The U.S. Copyright Office and the Librarian of Congress have officially announced their decision on the ever-controversial royalty rates for webcasting music online.

The official fee's come in at a rate of .07 cents per song which is streamed live online and a lower rate of .02 cents per stream for simulcasted and / or archived broadcasts. There is also an additional fee to keep copies of the music on the web server of 8.8 percent of the entire royalty fee, which is tacked on top of the total cost of the royalty rates. :(

While the rates are half of that which the Copyright Arbitration Royalty Panel (CARP) recommended initially in Febuary, the finalized official fee structure still may force a vast majority of independent webcasters offline. With a additional requirement of payment of back royalties all the way through 1998, webcasters now have only 45 days to come up with the payment for webcasting already done, putting many in a unrealistic position of trying to come up with absurd amounts of money for a service which they may not have been charging for to begin with.

For example, Live365 now faces fees of upwards of $1.5 million from previous webcasts, and will have to come up with the money to pay the "instant fine" from webcastings since 1998 now that the US Copyright Office has set the royalty structure. On top of that, the company will have to figure out how it can afford to pay $200,000 per month in order to break even with it's webcasting service.

Noncommercial broadcasters are not exempt from the royalty madness as many thought they would be initially. A noncommercial broadcaster now is required to purchase a $500 license to simply legally broadcast music for free and face almost certain fee's from service providers such as Live365 for the use of their service (which now costs Live365 quite a bit to simply technically provide).

Cary Sherman, president of the Recording Industry Association of America stated that the RIAA is not trying to put independent webcasters out of business, but with the now finalized payment structure, many smaller and independent webcasters are scratching their heads trying to figure out just how the hell they can afford to simply continue to do that which they have been doing and provide a service to the online community at large.

Leaders of the American Federation of Musicians (AFM) and the American Federation of Television and Radio Artists (AFTRA) have expressed serious concern that the webcasting rate issued by the Librarian of Congress on June 20, 2002 fails to compensate recording artists fairly for the use of their work on the Internet. Additionally, AFM and AFTRA points out how the decision will force artists to subsidize the webcasting operations of major corporations like AOL and Viacom, giving more control over the distribution of music back to the corporate monsters controlling the traditional music industry.

While the fee's have been finalized, some still hope that additional lobbying on the part of the community may help to reverse these rates and level the playing field for broadcasting music online. Jonathan Potter, the head of webcasting trade organization Digital Media Association stated his organization will be working to push for a even lower royalty rate then the finalized fee's announced yesterday.

The next 45 days may mark the end of webcasting online as we know it ( especially considering the back logged fee's accumulated since 1998 ), so enjoy it while you can. The power of digital distribution of music is seeming falling back into the hands of the corporate conglomorates who can afford to be in the business. As copyright owners, the record labels will of course receive a portion of the fee's collected which will allow them to recoup these high fee's for webcasting music to the digital community.