Dissonance over US bid to cut Internet radio royalties

The row began to heat up in September, when a group of lawmakers introduced the Internet Radio Fairness Act to equalize royalty payments paid per song for digital radio, whether it is transmitted over the Internet, cable or satellite.

The proposal was swiftly endorsed by Pandora Media, the biggest U.S. Internet radio firm, which has complained of unfair treatment by the current royalty system.

Pandora said the bill would “establish a level playing field for Internet radio” and end a “fundamentally unfair” system that requires it to pay some 50 percent of its total revenue in royalties.

That compared with less than 10 percent paid by satellite radio firm SiriusXM, which benefits from a preexisting rate allowed under a 1998 law.

Pandora stepped up its campaign in the past week, asking users to press lawmakers to act on the bill.

“As a musician myself, I believe artists should be fairly compensated, but the current system hurts everybody, including artists,” said Tim Westergren, cofounder of Pandora, in a video appeal to its members.

Sponsors of the law say the current royalty system was established before anyone imagined the potential for Internet radio.

Royalty rates for Internet radio are set by a panel of three copyright judges who determine the “marketplace” rate. That differs from a standard of eight percent set for satellite radio and 15 percent for cable music.

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