High school radio stations are used to operating on shoestring budgets. But new webcasting fees leveled by the Librarian of Congress and the U.S. Copyright Office could force many school-sponsored, online radio programs to take their last requests.

In June, the U.S. Copyright Office announced that radio programs that stream copyrighted recordings over the internet must pay royalty fees to musicians and music labels. Although there is a minimum fee of $500 for smaller broadcasters, the fee system is retroactive to 1998. That means many K-12 stations could be asked to pay upwards of $2,000 to maintain their broadcasting rights this year.

The additional fees come as a jolt to proprietors of K-12 radio stations across the nation. eSchool News found broadcasters from Massachusetts to California were surprised to hear school-sponsored webcasts fell under the scope of the ruling.

WAVM (91.7 FM) has been broadcasting out of Maynard High School in Massachusetts since 1973. Today, that station broadcasts on-air and over the web five days a week during the school year. The station enlists more than 150 students to help produce its programming. But its coordinator, Joe Magno, said he had no idea the new royalty fees would apply when WAVM takes to the airwaves Sept. 23.

“This is the first I’ve heard of anything like this,” Magno said. Any additional royalty fees would be a problem for the program, he added.

Magno declined to speculate whether his station would have to terminate its internet broadcasts if it were made to pay additional fees. But the U.S. Copyright Office actions “could potentially have serious consequences,” he said.

Michael Jackson, coordinator of radio media studies at Fremont High School in California, said he had heard of the new fees but was under the impression they would have little or no impact on his school’s program.

“My understanding is that, as of now, we don’t have to pay,” Jackson said. “That our liability is minimal.”

But that’s wishful thinking, according to Susan Grimes, a Copyright Arbitration Royalty Panel specialist with the U.S. Copyright Office. K-12 broadcasters are mistaken if they believe the fees do not apply to their schools, she said. Grimes said school-sponsored radio broadcasts are non-commercial entities, or non-CPBs, and they will be expected to pay.

Grimes said the Copyright Office has been inundated with phone calls about the new stipulations since the addendum to the rules was posted to the Federal Register June 20. But she could not say how many calls were received from schools.

Anthony Reece, broadcast director for MediaTech Productions Inc. and the K-12 Radio Network, said the fuss over royalties is more than mere speculation. “Webcasters are going belly-up a dime a dozen,” he said.

The new Copyright Office rules say non-commercial radio stations that broadcast over the air and via the web using proper Federal Communications Commission licenses will be charged at the rate of 2 cents per listener for every 100 songs they play. That doesn’t include an 8.8 percent fee for the use of ephemeral recordings—temporary copies made to stream music over the internet. But webcasters will have to pay above the $500 minimum only if their total fees exceed this initial payment.

Although the rates imposed on non-commercial radio stations pale in comparison to the 7 cents per hundred songs that commercial entities must pay, there also is the problem of unforeseen costs associated with stringent record-keeping requirements, which will place additional strain on K-12 broadcasting budgets and human resources.

To comply with the fee structure, stations must provide resources to track each copyrighted song that is played online, including song title, artist, album title, number of times played, and the marketing label of the sound recording.

Under the new fee structure, stations that wish to report accurately also must be able to gauge the number of simultaneous listeners who tune in over the web at any given time. Reece said this requirement alone would be enough to bankrupt some stations.

In reality, he said, the process will evolve into an inefficient honor system among broadcasters, one that cannot accurately calculate how many online listeners were tuned in to any one song at any given moment.

“I think the whole system is a mess,” Reece said. “It’s going to be a guesstimate.”

Although it’s an honor system, broadcasters won’t find it easy to circumvent the costs, said Gary Greenstein, an attorney for the Recording Industry Association of America and SoundExchange—the company responsible for collecting and distributing royalty checks to major labels.

For any radio station to operate, Greenstein said, it must first file a “constructive notice of intentions,” which registers its existence with copyright officials. Competitors and curious royalty collectors can use these filings to keep tabs on every station that plays copyrighted music across the web.

Some K-12 broadcasters agree the additional fees and record-keeping requirements could lead to disaster.

“What robbers,” Fremont’s Jackson said. “It would be a dagger in the hearts of our students if we could not continue our broadcast.”

At this urban high school in Oakland Unified School District, students enrolled in the school’s Media Academy have been using the internet to broadcast a student-produced radio program for more than two years.

The Media Academy is hooked to the internet via a T1 line, and students broadcast Tiger Radio daily from a portable classroom located behind the school building.

Although Jackson said he wasn’t sure yet what impact the new fees would have on his school’s radio station, there are ways for stations to skirt the potentially hazardous costs, he said.

Jackson acknowledged that the webcasting fees more than likely would prohibit his school’s station from playing full-length songs. “We could go with the 45-second approach,” he said. That means the station would broadcast only part of a song and then tell listeners they would have to purchase the recording if they want to hear more. Under current copyright laws, stations are permitted to play brief sections of songs without making royalty payments, he said.

Jackson also suggested that school radio stations look to broaden programming horizons over and above musical broadcasts.

“We are looking to become much more of an outlet for non-traditional journalism,” Jackson said. Some of these approaches include live interviews, talk radio shows, and commentary.

The other option schools have is to seek a copyright waiver from each artist on their play list. But that’s an effort Reece said would be in vain. “Springsteen doesn’t have time to sign a thousand radio waivers,” he said. “That would never work.”

Reece’s company, MediaTech Productions Inc., operates the K-12 Radio Network. The program, which started in Colorado, will branch out nationwide this year, providing an opportunity for school districts that can’t afford to maintain their webcasts to keep students involved in radio.

The program will be a combination of music, commentary, and talk radio for students to learn the ins and outs of radio operation and to discuss their problems and emotions with others like them. Although the program will be produced by the company—and not by students—kids will have the opportunity to co-host the shows and choose much of the content.

Because MediaTech is a for-profit company, Reece said, it has the advantage of being able to generate revenue through advertising, a practice non-commercial broadcasters—including schools—are prohibited from doing.

The new copyright fees are part of an industry-wide effort to increase profits in the face of the digital downloading phenomenon, where songs are copied and shared for free across the web—a practice record companies say is costing them a fortune in music sales.

“Record labels were feeling the heat of digital music being copied,” Reece said. “They say sales are declining because of pirated music.”

But Reece says proponents of the fee-based system are hurting themselves as much as they are hurting webcasters. “Let’s face it, four out of every 10 people listen to online radio,” he said.

Now that online listeners are logging on in droves, the recording industry no longer can contend that webcasts are anything but free advertising for musicians signed to major record labels. “It’s a Catch-22,” he said. “They are only hurting themselves.”

Others opposed to the new rates argue that webcasting charges mean broadcasters are being billed twice for the same copyrighted recording.

Radio broadcasters who play music over the air already pay copyright fees to music labels based on the stations’ revenue, said Mike Black, director of Collegiate Broadcasters Inc.

“It’s a distortion of the intent of the original [copyright] act,” Black said. Once a station has paid a copyright fee for music, he argues, it should be able to broadcast those songs in any form, whether on-air or across the web.

Black said he expects even the smallest high school and college stations eventually will be forced to pay an additional $600 to $700 a year minimum for the new webcasting rights.

According to the Copyright Office, the new fee structure officially took effect Sept. 1, with payments expected for all pre-September royalties due by Oct. 20. The agency said all payments for songs broadcast after Sept. 1 will be due 45 days after the start of each month.

But, because of the number of appeals pending against the new fees, Reece and Black both agreed it will be much longer before the new rules are nailed down and enforced.

Links:

U.S. Copyright Office
http://www.loc.gov/copyright

Maynard High School’s WAVM
http://wavm.org/radio

Fremont Media Academy’s Tiger Radio
http://www.media-academy.net/main.html

MediaTech Productions Inc.
http://www.mediatechproductions.com

K-12 Radio Network
http://www.k12radionetwork.com/site/home.asp

Collegiate Broadcasters Inc.
http://www.collegebroadcasters.org

Recording Industry Association of America
http://www.riaa.org

SoundExchange
http://www.soundexchange.com