AMS News

Thursday, March 15, 2007

Fee increase entangles Net station launches

The Post and Courier By PRENTISS FINDLAY

MOUNT PLEASANT - A locally based radio company is proposing to launch at least 50 Internet stations by April 15, while protesting higher fees that will drive up the cost of doing business for fledgling online broadcasters.

American Media Services said three of the stations are already operating. They are, and

"We have committed hundreds of thousands of dollars, hired staff members and created a business plan that shows that this will be a viable venture," said Edward Seeger, president and chief executive officer of AMS.

The company, headquartered on Chuck Dawley Boulevard, is proceeding with the rollout despite a ruling last week that increases by at least tenfold the royalties that Internet stations must pay to play music.

"We are organizing a vigorous appeal effort to repeal these outrageous fees," Seeger said.

In the decision, a three-judge panel that constitutes the Copyright Royalty Board of the Library of Congress ruled in favor of SoundExchange, an organization with members that include major record labels and their artists.

Seeger said Internet broadcasters are using lobbyists and political contacts in an effort to have the decision overturned.

"Hopefully, common sense and understanding that a fair rate of compensation for royalty payments will allow the full development of this new technology to reach its full potential with the establishment of a rate that will not kill this emerging technology," he said in an e-mail.

Reed Buzel, president of the AMS's new Internet division, said in an interview Wednesday that he was in the process of contacting members of Congress about the issue. He said Internet radio broadcasters will seek to have the fee ruling suspended, and then work to overturn it.

"We firmly believe that the decision will not stand," Buzel said. "When you apply it to a nascent industry it's a death knell."

AMS has regional offices in Austin, Chicago and Dallas. In addition to its new Internet division, its developmental engineering division leads the country in implementing radio station upgrades, according to its Web site. AMS also is considered a major player in the radio-station brokerage business.

Locally, the company is not the only online radio pioneer worried about the new regulatory obstacle.

Bunky Odom, founder of a new Internet station on Sullivan's Island, said last week his media venture would be crippled if the royalty ruling stands as is. Odom's has been in development since last fall, and he planned a major launch of the station at the end of the month.

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