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Published by Randall Krause on Wednesday, July 11, 2007  [Permalink] [Return to Top]

SoundExchange Stalls As D-Day Looms Nearer

If SoundExchange does not reach a settlement prior to July 15 (and a stay of execution is not granted in that same timeframe), then there are basically no other legal options available to small Webcasters -- or at least nothing even remotely practical.

Our lawmakers are putting complete faith in an organization that could very well be stonewalling: These latest "offers" by SoundExchange are obviously to gain the favor of Congress, thereby forestalling the Internet Radio Equality Act until the deadline date for Congressional intervention passes.

Perhaps SoundExchange is pursuing this tactic because then all Webcasters would be forced to negotiate directly with them. SoundExchange could therefore bypass the statutory license altogether and set its own rates and terms for the use of SoundExchange member works exclusively. These agreements, theoretically, could include "fine print" limitations on royalty distribution to recording artists -- entitling record companies to the biggest piece of the pie. And, of course, SoundExchange would have full authority to decline or even revoke these agreements at any time.

Talk about controlling consumers' access to music diversity online.

I'm usually hesitant to theorize about conspiracies, but the motives of SoundExchange are becoming more and more transparent. I am relieved, however, to see that even Kurt Hanson arrived at many of these same conclusions in his July 9 editorial.

Randall Krause
Executive Director
Small Webcaster Community Initiative
randall@smallwebcaster.org

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