A response to Senator Dianne Feinstein's response to constituents

Several people have emailed me copies of the letter that Senator Dianne Feinstein is sending her constituents who wrote or called about the Internet Radio Equality Act. The good news is that her office seems open to the the bill, much more now than in the past. But her response has two points which need to be clarified, below:

Senator Feinstein writes:

        I understand that this decision has raised serious concerns for webcasters, in particular, who are worried that the increased rate will force their businesses to shut down.  In response, Senators Ron Wyden (D-OR) and Sam Brownback (R-KS) introduced a bill, the Internet Radio Equality Act, which would vacate the Board's decision and apply a lower rate for 2006-2010.

The bill more importantly changes the standards by which the Board calculates the royalty rate; and uses the same calculation methods that satellite radio and cable music services are calculated under. Currently, internet radio royalty rates are calculated on a very different (and less fair) basis than satellite radio.

Senator Feinstein continues:

        Clearly, there are important interests that need to be balanced.  I am hopeful that it is not too late for a rate compromise to be worked out by the parties involved so that Congress does not need to intervene; however, I will take a close look at the legislation and this issue.

Even if a settlement occurs between the parties involved (webcasters and SoundExchange), this would only cover SoundExchange member copyright owners. Unlike the statutory law (as defined in Section 114) which allows webcasters to play any publicly released sound recording (as long as they are paying royalties under the statutory license).  A webcaster who signs a settlement agreement with SoundExchange can only legally use recordings by SoundExchange members.  This is why it's so important for congress to pass the Internet Radio Equality Act, which would create a fair statutory rate

Otherwise, internet broadcasters will not be limited to recordings from SoundExchange members, and a large number of independent artists won't be able to have their music played on the air.

If you have received a response from Senator Feinstein's office, please respond (either call or write) and try to clarify these issues with them.