Court rejects Webcasters' plea for relief
A federal appeals court has declined to grant a petition by Webcasters to delay the onset of new royalty fees that they argue could imperil their offerings. — In a one-page order filed late Wednesday, the U.S. Court of Appeals for the District …
Context & Ripple Effects
The ruling caps a months-long run of losses for internet radio. In March 2007, the Copyright Royalty Board sided with SoundExchange and turned down webcasters' arguments for lower per-performance rates, and by May the start of fee collections had been pushed back as the parties jockeyed over mechanics. Webcasters then asked the U.S. Court of Appeals for the D.C. Circuit to stay the new rates while litigation proceeded — a petition the court has now denied in a one-page order.
The denial matters because it removes the last procedural brake before the elevated rates bite; syndicated pickup at The Register and Ars Technica framed it bluntly as a stay denied on what webcasters call an existential fee schedule.
First-order effects
- Webcasters become liable for the elevated CRB royalty rates on schedule, with no judicial delay — the cost structure they argued could imperil their offerings now applies.
- SoundExchange's position as rate collector under the March Copyright Royalty Board decision is reinforced, since the court's denial leaves that framework standing while any appeal proceeds.
Second-order effects
- Webcasters' remaining leverage shifts from the courts to Congress and to negotiated settlements, pressing SoundExchange toward deals that distinguish small operators from large broadcasters.
- Large webcasters with deeper balance sheets can absorb the per-performance rates better than hobbyist and niche stations, pressuring the mid-tail of internet radio toward consolidation, aggregation, or shutdown.
Third-order effects
- If the pattern holds, internet radio structurally reorganizes around who can carry statutory per-performance royalties — favoring ad-supported scale players over independent stations and pushing rate-setting disputes into recurring legislative and regulatory fights rather than one-off court bids.
- The episode hardens the precedent that statutory license rates set by the CRB stand unless Congress intervenes, shaping how digital music licensing battles are fought for streaming formats beyond webcasting.
The trend: Internet radio is moving from a court-delay strategy toward negotiated carve-outs and congressional pressure as the CRB's per-performance royalty regime takes effect.