Group Seeks Streaming Royalty Exemption In Federal Court

A complaint filed this week in U.S. District Court in Harrisonburg, VA could, if successful, upend not only how radio stations stream their signal online, but also radically change how much broadcasters pay in streaming royalties.

InsideRadio is reporting Virginia owner VerStandig Broadcasting claims the Copyright Act in effect gives broadcasters the right to distribute their content without paying a royalty for up to 150 miles from the station’s transmitter.  If upheld by the courts, it would mean stations that use geo-fencing technology could stream their stations to listeners within that 150 mile radius free of royalty fees.

“When Congress adopted the 150-mile exemption more than a decade ago, data sent over the internet could not be restricted to recipients in specific physical locations,” VerStandig says in petition, telling the court.

“A recent technological development called geo-fencing now makes it possible to restrict data sent over the Internet to recipients in specific physical locations.”  

VerStandig says it plans to start streaming two of its FMs, using geo-fencing to carve out a smaller, 75-mile coverage area that would be “practically simultaneous” with the footprint of the on-air signal.

But before it goes through the expense of doing that, it’s seeking a declaratory ruling from a federal judge saying SoundExchange has no right to collect royalties for the webcast.  

SoundExchange has not yet filed a response to the lawsuit.

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