautions against believing the press releases from the record industry which try to portray the fees as being affordable. "If you do the math you'll see that not one webcaster -- large or small -- can cover these fees with their present levels of income."

Both the Los Angeles Times and the San Jose Mercury News have issued stinging editorials rejecting the proposal and urging the Register of Copyrights to adopt a more reasonable approach.

"Several members of Congress from California are on the House and Senate Judiciary Committees in Washington," said Choice Radio's Starr. "Hopefully, Senator Dianne Feinstein and Representative Howard Berman, who are senior members of those Committees, will feel our local industry's pain and recognize that the demise of small webcasters is bad for the Internet, bad for consumers and bad for recording artists."

"California is the birthplace of new media and a haven for cultural diversity," said Zack Zalon of Radio Free Virgin. "California lawmakers must support the independence, diversity and creativity that online radio represents. Furthermore, in the absence of legitimate entertainment options such as online radio, pirate services will flourish and deny artists the dues that we're all fighting for."