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Copyright Board Suggests Higher Fees for Internet Radio

During a hearing before the House of Representatives Committee on Energy and Commerce, Subcommittee on Telecommunications and the Internet yesterday, a key Democrat Rep. slammed a ruling released Tuesday by the U.S. Copyright Royalty Board.

Rep. Edward Markey said the ruling, which proposes raising the amount that commercial internet radio services pay to record companies by 30 percent, creates a further imbalance between what different radio industries pay, writes CNET News.com.

The CRB’s decision puts webcasters in peril because it widens the gap between what internet and satellite radio services must pay, said RealNetworks general counsel Robert Kimball. Kimball was also speaking for the Digital Media Association, whose members include Amazon.com, Apple, Microsoft and MP3.com.

The CRB’s proposed new rules are subject to appeal.

Kimball also suggested that the proposed merger between XM and Sirius be put on hold until the Copyright Act’s “bias against the internet” is corrected, which would allow internet radio companies to more successfully compete with satellite radio.

The proposed merger was the subject of a large part of the hearing. Several politicians on the committee plan to scrutinize the proposed deal for potential conflicts of public interest, but Sirius’s Mel Karmazin argued that the merger would offer more programming choices while maintaining current prices. He pointed out that listeners could receive both services on a single receiver. The combined company would also offer the option of purchasing smaller groups of channels for a lower price. On the other hand, if a consumer wished to purchase both services, the price would be higher than the current $12.95 per month for a single service.

A webcast of the entire hearing can be downloaded here.

The FCC and the U.S. Department of Justice will ultimately decide whether the merger will be allowed to go through. FCC chairman Kevin Martin has said publicly that the companies have high hurdles to jump in order to receive approval. The Senate Judiciary Committee has scheduled a hearing on the matter for March 20.