Webcasters are denied rehearing on royalties

Internet radio broadcasters were dealt a setback Monday when a panel of copyright judges threw out requests to reconsider a ruling that hiked the royalties they must pay to record companies and artists.

A broad group of public and private broadcasters, including radio stations, small start-up companies, National Public Radio and major online sites like Yahoo Inc. and Time Warner Inc.’s AOL, had objected to the new royalties set March 2, saying they would force a drastic cutback in services that are now enjoyed by 50 million people.

In the latest ruling, the Copyright Royalty Board judges denied all motions for a rehearing and also declined to postpone a May 15 deadline by which the new royalties will have to be collected.

However, they did grant leniency on one point, allowing the webcasters to calculate fees by average listening hours, as they had been, as opposed to the new system of charging a royalty each time every song is heard by an online listener. That exemption counts for last year and this year. After that, the new per-song, per-listener fee structure goes into effect.

Many webcasters say the sharply higher royalty fees will put them out of business. Talk of the ruling dominated a one-day meeting of Internet radio broadcasters in Las Vegas alongside the annual conference of the National Assn. of Broadcasters, a group representing local radio and TV stations.

Also on Monday, several Internet radio broadcasters announced a campaign to raise awareness of the issue and encourage listeners to write to their representatives in Congress.

David Oxenford, a lawyer representing several webcasters, said the next step was probably an appeal to the U.S. Court of Appeals for the District of Columbia Circuit, but he noted that process could take at least a year.