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By Scott Bradner
Network World, 04/29/02	

It is quite hard to figure out just what the U.S. Copyright Office thinks it's doing. On the surface, it looks like the office has capitulated to the greed-before-thinking copyright industry. But there may be more than meets the eye.

I'm sitting in my home office writing this on the morning of April 21 with some very good gospel music playing in the background. The music is coming from the Sunday morning gospel music show on the Plano, Texas country music radio station KHYI. I listen to KHYI a lot over the Web (www.khyi.com) - in my home office, but also at work. 

But I may not be able to a month from now. 

As yet another result of the Digital Millennium Copyright Act (perhaps called that because it will take a millennium to work out all the effects of the DMCA), Internet radio stations will soon have to pay royalty fees on the material they stream to listeners.

The U.S. Copyright Office (www.loc.gov/copyright), as the DMCA required, has put together a set of proposed royalty fees. On the surface, the proposed fees make no sense whatsoever, but maybe whoever it was that influenced the office has a logical plan. The office was clearly not influenced by the general U.S. population - you know, the folks that governments are supposed to protect. 

It's clear to me that artists should get paid for their work, even when it is being streamed over the Internet. So I don't have an issue with some set of fees. The problem here is the level of the fees and the blindness to the business reality of Internet radio. The proposed fees work out to 14 cents per song, per 100 listeners for Web-only broadcasters and half that for stations, like KHYI, which stream its regular over-the-air shows. 

Because I have KHYI streaming at home and at the office all the time (whether I'm there or not), having me as a listener would cost KHYI at least $200 per year ($.0007 x 15 (songs per hour) x 24 hours x 365 days x 2 + a 9% ephemeral fee). I am far from sure that KHYI's advertisers will be willing to pay enough to cover that fee because there is little chance that they could get me to buy enough stuff to make it worthwhile. The problem is far worse for small Internet-only stations, of which there are thousands - the proposed fees are far higher than their total budgets.

The only explanation I can come up with for the fees being so high and for being blind to the stations' budgets is that someone has been blinded by the lure of subscription-only services (which have never succeeded) and wants to be sure there is no competition. It is sad when the government becomes the mugging weapon used to kill something good.

Disclaimer: Conspiracy theories abound at Harvard, but I came up with this on my own.

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