Radio stations streamed over the Internet that restrict their audience to a 150-mile radius through geo-fencing should not have to pay copyright royalties to SoundExchange, according to a Declaratory Judgment Complaint filed Wednesday in the United States District Court for the Western District of Virginia.

SoundExchange collects and distributes royalties to copyright owners under the Copyright Act’s statutory license for the right to digitally perform sound recordings.   A group of radio broadcast stations in Harrisonburg, Virginia owned and operated by VerStandig Broadcasting claims that based on an exception in the Copyright Act, SoundExchange does not have the right to such royalties when Internet streams of the stations’ broadcasts are restricted to 150 miles from the stations’ transmitter.

Geo-fencing allows web sites to restrict access to those within a certain geographic area.  For instance, if you try to access MLB.tv in Baltimore to watch an Orioles game, geo-fencing technology will use information such as your IP address or GPS coordinates to prevent access due to local blackout restrictions.  The Complaint avers that “Geo-fencing is a proven technology” that will “enable [the stations] to serve [their] local communit[ies] better.”  According to the Complaint, “More and more people want to listen to their favorite local radio stations on Internet-connected devices.  Some prefer the convenience; others live or work in places or buildings that, though they are within a station’s coverage area, are not easily penetrated by FM signals or do not have direct access to the station’s signal.”

A favorable ruling for VerStandig would provide precedent for other stations that seek only a local Internet audience for their Internet streams to follow suit.

The case is WTGD 105.1 FM v. SoundExchange, Inc., Case No. 5:14cv00015.

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