Leahy urges all sides to stop feuding at hearing

WASHINGTON — Capitol Hill solons admitted Wednesday there is little they can do to stop Librarian of Congress James Billington from announcing the new royalty rate Webcasters will have to pay record labels and artists for music streamed over the Internet.

Still, Sen. Patrick Leahy (D-Vt.) and other pols on the Senate Judiciary Committee said they sympathized with the small Webcasters who argue they’ll be put out of business if the proposed rate now on the table is adopted by Billington, who is set to rule Tuesday. At the same time, they said they had no authority to intervene at this late date.

Last year, the U.S. Copyright office convened a Copyright Arbitration Royalty Panel to hash out an appropriate per-play rate for music streaming. The Carp essentially split the difference between the label and Webcaster proposals, setting a rate of 14¢ for online-only broadcasters, and 7¢ for radio stations duplicating their broadcasts online.

Webcasters want Billington to void the rate; the Recording Industry Assn. of America says it’s willing to live with the rate, although it’s lower than the industry wanted.

‘Stop feuding’

At Wednesday’s Judiciary Committee hearing, Leahy urged all sides to stop their feuding and find a solution, regardless of Billington’s pending decision. He said the Carp process may indeed be flawed, acknowledging concerns that small Webcasters couldn’t afford the legal costs associated with a 10-month arbitration proceeding.

“We directed that the appropriate royalty rate could be negotiated by the parties or determined by Carp at the Library of Congress. Little did we know how apt an acronym that would later become,” Leahy said.

Leahy made public a letter signed by more than 130 smaller labels and recording artists stating that the new royalty could cripple the emerging Internet streaming biz, cutting them off from a crucial platform.

Time for new legislation?

Sen. Orrin Hatch (R-Utah), himself a songwriter, said it may be time for Congress to write up new legislation encouraging the proliferation of music on the Internet and making sure the major labels don’t claim all the action.

“I have repeatedly expressed hope that we were on the verge of a well-stocked, ubiquitous and user-friendly ‘celestial jukebox’ that not only would allow music fans easy access to music that they love but provide artists greater freedom to interact with their fans and increased income from the exploitation of their works,” Hatch said.

Witnesses at Wednesday’s hearing included RIAA prexy-CEO Hilary Rosen, who said the rate wouldn’t put anyone out of the business and that certain Webcasters are blowing estimates out of proportion.

But Arbitron veep of Webcast services Bill Rose testified that the proposed Carp rate will indeed have a devastating impact on indie Webcasters.

Webcasters and the record industry have been at odds over the appropriate rate ever since the online royalty was established in 1998 under the Digital Millennium Copyright Act.

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