Judge: Radio Stations Must Pay Royalties On Simulcasts

A federal judge has upheld a December 2000 ruling by the U.S. Copyright Office declaring that terrestrial radio stations with streamed Internet broadcasts must pay a performance royalty to artists and labels. (Bulletin, Dec. 11, 2000). In his ruling yesterday in the U.S. District Court for the Eastern District of Pennsylvania, Judge J. Berle Schiller denied a February suit brought by the National Assn. of Broadcasters (NAB) that sought to exempt simulcasts from the payments mandated by the 1998 Digital Millennium Copyright Act by reason of "non-subscription" criteria that allow third parties to "make ephemeral copies of copyrighted recordings."

"It strains credulity to suggest Congress intended to exempt AM/FM streaming, which is global in nature, while simultaneously limiting retransmissions to specific FCC-defined geographic areas," said Schiller. Terrestrial radio broadcasters in the U.S. are currently exempt from such license requirements and fees.

In a statement, the NAB, which says it is reviewing its options, calls the ruling "unfair and unreasonable." RIAA president/CEO Hilary Rosen, who hailed the ruling, says she will "look forward to working with the broadcasters for a smooth transition into this marketplace."