Wilhelms: "Fair and reasonable" misleading characterization of CRB
·May 15, 11:03 AM
Posted by: Paul Maloney
 From P2PNet: "The imposition of the ruinous rates set
by the Copyright
Royalty Board (CRB) on webcasters has been postponed until
July 15 from May 15. This gives everyone a little breathing room,
and a chance to sort out where everyone stands.
"There
are multiple fronts in this critical battle. Judicial
appeals from the CRB ruling have already been filed by
some webcaster groups, and others expect to join in before the deadline
this week. A number of observers believe
that the court will immediately stay the effect of the
new rates. That restraining order could come as early as June 1,
well ahead of the effective date of the CRB decision…
Congress has a right to fix
underlying problems in process
"…[T]here’s the battle over IREA… The webcasters
should be encouraged… by the intensity
of the counter-rhetoric being put out by SoundExchange  as more representatives sign on…
"In a piece that ran last week on BusinessWeek.com [RAIN coverage here],
John Simson said: ‘In short, the CRB did what
Congress asked it to do,at the behest of Webcasters.
But when the CRB set what it judged to
be fair and reasonable royalty rates, the Webcasters
decided they were too high, cried foul and denounced the very process
they had sought.’
"The statement is misleading
on several levels.
"Ostensibly, fair processes sometimes
bring about unfair results. Sometimes, what looks on
the surface to be a fair process turns out to have some underlying
problems that skew the results or have consequences that
were unanticipated when  the
process was set up. That’s why appellate
courts exist. That’s why we have the right
to petition and recall. That’s also why Congress is given
the power to amend previous laws…
"Those peculiar criteria the CRB applied were established by Congress in the DMCA. Despite
Simson’s wrongheaded insistence, there’s nothing in the DMCA that requires the CRB to consider whether or not the rates were ‘fair and reasonable.’Instead, the DMCA says  the CRB shall set
‘rates and terms that would have been negotiated in the marketplace
between a willing buyer and a willing seller.’
"There’s nothing intrinsically ‘fair and reasonable’ about that market standard. Given
the unequal bargaining power of buyers and sellers in the relevant marketplace, it’s no wonder
that, by applying the standard, the CRB came up with rates
thatwill drive most of the ‘buyers’ off the air…
"The CRB did its appointed job. It applied the standards
the DMCA required it to, and it didn’t
 care whether or not the impact of the decision was ‘fair
and reasonable.’..
"Congress is completely within
its rights to review what it did a decade ago and determine
if what they did was right, and if they did it the right way. The
webcasters, large and small are completely
within their rights to seek redress from Congress, even
if John Simson thinks it’s unfair of them to challenge the CRB.
SoundExchange would have Congress ignore
the sheer idiocy of charging license fees greater than
the aggregate revenue of the entire industry just because the CRB
followed the existing law in setting those fees."
Fred
Wilhelms is an entertainment attorney based in Nashville,
Tennessee. The second part of the above article will appear in tomorrow’s issue of RAIN.
Read Wilhelms‘ entire article at P2PNet here.
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