Internet Radio stations have been dealt yet another blow in the ongoing fight with the Copyright Board of America to have reasonable royalty rates kept for Internet radio stations. The US District Court of Appeals has just denied a petition to delay the rate hike due on the 15th of July 2007.

This means that in just two days, thousands of internet radio stations (based in the United States) are at the mercy of the greedy greedy SoundExchange and their insane new fees. What makes this even more sickening is the fact that they are able to collect fee's retroactively from the start of 2006 meaning that even though stations were legally licensed and paying their royalty fees as per the law, they now have to pay the difference based on the new expensive and crippling fee structure.

For the six largest internet Radio stations (Pandora, Yahoo, live365, Real Networks Inc, AOL and MTV Online) this equates to 47 percent of their combined revenue for 2006 (or $37.5 million) in new royalty rates. Imagine what this will do to the small struggling stations and not-for-profit stations!

Our only hope now is for the Internet Radio Equality Act to make some ground in the senate, if not it will be time to start shopping for servers in Europe and Canada.

Source: Reuters.

UPDATE: I have been informed by Mark over at Party107 that even though the appeals court has denied the delay, SoundExchange themselves have realized how stupid the fee's are and have announced, in front of congress that they will not be enforcing the new royalty rates while they work with online radio to come to an agreeable rate. This is only a reprieve and we won't be entirely safe until we have acceptable rates for Internet Radio in the United States.

Source: Wired Blog