Volume 65, Issue 5, 1419-1440
Each month, over 100 million Americans listen to and discover music through Internet radio stations. Section 114 of the Copyright Act requires Internet radio stations, as providers of digital radio transmissions, to pay performance royalties. Due to an outdated royalty determination method, these Internet radio stations regularly spend over half of their revenue to secure royalties for the songs streamed through their websites—far more than paid by digital radio stations. The Internet Radio Fairness Act sought to equalize the royalty rates paid by Internet radio services and their digital counterparts. Unfortunately, due to fierce lobbying, the bill has been abandoned and Internet radio stations continue to face challenges to securing fair and reasonable royalty rates. This Note first seeks to explore the history of U.S. copyright legislation to better understand how we have reached such disparate royalty determination methods. Subsequently, this Note considers the arguments against uniform digital radio royalty schemes and discusses how the abandonment of the Internet Radio Fairness Act was a missed opportunity as passage of the Act would have provided Internet radio stations with the financial flexibility required to make technological advancements that could benefit all relevant parties.