UPDATE: COLLEGE RADIO FEUD ERUPTS OVER ONLINE STREAMING ROYALTIES

Last October we reported on a nasty feud between two college media organizations over noncom royalty fees paid to SoundExchange for online music streaming. Intercollegiate Broadcasting Systems (IBS) complained about a new fee structure approved by the competing College Broadcasts Incorporated (CBI).

IBS filed suit to nullify the $500 minimum annual fee for college radio broadcasters and webcasters.  IBS felt that when CBI agreed to the $500 fee, they and SoundExchamge set a defacto price for all college broadcasters at the expense of IBS members.  CBI was not involved in the lawsuit but they were the likely target. IBS said in its suit the $500 fee was too high and the way is was determined was improper.

The D.C. Circuit on Tuesday 8/14/15 upheld the $500 minimum annual fee for college radio broadcasters and webcasters, finding that IBS had failed to show any impropriety in setting the rate. 

The Court held that the $500 minimum fee itself wasn’t arbitrary, capricious or excessive. IBS was pushing for a $20 minimum fee for “very small” broadcasters.  Here is our earlier post:

Originally published: Thursday, October 23, 2014

COLLEGE RADIO FEUD ERUPTS OVER SETTLEMENT FOR ONLINE STREAMING ROYALTIES

A pending settlement reached earlier this month [October 2014] between College Broadcasters, Incorporated (CBI) and SoundExchange doesn’t sit well with Fritz Kass, CEO of rival organization Intercollegiate Broadcasting Service (IBS).

In a recent e-mail, Kass alleged:

 

FRITZ KASS • IBS

It is quite possible that SoundExchange makes, has made, payments to CBI, which in turn help fund the CBI Executive Director [Will Robedee], and perhaps others. CBI and CBI's Executive Director may have a personal stake in the outcome of these proceedings.

CBI reached the proposed settlement with SoundExchange that, if ratified, will keep royalties CBI member stations pay for online steaming rights the same as current rates for the next five years. The agreement sets the annual cost for CBI’s members at $500.00 per year, plus a $100.00 fee as a proxy for not reporting certain performance broadcasts.

IBS could have reached a similar agreement with SoundExchange but Kass protested saying $500.00 is too high for IBS members. The two organizations compete for members. CBI’s agreement with SoundExchange may increase the perceived value of CBI membership. Kass says the CBI agreement could affect all noncommercial broadcasters:

[SoundExchange] by agreement with CBI has established a "market place" noncommercial rate of $600 per stream. If the CBI becomes the noncommercial standard, as SoundExchange has proposed, then [fees paid by other noncom broadcasters] would more than double per stream.

WILL ROBEDEE • CBI

CBI and IBS are small organizations that rely on membership fees and revenue from conferences.  Annual revenue for CBI in 2012, according to filings with the IRS, was around $72,000. IBS reported annual revenue for 2013 of around $55,000. Both organizations rely on volunteers, though CBI does pay part time Executive Director Robedee.

Relations are not warm between Robedee and Kass. In an October 15, 2014 email, Kass said:

I am in no way connected financially to either the broadcast or music industry. I have no stake personally in the outcome of setting webcasting rates. That is not true of the Executive Director of CBI [Will Robedee], who according to his sworn testimony, is paid by CBI. There may be other recent payments from SoundExchange to CBI for conference exhibit/sponsor fees, etc. It is quite possible that SoundExchange makes, has made, payments to CBI, which in turn help fund the CBI Executive Director, and perhaps others. CBI and CBI's Executive Director may have a personal stake in the outcome of these proceedings.

Robedee declined to comment on the statement by Kass.

SoundExchange is a 501c6 organization entrusted by the Copyright Royalty Board to collect and distribute digital performance royalties from noncommercial broadcasters and webcasters. SoundExchange currently has agreements with several organizations: the Corporation for Public Broadcasting, on behalf of NPR, APM, PRI and PRX, the National Federation of Community Broadcasters (NFCB), and the National Religious Broadcasters (NRB). IBS, as well as other noncom organizations, are involved in litigation with the Copyright Royalty Board over rates and terms for 2016 – 2020.

IBS won a recent DC Circuit Court case challenging the constitutionality of the Copyright Royalty Board’s decision process. Representatives of CBI and IBS declined to comment on the litigation. IBS is involved, and has been involved, in litigation before the US Court of Appeals (DC Circuit) since May 2007 over the $500 minimum performance royalty rate ordered by the CRB for all commercial and noncommercial web streams.