This reminded me of an essay in last week's New Yorker about "The Permission Problem" (http://www.newyorker.com/talk/financial/2008/08/11/080811ta_talk_surowiec

This reminded me of an essay in last week's New Yorker about "The Permission Problem" (http://www.newyorker.com/talk/financial/2008/08/11/080811ta_talk_surowiecki http://www.newyorker.com/talk/financial/2008/08/11/080811ta_...). In summary, when too many stakeholders are involved in a deal, the deal tends to fall through, because any one of the stakeholders is likely to demand nearly the entire value of the deal (since they can kill it by denying their permission). Radio (Internet and other) doesn't exactly fit that, since you could still have a viable radio station without playing, say, any Beatles songs, but it is similar. If, in order to have an Internet radio station, you needed to negotiate with the owner of every song you wanted to play, running such a station would be prohibitively expensive. Having an organization such as SoundExchange with the authority to collect royalties for copyright holders is one solution to that problem. That doesn't answer your question, though. One answer is that such fees are so high that they make SoundExchange useless, at least as far as Internet radio goes (as opposed to Satellite), because no one can afford it, so such fees effectively kill Internet radio. If we were talking about a free market, an appropriate response to this could be, "let them die out, and some other competitor can take their place and make a better deal with Internet radio stations". However, we're not. SoundExchange is granted monopoly power by the US Copyright Office. If, in exchange for that power, it does not grant a fair deal to Internet radio stations, then US citizens should have the ability to act through their government to change that. Note also that individual copyright holders are granted monopolies to those works by the government. A reasonable stance, I think, is - if the government gives you a monopoly on something, you have a responsibility to charge fair prices for that thing. Prices that prevent a new industry, for which there is much demand, from growing are probably not fair.