Judge: Dismiss VerStandig's 150-mile Royalty-Free Streaming Case

A Federal magistrate has recommended dismissal of VerStandig Broadcasting's 150-mile royalty streaming case.

The recommendation could end VerStandig Broadcasting suit against SoundExchange. The 27-page report by Magistrate Judge Joel Hoppe largely agrees with the performance rights organization’s pleadings, which argued the case should be dismissed because it never threatened legal action against VerStandig, which has yet to even put the geo-fencing technology in place.

In an April 2014 letter, SoundExchange “strongly urged” VerStandig to “abandon geo-fencing, enter into statutory licenses, and pay royalties.”

The broadcaster told the court that was proof it could face copyright lawsuits if it didn’t obtain a license after geo-fencing a 150-mile radius around WTGD 105.1 FM Bob Rocks in Harrisonburg, VA.

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.  Geo-fencing allows web sites to restrict access to those within a certain geographic area.

SoundExchange collects and distributes royalties to copyright owners under the Copyright Act’s statutory license for the right to digitally perform sound recordings.

But Hoppe says he doesn’t see a SoundExchange letter to VerStandig as sufficient for it to consider a pre-emptive ruling holding the royalty collections agent at bay. He concludes at worst it was “noncommittal” and that’s insufficient to seek a declaratory ruling from the court.

Then U.S. District Court Judge Michael Urbanski can either accept the recommendations — a more typical outcome — or reject the report and allow the case to move forward.