It is looking increasingly likely that the increase in copyright royalty rates for Internet webcasting will go into effect as planned on July 15, 2007. There has been no action from the United States Court of Appeals or Congress, and the series of offers from SoundExchange to various factions of the Internet radio community have been rejected out of hand. We have previously discussed the various scenarios that could lead to a stay or change in the rules.

So webcasters should be prepared to file two forms and, potentially, a lot of cash, with SoundExchange by July 15. One form will calculate the amount owed for streaming operations during 2006, subtracting the amount actually paid in that year from the amount required to be paid according to the new rates. The other will do the same for all months through May 2007.

The forms vary according to the webcaster’s commercial/noncommercial status (remember that there is no separate designation for "small webcasters" under the new royalty scheme) and, if the webcaster is a commercial webcaster, according to whether the rates are being calculated under the "per performance" or "aggregate tuning hour" option for 2006 and 2007. The forms are available on the SoundExchange website. Commercial webcasters should look here while noncommercial webcasters should go here.

Please do not hesitate to contact a Fletcher, Heald & Hildreth attorney if you have any questions about the new rate structure.