About That Small Webcaster Proposal You Sent

A fishy smell is now emanating from a modified small webcaster proposal, floated recently by SoundExchange.

The proposal, leaked to Digital Music News late last week, offers easier terms for the smallest “microcasters,” among other modifications.  That sounds like progress, though the last paragraph of the letter is stirring an unfavorable reaction.

If the smaller webcaster is acquired by a larger entity, then the acquired broadcaster is required to pay full statutory rates retroactive to 2006.  But by accepting the current terms, smaller webcasters would be severely limited in the acquisition deals they can accept.  “Further, the small webcaster taking this deal may not sell to any entity that is or will participate in a proceeding to set rates and terms for webcasting,” the proposal stated.

Those are uncomfortable handcuffs, even if the prospects of a sale are slim.  “It raises questions about the fairness of the entire process if you are going to subject people to certain rates, but then prohibit them from exercising basic rights to challenge those rates,” one broadcaster told Digital Music News.  The parties are working against a February 15th deadline.