My weekly Law Bytes column (Toronto Star version, homepage version) focuses on the legal rules surrounding Internet radio. Internet radio consists of several types of "stations" including conventional radio stations that simulcast their signal on the Internet, community and college radio stations that use the Internet to extend their signals from small communities to the entire world, and Internet-only stations that broadcast exclusively online.  The Internet-only services are particularly intriguing as they include niche webcasters focused on content not found on mainstream AM/FM stations as well as customizable services such as Pandora and Last.fm, which help users identify new music personalized to their tastes.

Despite their popularity, there is growing fear that a recent U.S. royalty decision could effectively shut down thousands of webcasting services.  The U.S. Copyright Royalty Board recently established a new royalty scheme that dramatically increases the fees that webcasters will be required to pay to stream music online. 

Given the concern about the future viability of Internet radio in the U.S., there has been mounting speculation that some webcasters may consider setting up shop in Canada, where the U.S. rates do not apply.  For example, Mercora, a service that allows individuals to launch their own webcasts, has established a Canadian site that falls outside U.S. regulatory and royalty rules.

Webcasters considering a move to Canada will find that the legal framework for Internet radio trades costs for complexity.  There are two main areas of concern from a Canadian perspective – broadcast regulation and copyright fees.

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