Radio stations have never had to pay performance rights to play music on the airwaves and so why should they be required to pay such royalties for music that is played during Internet simulcasts?
That's the basis of a federal lawsuit filed Thursday in Philadelphia by six broadcasting companies, including Salt Lake's Bonneville International, against the U.S. Copyright Office.
The suit seeks a review of a Dec. 11 ruling that would eventually require stations to pay a yet-to-be-determined amount in royalties to record companies and composers when they play their work on the Internet in simulcast broadcasts.
Radio stations currently pay composition rights on music to Broadcast Music Inc. (BMI), a nonprofit performing rights organization for airwave broadcasts.
Bruce T. Reese, president and CEO of Bonneville International, said his company has been heavily involved with this issue through the National Association of Broadcasters, also a plaintiff in the lawsuit.
No one knows for sure how much this ruling, if it stands, could cost radio stations. The Copyright Office is currently studying the rates. Some believe the fees could total millions nationally. Reese agrees it kind of represents a double payment on royalties by radio stations, since they already pay BMI.
The intent of the legislation was to prevent people from stealing CDs when they are transmitted digitally over the Internet.
"We (radio stations) certainly aren't the primary target," Reese said, explaining most broadcasters have no qualms with the general purpose of the legislation, only the conflict it gives radio stations. A few large radio companies have shied away from the issue because they also have record company ownership.
He said so far the legislation may be scaring some stations away from experiments with an Internet audience.
Reese agrees that many feel the Internet is a "free" domain and that's one of many issues the lawsuit may eventually have to address. He said the history of radio has always meant things like this have to be resolved in court. No one tries to sit down and talk through such issues first.
The lawsuit claims the Copyright Office exceeded its authority with the ruling, but music companies applaud the ruling because of its battles with Napster.
Reese said radio news/talk stations that play no music, such as KSL, would be the least affected by the ruling. Most other Bonneville stations play music, though. He finds the ruling ironic because radio stations need record labels and they need radio stations, too.
Cox Radio, Infinity Broadcasting, Entercom Communications, Emmis Communications, Susquehanna Radio Corp. and the NAB are the other plaintiffs in the 15-page lawsuit against the Copyright Office.
E-MAIL: lynn@desnews.com