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Last Updated: Tuesday, 26 June 2007, 10:20 GMT 11:20 UK
'Day of silence' for US web radio
Computer on standby
Some believe the decision could be the end of US web radio
Web radio broadcasters across the US will hold a "day of silence" on Tuesday in protest at plans to hike royalty payments when music is played online.

The plan - due to come into force on 15 July - could cost webcasters around $1bn in additional administration fees, protesters claim.

The protest is being organised by the SaveNetRadio Coalition, whose members include Yahoo, Viacom and RealNetworks.

It is hoping the day will raise public awareness of the issue.

Bankrupt industry

The decision to impose the fees was made by a panel of judges who threw out requests to overturn an earlier ruling.

The sharp rises in royalty fees could be "fatal" to the nascent industry, a coalition of web broadcasters has claimed.

"These proposals will bankrupt the industry," Jake Ward, a spokesman for the SaveNetRadio Coalition told the Reuters news agency.

The increases could represent a 300% rise in current payments and the plan is to eventually charge royalties every time an online listener hears a song.

Public and commercial broadcasters claim the decision will force cuts to services used by an estimated 50 million people.

The decision to increase fees was made by the Copyright Royalty Board (CRB) which reviewed an earlier decision to increase royalty fees collected from web broadcasters.

Kim Roberts Hedgpeth of the American Federation of Television and Radio Artists (AFTRA) said the new payments rewarded the "creativity, talent and hard work" of musicians.

But a broad coalition of internet broadcasters, headed by the US broadcaster National Public Radio (NPR) and including Yahoo and AOL, objected to the increases.

Online radio stations offer hundreds of music choices

Show must go on

The copyright judges on the board said that they had not shown any new evidence which would influence their original decision.

The CRB wrote at the time: "Most of the parties' arguments in support of a rehearing or reconsideration merely restate arguments that were made or evidence that was presented during the proceeding."

The new fees, which will apply until 2010, will charge a flat fee per-song, per-user in addition to a $500 fee for every channel owned by a station. Fees will increase every year until 2010.

Radio stations with multiple channels, such as NPR, would be charged thousands of dollars. Previously, stations paid an annual fee plus 12% of their profits.

The fees will be collected retrospectively for 2006. Webcasters will be allowed to calculate retrospective payments by averaging listening hours.

Pricing internet radio off the air in the US is clearly a retrograde step
Felix Miller

Not all web radio stations are convinced that a day of silence is the best response to the issue.

"We don't want to punish our users and the show must go on," said a spokesman for Last.fm, a UK-based web radio station, which is not taking part in the protest.

"We have sympathy for the issue but we are a global operator. The idea of introducing fees has been mooted in the UK but nobody is talking about a similar protest here. We may well treat it differently," he said.

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