RadioParadise isn't on the air today. Nor are Choice Radio, Mostly Classical, Digitally Imported Radioo, KPIG and a heap of other Internet radio stations, some of which also broadcast over licensed airwaves. They are all participating in a Day of Silence to protest fees and accounting procedures due to be imposed by the U.S. Copyright Office starting May 22.
This new “regulatory environment” (to borrow a term from the progressive telecom and broadcast industries) was developed by the Copyright Arbitration and Royalty Panel, which was convened by the Library of Congress and delivered its recommendations several months ago. CARP's job was to impose a variety of copyright obligations, including payments for performance rights, on Internet broadcasters, under the Digital Millennium Copyright Act (DMCA).
CARP will kill Internet radio. It's that simple. The Day of Silence is practice for the grave.
Here's the Linux angle. Many of the most innovative Internet broadcasters—the ones whose technical smarts and entrepreneurship have brought their stations closest to becoming real businesses—are making creative and resourceful use of Linux and other open source software. (We covered the case of KPIG and Radio Paradise several months ago.) Linux and open source also plays a role where noncommercial broadcasters need to get on the air with a minimum of cost and fuss and a maximum of reliability. That's what WUNC, WXYC, WCPE and WXDU are getting from hosting at Ibiblio.org, which is directed by Paul Jones, a Linux hacker and Clinical Associate Professor in the School of Journalism and Mass Communication at the University of North Carolina in Chapel Hill.
We've written about CARP, Internet Radio and Linux business advantages before:
Here are a few more links that shed light on the situation:
Here is some legal background on the matter:
Briefly put, the market cancer that is CARP was introduced with the DRPA and metastasized with the DMCA.
The DRPA was drawn up when Netscape was at 1.0 and the Net seemed to promise the alchemic morphing of every business into something far more capable, efficient, far-reaching and wealth-producing. Back then forward-looking folks in both industry and government saw the Net as something that would improve business. Almost nobody foresaw the huge distraction that wealth-creation in the stock markets would produce instead.
The regulatory effect was to produce a law that recognized webcasting not as a new medium for radio, but rather as a performance venue from which revenues could be extracted, much as they are in a club or a concert hall. That's why CARP regards every song played by an Internet radio station is a “performance” and every listener as a potential customer.
Lawmakers saw that while conventional broadcasting was not technically equipped to develop vendor-customer relationships with listeners, webcasting would be in a position to do exactly that. That's why the CARP Report presumes the existence of a performance distribution business in which revenues are collected for every song played for every listener.
So CARP came up with requirements for record keeping and per-song/per-listener fees that it felt would be legitimate for a business whose purpose is to sell inventory and pay upstream sources for the merchandise. CARP assumes that stations will find ways to mark up those goods and sell them to listeners—or to find some other revenue source, such as advertising.
Nowhere, from DRPA through CARP, are the lawmaking and regulatory processes informed by the nature of the Net as a place or a space—a commons on which markets for goods might naturally be built. Instead lawmakers and regulators have only seen the the Net as a distribution system, differing from airwaves only in the ability of shippers to say how much goes where, and therefore to account for it.
So, armed only with plumbing and shipping metaphors, CARP tortured itself trying to describe real market relationships. The groaning starts here:
In establishing rates and terms for transmissions by eligible nonsubscription services..., the copyright arbitration royalty panel shall establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller. In determining such rates and terms, the copyright arbitration royalty panel shall base its decision on economic, competitive and programming information presented by the parties, including—
(i) whether use of the service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the sound recording copyright owner's other streams of revenue from its sound recordings; and
(ii) the relative roles of the copyright owner and the transmitting entity in the copyrighted work and the service made available to the public with respect to relative creative contribution, technological contribution, capital investment, cost, and risk.
The statute further directs the Panel to set “a minimum fee for each type of service” and grants the Panel discretion to consider the rates and terms for “comparable types of digital audio transmission services and comparable circumstances under voluntary license agreements” negotiated under the voluntary negotiation provisions of the statute.
Later the report says this:
The meaning of the “willing buyer/willing seller” standard was the subject of considerable testimony and argument.
Here's how the Librarian (of Congress) settled the argument:
The statutory standard set forth in section 114(f)(2)(B) requires the Panel to determine the rates that a willing seller and a willing buyer would agree upon through voluntary negotiations in the marketplace. The Panel must use the “willing seller/willing buyer” standard to set rates for all non-interactive, nonsubscription transmissions made under the section 114 license, including those within 150 miles of the broadcaster's transmitter.
It's gets even more complicated than that; but the deep irony is still easy to make clear: commercial radio has no buyer/seller relationship between station and listener, “willing” or otherwise. That relationship only exists between station and advertiser. In fact, every commercial station's consumers and customers are utterly different populations.
But CARP pressed forward, imagining an entirely new business that has never existed: accountable broadcasting. Commercial radio has never had anything like it, and can barely imagine it. Public broadcasting has something like this system, but the payments are all voluntary. No accounting for use by listeners is involved.
Ironically, the only broadcasters that have ever moved in the direction CARP imagines are hackers like Bill Goldsmith of Radio Paradise and KPIG, who have built a remarkable amount of accountability into their Web-assisted broadcast systems. Everything either of those stations plays is posted live on the Web, and scrolls into archives that go back for years. Most Interent broadcasters also have the interest and will to pay artists and record producers for the goods. They're starting to move those intentions toward a real business that makes real money. Unfortunately, they haven't arrived at that point yet, and they never will if CARP has its way.
Of course, that's the hidden agenda.
If radio ever becomes accountable to its listeners, and the web waves turn into a real marketplace where everybody—composers, recording artists, record companies, stations and listeners—are involved and relating directly to each other, the inefficient advertising-funded industry we call commercial radio is in deep trouble.
So there we hae it.
Cory Doctorow of the EFF puts the problem perfectly:
The role of the technology industry is to blaze new trails that create new opportunities for Hollywood. The role of Hollywood is to seek injunctive relief from those opportunities.
Doc Searls ([email protected]) is Senior Editor of Linux Journal.