Copyright Royalty Board’s Decision Forces Internet Radio Hobbyist to Bankruptcy

Rochester, Minnesota (March 13, 2007) – The Copyright Royalty Board’s (CRB) March 4, 2007 decision to raise royalty rates and collect them retroactively for the year 2006, plus their decision to unilaterally nullify the Small Webcaster Settlement Agreement (SWSA) will not only force Classic Hits Radio and Modern Rock Classics off the internet, but put their hobbyist owner in personal bankruptcy and in jeopardy of losing his home.

The CRB’s decision removed the Small Commercial Webcaster category that Owner/Operator of Classic Hits Radio and Modern Rock Classics John Russell properly filed under with SoundExchange for both 2006 and 2007. This category based royalty fees on a "percentage of revenue or expense" calculation. Previously, stations having revenues under $50k or expenses just under $30k were able to fulfill their legal sound performance royalty obligations with the minimum payment of $2,000.

The new sound recording royalty rates are based on a set fee "per performance" defined as "each instance in which any portion of a sound recording is
publicly performed to a Listener by means of a digital audio transmission (e.g., the delivery of any portion of a single track from a compact disc to
one Listener)." This pertains to any copyrighted material that the webcaster does not have a direct license from the Copyright Owner of such sound
recording.

Owner/Operator of Classic Hits Radio and Modern Rock Classics John Russell said, ”In 2006 and 2007, I agreed to abide by the Small Webcasters Settlement Agreement, which allowed me to pay my royalty fees in a lump minimum payment of $2000, with increases based on any revenue I received over the course of each month. Of the $2000 minimum that I paid, in accordance to the SWSA, the actual amount used for royalties amounted to $137.97, leaving $1862.03 for Sound Exchange (royalty collection entity) to retain for their operational fund.”

“Using the CRB’s decreed method of rate determination, I would owe approximately $36,500 in retroactive royalties…my annual income is $27,710.63…my estimated royalty rate for 2007 would be $60,225. I will have to declare personal bankruptcy because I pursued a hobby that I wanted to share with others…I “made” a total of $1,379.70 with my hobby streaming station in 2006 which, after $608.19 in expenses ($771.51), I put right back into my hobby stations. I am sure that none of the artists I play and promote want me thrown into the street, but the greedy administrators of royalties could obviously care less.”