Royalty Reates for WebCasting Ruled Unconstitutional

July 9, 2012
A U.S. Court of Appeals has ruled that the Copyright Royalty Board (CRB) is unconstitutional, thus putting the CRB’s previous royalty rates for webcasting into question. The ruling came down due to a lawsuit against the CRB and SoundExchange by the Intercollegiate Broadcasting System (IBS), a non-profit organization that represents college and high-school webcasters.Reuters reports that the Court found that the three-member CRB, which is appointed by the Librarian of Congress, “violates the Appointments Clause of the Constitution, which requires officers with significant authority be appointed by the president with Senate confirmation.” However, the Court of Appeals added this issue could be fixed by giving the Librarian of Congress the ability to fire the judges on the CRB.

“With such removal power in the Librarian’s hands, we are confident that the Judges are ‘inferior’ rather than ‘principal’ officers, and that no constitutional problem remains,” wrote Judge Stephen Williams.

Following the decision, the IBS could request a new rate hearing for non-commercial Internet radio stations. However, Billboard.biz notes that a challenge to previous CRB rate decisions could be unlikely, since the Court of Appeals offered a solution to the Board’s unconstitutionality. The Court’s ruling also did not address the IBS’ arguments regarding the royalty rates themselves.