Web radio's last stand

A new ruling involving the Digital Millennium Copyright Act is set to wipe out independent online music stations.

By Katharine Mieszkowski

Mar 26, 2002 | SomaFM is the kind of Internet-only radio station that offers a true alternative to the mainstream fare on the offline dial. About 20,000 listeners a day tune in to the URL to groove to the streams of ambient down-tempo electronica. In the mix: the Chemical Brothers, Mama Gravy, old Moby and obscure new discoveries like the German band Electroslide.

The San Francisco-based station, which began as a pirate radio operation in 1996 at the Burning Man festival, has been continuously broadcasting online for about two years. It runs completely on donations -- about $1,000 a month, plus some bandwidth -- from listeners.

But a new ruling under the Digital Millennium Copyright Act threatens to change the playlist at SomaFM and other stations like it, if not actually shut them down altogether.

The Copyright Arbitration Royalty Panel, a body appointed by the U.S. Copyright Office, ruled on Feb. 20 that under the DMCA, radio stations must pay a fraction of a cent per song, per listener, for every song they stream. Under the CARP ruling, Internet-only radio stations would pay a royalty fee of 14/100 of a cent per song, per listener, retroactively through October 1998. Webcasters are up in arms -- while they are not opposed to the principle of royalty fees, they say the rate structure is far out of balance to the economics of these tiny, often one-person operations.

In recent weeks, webcasters have started a Save Internet Radio campaign to try to amend the DMCA so they can stay on the Internet airwaves.

Rusty Hodge, the program director and general manager of SomaFM, spoke to Salon from his day job at a Web health insurance company to explain how the ruling will likely affect stations like his and what he's doing to fight it.

What fees were you already paying to play the music you air?

We pay ASCAP and BMI fees. Those are the fees that go to the authors of the songs. For a noncommercial station, like us, they're about $600 a year. It depends on how much traffic you get. This year, we're going to be paying close to $1,000. It's comparable to what a college radio station would pay. If you play back music, like in a restaurant or a nightclub, you have to pay those fees.

How will that change under the CARP ruling?

The new fees would be in addition to the ASCAP and BMI fees. We did some rough calculations and found that it would cost us under the terms of that ruling about $1,000 a day.

The problem with the CARP ruling is that everybody assumed that it would be kind of like the BMI and ASCAP fees were; [that] the fees would be reasonable. We figured for noncommercial broadcasters it would be like $1,000 or $2,000 a year, and while it would hurt some of the really, really small little guys, the more serious little guys -- like us, who have a community supporting them -- would still be viable.

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