In other words, come Sunday, when the new retroactive rates kick in, a lot of Web radio stations are screwed. Independent music outlet SomaFM said the rates amounted to a 3000 percent increase in payout, and the fees are retroactive to January 2006.

Opponents had hoped the Court of Appeals would postpone the payment due date until Congress had a chance to pass legislation to nullify the rate hike.

Legislation is still on the table, and SomaFM is asking Independent music fans to call their legislators. This is what they’d like to see happen:

1. A reasonable rate. The previous rate of 10% of the first $250,000
of revenue and 12% of revenues in excess of $250,000 is regressive
and designed to hinder growth. As revenues increase, royalties should
decrease, just like any other quantity discount. We think the rate
should start at 10% for revenues under $2 million, 9% for revenues
between $2-5 million, and 8% for revenues over $5 million. These
rates are in line with the rates currently paid by satellite radio.

2. A sensible term. A settlement that last for just 2 years is
completely unacceptable. A suggested term would be through the end of
2010, with a right by either party to extend for another 3 years
after that.

3. Increased revenue caps. The RIAA defines small commercial
webcasters as entities with less than $1.25 million in annual
revenues. Exceeding this amount in a calendar year would disquality a
webcaster for paying based on a percentage of revenues, and force
them to pay on a per song, per listener basis which would be multiple
times their annual revenue. This cap needs to be raised if the
webcasting industry is to be allowed to grow. Revenue caps this low
will force small webcasters to constrain their growth or else face
debilitating royalty liabilities. We think this cap should be raised
to $10 million. The US Small Business Administration "Table of Small
Business Size Standards" defines a small traditional radio
broadcasting network as a company with less than $6.5 million in
annual revenue (and no limit to the number of employees). An internet
broadcasting service is considered a small business if they have less
than 500 employees and no revenue limits.

4. Common-sense reporting requirements. Broadcasters would be
required to report either the ISRC, or if not known, the Artist,
Track Title and Album Name.

5. Congressional "codification" of the settlement. Congress will need
to endorse this settlement and put it into law.

Webcasters staged a day of silence on June 26 to protest the rate hikes, arguing that they could be put out of business. Though the silent message was sent loud and clear, the CRB doesn’t appear to have been listening, and so far, neither have the powers that be.

The likelihood that Congress will pass legislation to nullify the hikes, proposed in both the House and Senate, in the next four days seems slim, but that hasn’t stopped numerous organizations from pleading for citizens to contact their legislators to push it through.

Radio and Internet Newsletter (RAIN), the group that organized the day of silence, has filed an emergency stay with US Court of Appeals in the hopes to delay the hikes until Congress can pass legislation.

Independent radio station SomaFM is trying to rally the troops as well and says that the royalty rate hikes amounts to a 3000% increase in costs, with royalties costing them as much as $600,000 for 2006.

"Our costs for music are set to go up 30 times what they used to be. Even if we’re playing the same songs. That doesn’t make any sense at all," says Rusty Hodge, Founder and General Manager of SomaFM.com. "The RIAA’s refusal to make a reasonable settlement with small commercial webcasters is an insult.

"The RIAA keeps saying that most webcasters are billion dollar companies, but with the exception of AOL, Yahoo and Real, most of the top-20 music webcasters are privately-held, independent operations. The RIAA is willing to let independent webcasters be the collateral damage in their battle to extract more control over the large webcasters."
 
Some have argued that those same large corporate presences have been dragging their feet in the fight, willing to let Sunday’s deadline weed out competition. After that, they can begin waging lawsuits, a luxury smaller entities won’t have.

The Seattle Times has called the CRB’s rate hikes an "assault on one of the last escapes from bland commercial radio." The editorial also notes that it will not just be small Internet radio stations, but also public broadcasters that stand to suffer.