U.S. Sen. Ron Wyden has seen the future of Internet radio and doesn’t like what he sees. Because of this, Sen. Wyden will soon be introducing a timely bill in the U.S. Senate, the “Internet Radio Fairness Act.”

We applaud the senator for his leadership. If enacted, the IRFA will correct the flaws in the existing process by ensuring that the government body charged with rate setting has the information it needs. It would level the playing field by adopting a fee standard that is more likely to result in reasonable license fees, and it would promote competitive market deals where those deals are possible.

The growth of Internet radio and its promise for consumers, artists and media companies has been stunted for too long by a government rate-setting process that has yielded crushing music royalty fees — fees far in excess of those that would exist in any reasonably competitive market. The fees have sucked the life blood out of a long list of companies that have tried to create new businesses on the Internet, including Microsoft, Yahoo and AOL, to name just a few. Closer to home, the company I work for, Salem Communications, recently made the decision to close down 10 music webcasts in its New Media Division.

The sole reason for these losses, and the decision to close these webcasts, was the prohibitively high cost of music royalties. The existing rate setting system has killed webcasters, innovation, and, frankly, the chance for artists and record companies to have their recordings heard and to grow their businesses.

It’s time to fix the problem, and the IRFA goes a long way towards correcting the system.

Thank you, Sen.Wyden!

Dennis Hayes serves as general manager of KPDQ AM/FM, The FISH and “El Rey.”

Contract Publishing

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