Before the
COPYRIGHT OFFICE
LIBRARY OF CONGRESS
Washington, D.C.

____________________________________
				    )
In the matter of		    )
				    )
Digital Performance Right in Sound  )		Docket No. 2002-1 CARP DTRA3
Recordings and Ephemeral Recording  )
____________________________________)


RESPONSE TO ORDER TO SHOW CAUSE AND RESPONSE TO REPLY COMMENTS OF THE RECORDING INUSTRY TO SRN OJECTIONS TO THE
PROPOSED SETTLEMENT AGREEMENT PUBLISHED ON MAY 20, 2003


	On July 21, 2003 the Copyright Office ordered that SRN show cause why it should not be dismissed from this proceeding.  This letter is submitted in response to that order.

        1.	SRN has a specific interest in the rates and minimum fees

	SRN has a specific interest in the rates and minimum fees because SRN is a functioning webcaster that would stream covered content if the rates and minimums were reasonable.  Because SRN is a functioning webcaster, with a long operating history, its interest is not a “vague or unspecified desire to form a business that would make use of” a statutory license.  See Order, July 3, 2002 at 68 FR 39837. 

	SRN Broadcasting has been syndicating original programming to terrestrial radio stations since 1994.  The company has archived broadcasts of its non-music programming as far back as 1997.  All content available contains no copyrighted material.  SRN has music programs available for transmission digitally, but has not chosen not to apply for a statutory license thus far.  In their comments of July 16, the RIAA states that there is no evidence that SRN “is making any digital audio transmissions of sound recordings at this time, or plans to do so.”

	SRN officials emphatically stated to the RIAA attorney that the sole reason (SRN does not stream) was purely due to cost.   Furthermore,  on the SRN/InternetFM.com website at:  http://internetfm.com/acid/listen.htm   It is stated:  “We are unwilling to provide streaming audio of this program.  Current pending legislation fails to provide an affordable rate structure and our financial cost would be prohibitive.  We regret the inconvenience.”  

	If SRN were to apply for a statutory license that would by definition imply acceptance of the terms of the agreement.  From our years of industry experience, we know the relative cost of producing, archiving, and maintaining online audio.  The proposed minimum licensing fees, in addition to the songwriters’ fees (BMI, ASCAP, SEASAC,) along with the cost of operation, make it a financial improbability.  There is ample anecdotal evidence in the media as to the paucity of Internet advertising dollars at the present.  This will continue into the near term.

	2.	SRN’s interests and proposals are like those of other small webcasters

SRN is very typical of the smallest webcasters.  The RIAA has failed to demonstrate that they have taken into account the concern or realistic needs of the smallest webcasters with a low level minimum fee.  A $500 minimum is not financially sustainable, even in the best of times.

A $100, $250, and $500 graduated scale is the only way to ensure the long term survival of small webcasters.

	

						Respectfully submitted,

						SRN BROADCASTING & MARKETING, INC.


						By: ______________________________
							Steven Leventhal
							SRN Broadcasting
							PO Box 414
							307 E. Washington
							Lake Bluff, IL  60044
							(p) 847-735-1995
							(f)  847-735-1998


							Steve Leventhal