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We’ve spoken about Internet Radio before. Time for an update. It’s now do-or-die time.

Since its inception, the issue of royalties to the music industry has been hanging over Internet Radio’s head. For the last few years, there has been long, loquacious arguments over this.

The government official responsible for determining royalty rates is the Librarian of Congress. A few months ago, he proposed rates that in all honesty were too high, and were bound to bankrupt just about anybody who had been doing this for any length of time.

Mind you, these rates are retroactive back to 1998, so no matter how low the rates were set, the bill was bound to be high. Sort of like getting electricity free for four years, then finally getting the bill.

To make a long story short, the Librarian’s rate were due to take effect October 20.

The current Republican head of the House Judiciary Committee, James Sensenbrenner, proposed a bill holding off the day of doom for six months. The leading House Democrat on the Judiciary Committee, John Conyers, essentially told fellow Democrats, “This has gone on long enough” and said he would oppose the bill. This, combined with union opposition, would have effectively killed it.

This provoked some intense last-minute negotiations, and a compromise between the RIAA and one group of webcasters was announced a few days ago. Mr. Sensenbrenner took out the six-month delay from his bill and put in the provisions of the compromise. It greatly reduces the amount of the four year bill, and gives places the chance to pay it in three installments. Nonetheless, if you’ve been doing this for years, the bill will still be hefty.

If you’d like to see the bill’s details and analysis, just click on the links.

The House passed this without opposition, and now it’s in the Senate’s lap.

Opinion among webcasters appears to be sharply split. The realists are saying, “This is the best deal we can get right now, take it and live to fight another day.”

Then there are those who seem more hysterical than historical about the issue. Talk about a content-free rant.

The political reality is: Time runs out October 20. No more delays, no more postponements.

It’s going to be hard enough to get this compromise bill through the Senate. If it doesn’t go through, the much higher rates set by the Librarian take effect.

You have to ask yourself, “Just what would make people like this happy?”

Representative Conyers’ office has a real strong suspicion. As they stated in the letter to other Congressmen:

“(The bill) would mean less income for (artists) and their families for the sole reason that Internet companies don’t want to pay for the music on which they are building their businesses. What is even more surprising is that, for the past several years, the Internet companies have been encouraging the creative community to make its songs available online….(now) these same companies are pushing Congress to give them the music for free.”

The reference to the bill is not technically true (the initial version only provided for a postponement), but after four years of essentially no progress, it’s hardly unreasonable to think that is the real position of many of the webcasters.

In politics, perception is more important than reality. If Congresspeople get told that a senior member of the House thinks you’re a bunch of freeloaders, that carries a ton more weight than a million Slashdot posts.

The Moral of This Story

This is a Geeks vs. Powers That Be fight in Washington, and one that should be carefully studied.

If you look at the whole history of the affair, the geek position can at least be perceived as being more obstructionist than the RIAA. Not a “OK, here’s what we think is a reasonable amount, let’s negotiate” or even “here’s why we think the public good would be better served by exempting us from paying royalties.”

It’s more like begrudging if not flat-out denying the right of government to do such things, more like “Who are you to tell us what to do?” This isn’t exactly the brightest thing in the world to do to those governmental officials who have that right.

The last few days have been bad ones in the long run for the free content movement. Now the unions have gotten interested in this, and unions remain a big legislative player, particularly among Democrats.

No doubt due to their influence, you now have Mr. Conyers telling other Democrats about these cyberfreeloaders. So what? If the Democrats regain control of the House (which is quite possible), take three guesses who is going to be the head of the committee handling bills dealing with copyright and P2P and things like Palladium and El Grande the next two years? Mr. “They’re All Freeloaders.”

Not good.

The “go away and leave us alone” tactic has been tried. It didn’t work, and next time, government is not going to be so patient about stonewalling.

Better come up with something else.

Ed

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