Musings from The Software Underground

In a move that will only benefit the big record labels and further kill any chance of competition, Congress decided to hike the royalty rates for internet radio.

This month, a three-judge panel created by Congress to set digital music royalty rates decided on a big increase, retroactive to 2006, for companies that stream music over the Internet. The increase will apply not only to small broadcasters like Kaup, but also to major companies like Yahoo Inc. or Time Warner Inc.'s AOL and to Internet "simulcasts" of traditional over-the-air radio stations, which could see their royalty payments increase by millions of dollars under the new scheme. -- The Boston Globe

Want a real-world example? Here's what will happen to Soma FM, a small steamer available in the iTunes Radio Alt/Modern Rock list:

The Copyright Royalty Board has announced new copyright licensing fees for internet radio stations. The new fees are a staggering increase over our previous annual royalty rate of about $22,000 to over $600,000 for 2006. And the fees are even higher in 2007, based on our current listenership, they'll be over $1 million dollars for 2007! (Which is 3-4 times what we hope to raise in 2007). -- Soma FM

What you're seeing is essentially 3 guys, probably on the dole from record labels, essentially putting internet radio out of business. This is your government working for you... if you're a large, rich record company with a sagging business model that is. The only hope is to do what Soma FM suggests, write your rep in Congress using their provided link:

If you think this is unfair to internet radio, and you are an American citizen, you can send a letter to your congressman showing your support for internet radio. We already have the attention of Congress, so now you have to let them know you support internet radio and that royalty rates shouldn't be structured in a way that will put small webcasters out of business.