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CARP: Solomon's Wisdom

NMC/Radio and Records eChart main column as published in the 6/28/02 issue of R&R There's a rule of thumb that says when one is forced to decide between two bitter opponents, and your decision angers both sides, you've probably done the right thing. Nothing could be further from the truth when it comes to the final ruling on what are becoming commonly known as the CARP fees.

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This past week's ruling will be remembered, if not changed through appeal or litigation, as the day the online streaming music died. Or at least, was mortally wounded. The Librarian of Congress has basically split the difference between what was rejected in May and a more palatable solution that would have helped keep some webcasters in business, while rejecting out of hand any sort of revenue-based fee structure.

The reason? A sort of begging-the-question circular logic analogy: no fee structure that is based on income could possibly work, since the vast majority of web streamers are not making any money, with the unspoken conclusion that the final CARP structure puts those pesky small streamers out of business anyway. The streamer's request was not just a revenue-based solution, but a combination of a revenue percentage and a base $200 to $1000 per year for anyone to play the game. The LOC ignored that option, and didn't even refer to the minimum in their ruling.

Here's the crux of the issue: it appears from the ruling that the Librarian based their decision on one sample "deal" made between Yahoo! Broadcast and the RIAA. The fact that that deal is a bad deal given today's market conditions (and was a bad deal back in 1998-99 when it was cut) matters little. Back in those days, you'll recall that Internet radio was due to kill off traditional broadcasters and leave a trail of corporate blood in their wake as they decimated the evil broadcasters that played nothing but pap, and brought to the people the music that mattered.

Well, that didn't happen, did it? No, terrestrial radio is still king, and satellite radio took less than 6 months to eclipse the number of listeners online. So much for the aesthetic online revolution, at least this time around, but that didn't stop the Librarian from using the rules we were all hearing was the New New Thing 3 years ago in making their misguided and disappointing decision. Yahoo! Broadcast is a shell of their former selves, having changed hands for billions of dollars, now struggling to find any audience and revenue that matters. Even Yahoo thinks this decision is bad.

It's not really the LOC's fault: they have to do their job, as with most inflexible red-tape laden bureaucracies, within the letter of the regulations that govern them. In this case, they were simply following orders. The end result? The same sorts of casualties that have resulted from other government workers in history just "following orders."



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