Authors
Alain de Fontenay - de Fontenay, Savin & Kiss
Eric de Fontenay - Tag It, MusicDish, Mi2n
FREE DOWNLOAD
Read the Abstract
Prior to CARP releasing its recommendations, we had
considered that the debate would center around the standard
questions of high v. low rates, per-performance v. revenue-based
royalty structures, and reporting requirements. As such, the
discriminatory rate structure in the CARP proposal came as an
unexpected surprise. But what had particularly caught our
attention was the flawed methodology used by CARP to arrive at
the proposed royalty structure. The report relies on what can only
be described as a "house of cards" built on untested assumptions
and contradictory findings to justify its recommended rate
structure.
Determining that the Librarian of Congress WOULD NOT remove the
royalty rate discrimination provision between webcasting and
simulcasting, we decided to prepare an in-depth analysis
addressing one simple question: "What are the merits or damages,
if any, that are derived from benchmark that are based on a price
discrimination between simulcast and webcast?" The result is the
following paper "Webcasting, An Unequal Opportunity Market:
Peering through The Copyright Office's Royalty Rate Proposal,"
which we are releasing to coincide with the Librarian of
Congress' final rules.
We therefore felt a mix of surprise, satisfaction and slight
disappointment for 'bursting our bubble' so to say. All in all
though, were pleased to realize that the Librarian of Congress
used much the same arguments as those introduced by the paper.
We vigorously disagreed though in our paper with the Librarian of
Congress' agreement with CARP that the RIAA/Yahoo! agreement
"represented the best evidence of what rates would have been
negotiated in the marketplace between a willing buyer and a
willing seller" While the discriminatory rate structure was
rejected despite this finding, we are concerned that it could
come back to haunt particularly small-to-medium webcasters in the
future. This could for example set a precedent in determining
rates for interactive services.
