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CNN Live At Daybreak

Internet Stations Could be Crushed By New Copyright Fees

Aired May 01, 2002 - 06:24   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Internet radio stations have pulled the plug. They're staging a day of silence to protest new copyright fees that are about to be imposed. As CNN's James Hattori reports, the dispute is over establishing what is fair to performers and to fledgling webcasters.

(BEGIN VIDEOTAPE)

JAMES HATTORI, CNN REPORTER (voice-over): In half a converted San Francisco Garage, Rusty Hodge runs SomaFM, an Internet radio station playing a digital screen with an eclectic beat.

RUSTY HODGE, SOMAFM: The reason I got into doing Internet radio, I couldn't find radio stations I liked to listen to. Today he programs nine channel, drawing three thousands listeners a day. But it could soon come to an end.

HODGE: I really want to keep it going on, but it is really going to be hard to keep it going on.

HATTORI: That's because by May 21, the US Copyright Office will decide on new Congressionally-mandated fees imposed on Internet stations to pay performer royalties. It doesn't sound like much, as little as 1/14th of one cent, but that's per song and per listener. Hodge estimates it could cost him as much as $1,000 a day.

HODGE: You're hearing some things like, webcasters are basing their whole business and economic models on other people's art. It's like, what economic model? You know, we're losing money. It's a labor of love.

HATTORI: There are, perhaps, 10,000 Internet stations, most draw small audiences compared to AM or FM operations. Still, the recording industry says it's time artists got their due.

JOHN SIMSON, RECORDING INDUSTRY ASSOCIATION OF AMERICA: It is a question of equity. They spend a lot of time and money creating these works, and people are using them to build a business. They should be paid for them; the same way they pay for every other part of their business.

UNKNOWN RADIO ANNOUNCER: KALX, Berkeley.

HATTORI: And it is not just the fees. At UC Berkeley's student- run KALX, the new rules would also require extensive record keeping.

SANDRA WASSON, GENERAL MANAGER, KALX: They want UPC codes and they want the length of the song, and the song title and some of the records don't even have the names of the songs.

HATTORI: The recording industry says it is working to adjust the burden on small stations. But on paying artists, it says the buck and the beat stop here.

James Hattori, CNN, San Francisco.

(END VIDEOTAPE)

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