Please act to save small, independent internet radio broadcasters.  As you may be aware, the CRB royalty rate decision has increased the royalty rates that internet radio broadcasters pay on the "sound recording performance" to SoundExchange - fees so high that if not changed will put most small and medium-sized internet broadcasters out of business.

Furthermore, over-the-air broadcasters are exempt from paying royalties on the sound recording copyright. These royalties were legislated by the Digital Performance Right in Sound Recordings Act of 1995 (aka the DPRA). The reason was that it was then thought "digital" broadcasts were  "perfect copies" of an original work and should therefore be treated different from over-the-air radio broadcasts; hence the law was changed so that only over-the-air broadcasters were exempted from royalties on the performance of sound recordings. When the original copyright laws were written, Congress realized it was creating a legal monopoly to the copyright holder. So in order to balance out that government-given monopoly it also added provisions for fair use, such as copying for personal use, exemptions for libraries, and exemptions for radio broadcasters.

The DPRA is based on a fundamentally flawed assumption -- that "digital transmission" allows unlimited perfect digital copies of the original work. But internet radio stations do not distribute perfect digital copies of the original copyrighted performance; instead, they use MP3 and WMA. Such broadcasts are drastically "compressed" and (I'm sure you know) nowhere near a perfect digital copy. They also segue songs together, and make announcements over the beginnings and ends of songs. It's just like over-the-air radio, and in many cases, the audio quality of the internet broadcast is inferior to an analog FM broadcast!

Due to all the corporate consolidation in over-the-air broadcasting, it no longer provides a free flow of ideas and information. Internet radio has responded to fill that free flow of ideas, and there are thousands of internet radio stations with loyal audiences who look to them to discover new music.  Many of these are advertising-free, and support themselves through listener donations.  But if SoundExchange gets its way, advertising-free internet radio will come to an end, and only the largest corporations will be able to legally operate internet radio stations in the United States.  US listeners seeking a diversity of viewpoints will be forced to turn to international broadcasters.

Achieving parity with over-the-air broadcasters seems to be the only fair solution for internet radio broadcasters and listeners. This can be done by amending 114(j)(3) of the Copyright Act to change the definition of "broadcast transmission" to include internet radio broadcasts, aka  eligible nonsubscription transmission, as defined in Sec. 114(j)(6).

If amending the Copyright law is not feasible, then please introduce legislation to reinstate the Small Webcaster Settlement Act, and stop the retroactive "ex post facto" royalty payments for 2006 mandated by the CRB, until all appeals have been heard. These royalty rates must be reduced to something reasonable; for example, 5% of revenues is in line with what broadcasters pay to composers (through ASCAP and BMI).  It seems that the rates that the CRB has ruled for internet radio "sound recording" royalties is grossly out of line.

This is the only way that internet radio operators can achieve parity with their over-the-air peers, and the only way to insure a "marketplace of ideas" - an idea important to our democracy.