2002 order for collecting royalty payments made by eligible nonsubscription transmission
services under the Section 112 and Section 114 statutory licenses,^3173 to enter into agreements on
behalf of all copyright owners and performers to set rates, terms and conditions for eligible small
webcasters operating under those statutory licenses.
Section 8(f) of the SWSA defines an “eligible small webcaster” as “a person or entity that
has obtained a compulsory license under 17 U.S.C. 112 or 114 and the implementing regulations
therefor to make eligible nonsubscription transmissions and ephemeral recordings that–
(1) For the period beginning on October 28, 1998, and ending on December 31, 2002, has
gross revenues during the period beginning on November 1, 1998, and ending on June
30, 2002, of not more than $1,000,000;(2) For 2003, together with its affiliates, has gross revenues during 2003 of not more than
$500,000; and(3) For 2004, together with its affiliates, has gross revenues plus third party participation
revenues and revenues from the operation of new subscription services during 2004 of
not more than $1,250,000.”^3174The SWSA governed the period from Oct. 28, 1998 through Dec. 31, 2004. During that
period, eligible small webcasters could elect to pay the royalty rates established by the SWSA
rather than the statutory rates determined by any other applicable method, such as a CARP
proceeding. To be eligible for the SWSA rates, an eligible small webcaster was required to
submit a completed and signed election form to SoundExchange by no later than the first date on
which the webcaster would have to make a royalty payment under the SWSA. Subject to certain
minimum annual fees, the royalty rates under the SWSA for Oct. 28, 1998 through Dec. 31, 2002
were 8 percent of a webcaster’s gross revenues or 5 percent of its expenses, whichever is greater.
For 2003 and 2004, the royalty rates were 10 percent of the webcaster's first $250,000 in gross
revenues and 12 percent of any gross revenues in excess of $250,000 during the applicable year,
or 7 percent of the webcaster's expenses during the applicable year, whichever is greater.^3175
Under Section 5 of the SWSA, the minimum annual fees ranged from $500 to $5,000, depending
upon the year and the gross revenues of the webcaster.^3176
In June of 2003, the RIAA and educational and other tax exempt institutions reached an
agreement under which college radio stations and other educational broadcast stations staffed
substantially by students enrolled and the educational institution could pay even further
discounted license fees for webcasting in the amount of a flat fee of $200 annually for the years
1998 and 1999, $250 annually for the years 2000 through 2003, and a fee of $500 for 2004,
except that educational institutions having fewer than 10,000 students could continue to pay only
(^3173) See 67 Fed. Reg. 45239 (July 8, 2002).
(^3174) Id. at 78513.
(^3175) Id. at 78511.
(^3176) Id. at 78512.