New regulations threaten future of webcasting

By Jillian Smith
August 30, 2007

Most internet radio stations are biting their fingernails and wearing their lucky charms that they won’t get shut down. This is due to a large increase of royalties they may have to pay set by a federal agency.

Cabrini’s radio station, WYBF, is among those in limbo due to a new federal regulation that was supposed to come out on July 15 but did not.

“It’s not an easy topic for college radio right now because everything’s still being fought,” General Manager Heather Shanley said.

?In March 2007 SoundExchange, commissioned by the Federal Communications Commission released the first decision to set the rate for 2006 until 2010, although this battle has been on going for over two years. July 2007 was when the Federal Court denied a motion to have final say in per song rate. In August 2007, commercial radio stations were pushing to put a cap on the total costs per song.

With this increase in fees, most Internet radio stations are being forced to shut down. These fees were sanctioned by SoundExchange, however, they are utterly opposed by thousands of webcasters who are worried that the higher costs will force them out of business.

“What is hurting college radio stations the most is the back paying of fees for the last two years that the webcasting issues have been in arbitration,” Shanley said.

For the past two years, WYBF had to pay a flat rate to SoundExchange of $250 each year. Since this court ruling, WYBF’s fees have increased, paying $500 for the 2007-2008 school year, along with another $500 to make up the costs for the past two years.

As set by the Copyright Royalty Board, college campuses that have more than 10,000 students enrolled did not have to back pay any fees because their flat rate had already been $500 per year. Only schools with an enrollment of less than 10,000 students were forced to pay an additional fee for the past years because their flat rate was only $250, Shanley said.

Instead of being charged a flat rate like a college radio station, commercial radio stations are charged by the song play. For the 2006 year, each song was charged eight cents. In 2007, each song was charged 11 cents and the price will continue to go up each year with a projected cost of 19 cents a song by the year 2010. This cost increase has forced commercial radio stations to push for a court ruling to a put a cap on how much total monies they will have to pay to SoundExchange.

Deals were struck last minute between a trade organization representing the Web radio operators and SoundExchange to “cap the per-channel fee at $500,000” according to

As of Monday, July 16, SoundExchange did not okay the deal.

Not only is the fee increase a challenge for college radio stations, so is record keeping. “How do we get paper logs for the past two years typed into a system and sorted to the specifications of SoundExchange and the continuing it?” Shanley asked.

Right now, WYBF has to log every song they play, including the artist, album title and record label on the chart along with the title of the song. If this information is unknown, then the song cannot be played on WYBF.

Logs consisting of two weeks worth of playlists are then sent to SoundExchange once a quarter. If these logs are not sent, WYBF could be subjected to losing its webcasting license and fines.

“Supposedly SoundExchange is working with computer programmers to create database software to simplify the logging procedures,” Shanley said. However, nothing formally has been mentioned. But with a new program will come some new costs, and what the cost will be is something Shanley and WYBF questions.

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Jillian Smith

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