From CNet News: "A key Democrat in the U.S. House of Representatives on Wednesday slammed new federal rules that would require many Internet radio services to pay higher fees to record companies.

"Rep. Edward Markey (D-Mass.) had harsh words for a ruling released Tuesday by the U.S. Copyright Royalty Board…

"‘This represents a body blow to many nascent Internet radio broadcasters and further exacerbates the marketplace imbalance between what different industries pay,’ Markey (pictured) said at a hearing here titled ‘The Future of Radio’. The hearing was convened by the House panel on telecommunications and the Internet, of which Markey is chairman. ‘It makes little sense to me for the smallest players to pay proportionately the largest royalty fee,’…

"The CRB’s decision has imperiled Webcasters by widening the gap between what Internet radio and satellite radio services must pay, RealNetworks general counsel Robert Kimball told politicians. He was also speaking for the Digital Media Association,…

"If the decision is not overturned, ‘one can easily imagine Web radio looking more and more homogenized,’ Kimball said. That’s because the higher rates may force Internet radio operators to reduce the number of songs they carry or increase their advertising prices and frequency, which could make it a less desirable place for advertisers to invest, he said.

"Kimball suggested the proposed merger between XM and Sirius should be put on hold until Congress ‘corrects the Copyright Act’s bias against the Internet,’ thereby allowing Internet radio companies to compete more fully with satellite firms.

"For instance, the Copyright Act prohibits Internet radio from offering its own recording devices and portable radio devices, but it does not levy the same restrictions on other radio services, Kimball said…

"Rep. Anna Eshoo (D-Calif.) said she believes Internet radio could face threats from another source: ‘broadband providers who have the ability and  incentive to limit consumers’ access to the content of their choice.’ She called for passage of Net neutrality legislation, which failed to pass Congress last year, that would prohibit such a practice."

Read the entire article at CNet News.

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