Round 2:  CARP is Rejected by Librarian of Congress 30 Day Clock is Now Ticking

Mary Beth Peters, Registrar of the Library of Congress and Dr. James H. Billington, Librarian of Congress issued the ORDER today at 10 AM Eastern Time rejecting the CARP webcasting rates presented on February 20, 2002. Now the LOC has 30 days to make their own Ruling on the matter which should be out on or before June 20, 2002.

It appears that the Public Roundtable held on May 10, and the flood of letters sent to the LOC made a definite impact on the decision makers (including the LOC and the Senate Judiciary Committee.) They learned first hand from the statements made to the LOC and Senate Committee that all webcasters, not only the large well funded ones, had not been given a fair and reasonable hearing. The LOC learned that if they adopted the Ruling of February 20, 2002 a considerable number of webcasters, including non-commercial and college webcasters, would have been put out of business.

By hurting the small independent webcaster who had been shut out of the Ruling process would have been a clear cut case of averting the wishes of the Judiciary Committees wishes by adversely hurting small business.

Passion clouds the facts: the other major item the Roundtable exposed the LOC to was the fact that RIAA and the Webcasters had come to some agreements on the entitlement of the artists to be paid something for their works, and agreement regarding the problems surrounding the original reporting requirements. The solutions are not clear cut, but the potential for compromises were set out at the Roundtable.

At this point we have a 30-day waiting period to see what the Librarian of Congress is going to rule.

From where I sit everyone needs to maintain our honest resolve for a long term solution. Most do not understand that this CARP ruling is only good for a 2 year period that is ENDING this year. We actually should be working on negotiating the next two year CARP rates now. But because this Order is precedence setting in order to establish rates, the new CARP II rates will end up being delayed until they have something concrete to discuss.

Hopefully RIAA and the Webcasters will get together to discuss some voluntary compromises as well. As Bill Goldsmith of KPIG.com and RadioParadise.com put it,

" The record labels can either play fair now - or be forced to by Congress and the Copyright Office."

Because if the Ruling is unsatisfactory to any of the parties, even after the Librarian of Congress issues it in June 2002, the new CARP rates could end up in the Washington, D.C. Court of Appeals for a hearing.

4:04:09 PM