The process of developing a royalty structure for Internet radio station fair to the tricky melange of copyright holders of music has been an arduous sausage making process lasting years. See this post from Doc Searls for a trip through the ugly complexities.
But, the end product of sausage making is supposedly an edible product. Not so in this case. The organization responsible for determining how much Internet radio stations should pay in royalties decided to jack up the cost of running a station online by as much as 180 percent. It seems, somehow, that if you run a big terrestrial radio station, you don't need to pay any royalties. But, if you run a little station out of your basement that cranks out the top Klezmer hits you need not only pay per song, but per listener of that track.
For a very clear explanation of what this might mean to an Internet radio station, see this Wall Street Journal piece on the famous WOXY.
Fortunately (or predictably), the organization responsible for the rates has figured out that folks aren't so happy about their decision and now have cranked the sausage machine back up by announcing the holding of hearings to discuss the result. CNET reports today on the move.
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