Conflict With SoundExchange
In May 2002, the DMCA CARP rate ruling came into effect, requiring internet broadcasters to pay a per song per listener royalty to SoundExchange for the performance of the sound recording, retroactively through October 1998. Hodge estimated that the station could have been forced to pay over $1,000 USD per day to continue operations. The royalty was later reduced by half, but that rate still would require payments by SomaFM that exceeded their revenues.
In June 2002, SomaFM ceased broadcasting. Hodge was one of several webcasters who testified before the U.S. Congress in 2002 in the hopes of reducing the royalty rate.
Subsequently, Congress passed the Small Webcaster Settlement Act of 2002 (SWSA) on November 15, 2002, which enabled small webcasters to negotiate a lower rate with SoundExchange. SomaFM resumed broadcasting in late November 2002 under this new royalty structure.
On June 26, 2007, SomaFM participated in the "Internet Radio Day of Silence" in protest of the Copyright Royalty Board's recent decision to raise royalty fees for internet radio stations.
As of December 2008, SomaFM has not yet settled with SoundExchange.
Read more about this topic: Soma FM
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