Jody is so right about ASCAP -- the Goliath of the music-licensing
business in the U.S. -- and its aggressive protection of its licensed
material used in unauthorized "public" performance.  And there is
utterly no question about whether ASCAP considers the Internet sites
"fair game" for additional revenue development.

A little background, then a suggestion to Karl Ellison and others
involved with music use on their web sites.

WCLV(FM), which I manage here in Cleveland, was one of the pioneers
of high quality "broadcasting" on the Internet.  Our web site
<www.wclv.com> includes a full-time, real-time, broad-band (to 15 kHz)
stereo stream of our Cleveland air signal.  We operate with software
("AudioActive") pioneered here in Cleveland.  The sound quality is
quite like listening to WCLV over the air.

When we started all this two years back, we told ASCAP what we were up
to and said we didn't consider this to be "broadcasting".  People
wanting to visit our web site come to us -- to our Cleveland server --
to read and to listen; we don't broadcast a signal in any conventional
way.  It is much more like point-to-point communication.  Essentially,
we asked ASCAP to leave us alone, and to tell us they would not come
after us later.

They didn't agree.

Web audio, ASCAP claims, is a separate (from broadcasting) and
unlicensed use of the material of their member Composers, Authors and
Publishers (ASCAP = "American Society of....").  And they unquestionably
wanted a license fee for whatever type of use one might choose to call
this new medium of communication.

Fair enough, we said.  In our commercial license with ASCAP, our radio
station pays a small (but significant in the number of dollars, believe
me!) percentage of our advertising revenue -- essentially a royalty --
in exchange for the right to play unlimited amounts of ASCAP-licensed
material.  So we'll be glad to enter into a similar agreement for
Internet use, we said.  They set up a sliding scale against revenue,
with a $500 annual minimum.

We signed up.  The agreement has since become generalized throughout
the radio business, applying to more than 1,000 commercial stations now
on the 'net with their air signals (mostly still at pretty poor audio
quality; sounds more like short-wave than FM).

Recently, ASCAP realized that nobody was making any money carrying a
radio signal alongside their web site, and that the $500 minimum was all
they were ever likely to receive from us and virtually all stations.
So they changed the rules: now, we pay a certain percent of either
revenue earned from the audio part of the site, or a certain percent of
the costs of operating the site.  Not so attractive to us -- and the
logic of the costs-based concept is lost on us entirely -- but we still
agreed.

There are other licensing organizations besides ASCAP.  Broadcast
Music, Inc. (BMI) is the other significant one -- it is sure to have
some of the roll material you are concerned about still under license.
SESAC is a much smaller player.  Neither has moved as aggressively to
reap from Internet activity as ASCAP has.

How likely is it that you can safely ignore all this nonsense?  Pretty
likely for the moment; you don't represent much of a revenue target for
ASCAP.  On the other hand, it's absolutely certain that what you're
doing now is unauthorized.  If ASCAP happened to pick on you as one of
their Internet test cases (sort of like being drawn for an IRS audit
of your tax payments), it could be very unpleasant.

I would guess -- and this does not constitute a legal opinion; it is
the guess of a commercial broadcaster -- I would guess that, at worst,
you'd be forced to sign a license agreement and pay for prior use back
to whenever you started streaming audio on your site.  There could be
penalties, too, but that sort of treatment is usually reserved for much
bigger fish.

If you want to be safe, call ASCAP for a copy of their current
licensing agreement.  As you might expect, I happen to have a name and
number: in their (very huge) legal department, Bennett Lincoff is
watching over the Internet, and he can be reached at (212) 621-6270.

That's where things stand today, but -- as we are so fond of saying in
this business -- "stay tuned for further developments."

Rich Marschner
WCLV, Cleveland OH