Internet radio stations hoping the Copyright Royalty Board would consider National Public Radio's request for a change to planned fee increases received a major blow earlier this week. The board refused to change the new rate rules, which means that many Internet radio stations are facing the prospect of paying royalty fees that exceed their annual income.

The Copyright Royalty Board (CRB), which is the U.S. government agency that oversees the royalty process, revised the royalty payment structure for Internet-based broadcasters in March, and the changes are set to go into effect in May.

Under that structure, Webcasting stations will be subject to a sliding payment scale that ramps up through 2010. Instead of paying between 10 and 12 percent of their gross income, the stations will be required to pay on a per song and listener model.

NPR was hoping to convince the CRB to reconsider its new royalty structure when it filed a motion for a rehearing on April 2. "In this filing, we are asking the Copyright Royalty Board judges for a public rehearing where we can provide supplemental testimony and oral argument of its motion," Andi Sporkin, NPR's Vice President of Communications, commented.

"As in the past," he added, "a reasonably-determined flat fee would be fair and just, for us and for the recording industry. We hope the unique nature of public radio and its long-standing public service to the music community and music listeners will not only be recognized, but be able to continue."

After the hearing, the CRB ruled to leave the new royalty structure as is, stating "...none of the moving parties have made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing."

SoundExchange, the RIAA's digital music fee collection organization, originally proposed the new royalty structure, which means the ruling is music to the organization's ears. SoundExchange Executive Director John Simson called the ruling "a victory for performing artists and record labels," and added "Our artists and labels look forward to working with the Internet Radio industry."

Live365's listener awareness program

Unfortunately, that industry is likely to get much smaller in the near future. In an effort to help keep that from happening, Live365 has launched a new Web page designed to drive up listener awareness. SaveNetRadio.org has launched its own awareness campaign as well, and coupled it with an online petitions.

While some groups are considering taking the royalty battle into the U.S. Court of Appeals and others are looking for legislative support, any help that comes from the government will be too late for most stations since the process could take over a year. By that time, your iTunes radio list will likely be substantially shorter.