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RIAA Wins In Net Radio Dispute

The record industry has scored a win with the U.S. Copyright Office, which published a ruling Monday that radio broadcasters are not exempt from licensing royalties when they simulcast their programs on the Internet.

The decision, published in the Federal Register on Monday, was cheered by Webcasters. They sided with the Recording Industry Association of America as part of their crusade to clarify what they say are gray areas of copyright law, which are impeding their efforts to provide entertainment on the Web.

“We are gratified the U.S. Copyright Office agreed with our position. They reached the right conclusion as a matter of law and sensible policy,” said Hilary Rosen, chief executive of the RIAA, which represents major record labels BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Universal Music Group and Warner Music Group.

“This is an important right for artists and record companies. We look forward to working with the broadcasters for a smooth transition into this marketplace,” she added.

The ruling could potentially affect millions of dollars in licensing fees, according to industry sources. Rates will be determined sometime in 2001.

The decision related to whether the Copyright Office would extend an exemption-allowing radio stations to broadcast entertainment without paying royalty fees-to the Internet.

In March, the National Association of Broadcasters (NAB) filed a suit against the RIAA insisting that broadcasters should not be subject to paying royalties for their Internet simulcasts.

The NAB was not immediately available for comment, but in the past has said that broadcasters would suffer “substantial hardship” if forced to pay royalties to artists and producers for streaming their programming.

The Copyright Office’s review of the matter came at the urging of the RIAA and Digital Media Association (DiMA), an alliance of 75 digital media companies including Amazon.com.

Jonathan Potter, executive director of DiMA, said the decision was a boon for Webcasters.

“It’s now a level playing field between radio broadcasters and Webcasters at least with respect to the Web,” Potter said.

The Copyright Office on Friday issued another ruling relating to a dispute in the marketplace between Webcasters and record companies about whether some types of personalized radio falls under the category of interactive services.

Earlier this year, DiMA petitioned the Copyright Office to initiate a rule on the licensing status of consumer-influenced music programming over the Internet. In its petition, DiMA sought a declaration that “consumer-influenced” Webcasts qualify for statutory compulsory licenses rather than individual licenses.

The Copyright Office declined to initiate a rule making proceeding, according to Steven Marks, senior vice president of business affairs for the RIAA.

“The Copyright Office has agreed with us that the marketplace is the proper forum to address licensing issues regarding personalized radio,” he said.

Potter, however, and other digital media companies asserted the decision was a victory for Webcasters because the Copyright Office acknowledged that certain consumer-influenced Webcasting falls within the statutory licensing requirements.

According to one Webcasting executive: “This was a bigger win that we even hoped for because the Copyright Office said there was no need for rule making because these services already are considered eligible for the compulsory or statutory licenses.”

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