Small webcaster in rural Oregon compares rate hike to radio consolidation

by PAMELA ROBEL, Daily Astorian

Your Internet radio station may be endangered.

The listeners of KBFD in Sunset Beach and other Internet radio stations may soon tune into silent air waves.

The Copyright Royalty Board, the governing body that determines fees for Internet and satellite radio, passed a rate increase of between 300 percent and 1,200 percent that will take effect July 15. The initial implementation date for the rate increase was May 15, but has since been pushed back in order to allow Internet, satellite and not-for-profit stations the opportunity to appeal the ruling.

For North Coast listeners this means a silencing of radio personality Cactus Pete, who broadcasts on both an FM station at 104.9 and his Internet station that streams commercial-free music 24 hours a day.

KBFD general manager and voice of Cactus Pete, Peter Kraushaar, says he is doing his best to ensure that his four-year-old Internet radio station remains free despite the rate increase.

"Naturally, we are doing everything we can to find a legal way to continue broadcasting," said Kraushaar.

In an effort to legally circumvent the new ruling by the CRB, Kraushaar is looking into music by artists that are not affiliated with the American Society of Composers, Authors and Publishers or Broadcast Music Inc. The new playlist for the station would include independent music and forego big name bands.

"There are an awful lot of independent artists out there," said Kraushaar.

He is also considering reformatting his Web site and making it a host for links to Internet radio stations from other parts of the globe or returning the site to it's previous incarnation - a Yahoo! Launch Cast.

The ruling also impacts other not-for-profit radio stations like National Public Radio affiliates who are charged a flat-fee based upon the number of listeners they have. These affiliates are expected to see a 10-fold increase in their fee rate, essentially putting them out of the broadcasting business.

The rate increase has created a stir far-and-wide, sparking the formation of the SaveNetRadio Coalition, a group dedicated to keeping Internet radio available for all those who wish to hear it. As part of this movement SaveNetRadio hosted a march on Washington, D.C., May 1 that included Webcasters, musicians and label representatives from genres like jazz, gospel and blues who garner much of their public hearing from Internet radio broadcasts. Leaders of the march met with members of Congress to discuss the Internet Radio Equality Act (H.R. 2060), a bill being sponsored by Rep. Jay Inslee (D-Wash.) and Rep. Donald Manzullo (R-Ill.).

"This titanic rate increase will sink many Webcasters if we don't act," said Inslee, a member of the House Energy and Commerce Subcommittee on Telecommunications and the Internet. "We need a more balanced rate structure that allows Internet radio to thrive, promotes media diversity and rewards artists for the use of their intellectual property."

The proposed bill would nullify the ruling of the CRB and set forth new rates of pay for noncommercial radio stations, keeping the rates low enough for independent broadcasters to survive.

Sen. Wyden teams up to

propose companion bill

Oregon Sen. Ron Wyden teamed up with Sen. Sam Brownback (R-Kan.) to propose a companion bill to H.R. 2060 today.

"Our bill is about standing up for folks ranging from a small Webcaster in a basement in Corvallis to an innovative startup in Beaverton to a new band trying to be heard in Portland to a huge music fan in Coos Bay," said Wyden. "Keeping Internet radio alive is part of a broader issue that is important to me - keeping the e-commerce engine running by preventing discrimination against it."

The companion bill includes a nullification of the CRB decision in much the same way H.R. 2060 does. It also creates special royalty rules for the Web-based affiliates of NPR and college radio stations. The final part of the bill is the removal of the $500 per channel minimum royalty fee set by the CRB.

Kraushaar says he is pleased with the postponing of the deadline and the proposed bill for a few reasons - the bill has generated feedback and been an eye-opener for those who are not familiar with Webcasts and the new deadline gives Webcasters more time to come up with a solution that allows them to continue broadcasting.

"The problem may be solved through legislation," said Kraushaar. "It seems like there are only a few people in Congress who really understand how Internet broadcasting works and Rep. Inslee, who sponsored the bill, is one of them."

Eighteen jazz musicians co-wrote a letter to Committee on the Judiciary co-chairmen Rep. John Conyers (D-Mich.) and Sen. Patrick Leahy (D-Vt.). In the letter, the artists write, "As you know, broadcast radio pays no royalties to recording artists; only Internet radio and satellite radio pay recording artists. Perhaps more importantly, broadcast radio plays so little jazz, blues and gospel music that Internet radio is, in many places the only way we can introduce our music to new audiences."

For Kraushaar's part, he says he remembers the consolidation of radio stations that occurred in the 1980s and that it seems the new rate increase is similar.

"They're trying to shut down the mom-and-pop and independent stations," said Kraushaar. "It's corporate America at its worst."

article originally published at http://www.dailyastorian.info/main.asp?SectionID=2&SubSectionID=395&ArticleID=42....

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