The case has been filed in Pennsylvania by the National Association of Broadcasters (NAB) and others.
While broadcasters already pay royalties to artists for songs they play, they have always been exempt from paying record companies for radio broadcasts. The December ruling means they have no such exemption for internet broadcasts. Internet-only broadcasters already must pay royalties to record companies.
In the lawsuit, the NAB claims:
“Broadcasters desiring to stream over-the-air programming would be forced either to engage in a multiplicity of individual negotiations with the copyright owners of every sound recording they stream (with the right of any such copyright owner to withhold license authority) or, if, but only if, they qualify, to secure a compulsory license covering such streaming.”
The NAB adds that the onerous conditions of qualifying for such a compulsory licence make this a “far from certain” option and the overall effect of the ruling is likely to stifle on-line broadcasting.