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Billington's webcast ruling based on Yahoo!/RIAA deal, says Mark Cuban
By Jon Newton, p2pnet.net
(more articles from this author)
2002-06-27
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On June 20, Librarian of Congress James Billington issued his final ruling on webcasting saying, in essence, that webcasters must pay copyright holders a rate amounting to 70 cents per song per 1,000 listeners of Netcasts.

Lauded by some and derided by others, the ruling seems, at the least, to have been developed after due consideration.

But, says Broadcast.com founder Mark Cuban, things aren't as they appear to be.

He says Billington's decision was based on a plan designed by Yahoo! [Broadcast.com's owner] to shut out small webcasters and decrease competition, and was itself part of another deal between Yahoo! and the RIAA (Recording Industry Association of America).

Cuban made these claims in an email to RAIN (Radio And Internet Newsletter - www.kurthanson.com) on June 23.

'percentage-of-revenue'
"Yahoo! Broadcast offers rich audio and video content and services through a digital distribution network. It is designed to deliver high quality audio and video to large audiences via the Internet through both dial-up and broadband connections."

That's what it says on Yahoo!'s web site. But on June 25, if you tried http://broadcast.yahoo.com, all you got was a blank. And that may have been because Mark Cuban, the man behind the service, is no longer with Yahoo!.

Although he'd left the company by the time the Yahoo!/RIAA deal was signed, he explained in the email that he'd helped put it together and that it had included a high royalty price to avoid a 'percentage-of-revenue' royalty rate, the idea being that low-revenue webcasters wouldn't be able to compete against Yahoo!.

RAIN publisher Kurt Hanson declared, "Whereas Congress instructed the Librarian and the CARP to set a rate based on what a willing buyer and willing seller WOULD pay, taking into account several different criteria, both the CARP and Billington set a rate based almost exclusively on what one grudging seller [the RIAA] and one atypical buyer [Yahoo!] DID pay, taking almost none of the other criteria into account."

In his email, Cuban states:

"I also wanted there to be an advantage to aggregators. If there was a charge per song, it's obvious lots of webcasters couldn't afford to stay in business on their own. THEREFORE, they would have to come to Broadcast.com to use our services because with our aggregate audience, if the price per song was reasonable, we could afford to pay the royalty AND get paid by the webradio stations needing to webcast."

Hanson says on his site, "If I were a Congressman, I'd be FURIOUS right now: In setting a statutory license designed to encourage the growth and diversity of a new industry, the arbitrators and the Librarian ignored Congress's instructions and used the terms of a deal that was specifically constructed to have the opposite effect!"

For the complete Mark Cuban email, visit www.kurthanson.com/cuban/


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