Despite a huge outcry from the internet radio community over new royalty rates set to take effect on May 15th, a panel of judges has rejected a request to reconsider those rates.

The Copyright Royalty Board decided not to postpone the May 15th implementation date, or to hear an appeal. The judges did agree to let webcasters temporarily calculate fees by average listening hours, rather than by each time a listener hears a song.

But that's not going to be enough to save many small and non-profit webcasters like Pandora, Last.fm and Radio Paradise who say the new rates could put them out of business. A coalition of internet broadcasters will continue to push Congress for intervention, but the chances of any action being taken before May 15th are slim.

[via Techdirt]

The Copyright Royalty Board wants to more than double the amount of money internet radio stations pay to license the music they stream online over the next four years. For many webcasters, the new fees could be enough to put them out of business.

Bill and Rebecca Goldsmith, who run Radio Paradise, have started a new blog, with a detailed explanation of the impact the new rates would have on small webcasters. While both internet and traditional radio stations pay royalties to artists and songwriters, only online webcasters have to pay royalties to copyright holders. That's because Congress bought the argument that streaming audio is no different from MP3 downloads, in that both make high quality digital audio available to users who can then save copies on their computer.

Of course, you could also record broadcast radio onto a cassette or CD if you have the equipment. And while it's not that difficult to find software allowing you to save internet broadcasts, the product you wind up with typically isn't nearly as good as what you'd get from iTunes or BitTorrent. The songs run into one another; may or may not include metadata; you don't get full albums.

At the very least, internet and terrestrial broadcast radio stations should be subjected to the same fees. But the truth is that while companies like Clear Channel could easily afford the new fees, small stations like Radio Paradise cannot. And I think the world needs small non-commercial stations to broadcast music that might be hard to come by otherwise. Something copyright holders have never seemed to understand is that internet radio serves the same promotional purpose as broadcast radio. If you hear a song you like, perhaps you'll go out and buy it.