Rep. Chris Shays (CT) Says to Kill Internet Radio

Congressman Christopher Shays
Fourth District, Connecticut
1126 Longworth Building
Washington, DC 20515-0704
.(JavaScript must be enabled to view this email address)
www.house.gov/shays


Dear Christopher,
Thank you for your letter dated May 8, 2002 in response to my fax opposing the current recommendation of the Copyright Arbitration Royalty Panel (CARP) to implement compulsory license rates for public performance by digital transmission.

It is quite clear from your letter that you do not have a complete grasp of the issues involved or of the facts of the matter. The facts are quite easy to find on the Internet and I'm disappointed that my congressperson's staff didn't bother to check them before preparing the response to my fax.

You wrote, "On February 20, the CARP recommended a performance fee of $0.14 per performance and a short-lived license fee of nine percent." You are wrong. The CARP recommended a performance fee of 0.14 per performance PER LISTENER (vs. .07¢ per song for commercial radio station simulcasts, and .02 per song for noncommercial radio simulcasts) with royalties due retroactively to October 1998.

Here's how the 14/100 of a cent per performance royalty rate would translate for a webcaster with 500 listeners per day: 500 listeners x .0014 dollars x 15 songs per hour x 24 hours = $250 per day or $90,000 per year, retroactive to 1998. Between the exorbitant fee and the paperwork requirements, most, if not all, webcasters will be forced to shut down. Is this your goal? Even the recording industry was not asking for this much money - the RIAA asked for fifteen percent of revenue (which is twice as high as what commercial radio stations pay).

I am not saying webcasters should not pay royalties. I am saying webcasters should be subject to the same formulas based on percentages as commercial radio.

You wrote, "In its report, the CARP concluded the impact of Internet webcasting on record sales is indeterminate. Webcasters argue their medium, like radio broadcasts, contributes positively to artist exposure and sales." I do not know the statistics - nobody does - but based on my experience, I would tend to agree with the Webcasters' position because I've purchased numerous CDs that I never would have bought otherwise just because I heard the artist on Internet radio. Internet radio is a supportive medium for independent artists, unlike commercial radio. If you really do support the arts, as you claim on your website, then you should be vociferously opposing the death of Internet radio.

You wrote, "For its own good, the industry [recording industry] should embrace business models based on electronic distribution. The approach that eventually succeeds will have to be built on the principle of respect for the rights of artists, producers, broadcasters and consumers." Your position on the CARP recommendations makes it clear that you have not considered the impact of this ruling on the rights of artists, webcasters, or consumers - only commercial producers and commercial broadcasters. I suspect you have more constituents who are artists and consumers than are members of the Recording Industry Association of America (has the RIAA made contributions to your campaign?)

I was extremely disappointed that your signature was not included on the letter several of your colleagues sent to The Librarian of Congress expressing their concern over the unreasonably high rates proposed by the CARP. If you have not seen this document, you can view it here: http://www.kurthanson.com/congress_letters_images.htm.

Unless you can explain your positions based on facts, and demonstrate more concern for your constituents than the interests of the recording industry, I will not be voting for you again.

Sincerely,
Lee Fleming
[address omitted]
Norwalk, CT

cc: neurotwitch
Kurt Hanson RAIN: Radio And Internet Newsletter

COPY OF SHAYS'S LETTER TO ME:

May 8, 2002

Lee Fleming
[Address Omitted]
Norwalk, CT

Dear Lee,

Thank you for your fax expressing opposition to a recommendation by a Copyright Arbitration Royalty Panel(CARP) to implement compulsory license rates for public performances by digital transmission. I appreciate your taking the time to share your views.

I fee the process Internet radio broadcasters went through is fair to all interested parties. On February 20, the CARP recommended a performance fee of $0.14 per performance and a short-lived license fee of nine percent. This decision essentially splits the difference between what the Recording Industry Association of America and Internet broadcasters were seeking. The Librarian of Congress now has until May 21 to either accept or reject the CARP's recommendation.

The CARP also recommended a performance fee of $0.07 for Internet retransmission of over-the-air AM or FM radio broadcasts, and a performance fee of $0.02 for noncommercial broadcasters who use a webcast. In its report, the CARP concluded the impact of Internet webcasting on record sales in indeterminate. Webcasters argue their medium, like radio broadcasts, contributes positively to artist exposure and sales.

I believe the recording industry has been much too slow to adapt its business practices to the incredible opportunities presented by the Internet. It needs to realize the demand for digital transmissions on the Internet, through mediums [sic] like Internet radio and file sharing software. Much like the film industry fought against new distribution forms like video rentals -- which ended up creating incredibly valuable new opportunities for the industry -- the recording industry is finding it difficult to embrace the promise of digital distribution.

For its own good, the industry should embrace business models based on electronic distribution. The approach that eventually succeeds will have to be built on the principle of respect for the rights of artists, producers, broadcasters and consumers.

Please do not hesitate to contact my office again. Because we have not had regular mail delivery since the Anthrax threat in October, e-mails, phone calls, faxes, and in-person visits are the most effective ways to communicate with my office. I also invite you to visit my website at http://www.house.gov/shays.

Sincerely,
[Unreadable Felt-tip Scrawl]
Christopher Shays
Member of Congress

CS:mpm

Note: If I get anthrax, this is where it came from.
Posted by .(JavaScript must be enabled to view this email address) on 05/13/02 at 10:24 AM
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