Friday, June 21, 2002

Complaints about CARP It's hard to fault journalists for not having a clue when none of the "expert" commentators do either. The US Government has set a rate of $0.0007 per song per listener mandatory royalty rate for web-casting, and small web-radio stations are complaining it's too high. The truth of the matter is that only a market can determine the correct price of something, and the real problem with the Government's rate is that it's mandatory. Some artists might want to set a lower rate for their material (say, $0) or even pay web radio to broadcast it, but with the current structure there is no way they can compete. While the Government claims to be mimicing "market rates", what they've actually done is destroy the market by eliminating competition through mandatory rates. Instead of squabbling over what the price should be, web-radio should have insisted the final rate would be a ceiling and let the market clear.

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