A teenager hoping to become a star radio DJ with a laptop and a dream now faces the reality of a hefty bill for royalties.

Irish internet radio broadcasters face increased costs because of a decision by the US copyright authorities to raise royalty rates. The new regulations also threaten to kill off all but the largest American web radio operators.

As of May 15th, all US webcasters will have to pay royalties to the Recording Industry Association of America (RIAA) on a per listener per song basis rather than as a proportion of revenue, which had been the deal up until now.

Irish webcasters will also have to pay the new rates for any listeners in the US, according to Sean Murtagh, head of operations for Phonographic Performance Ireland, the industry body that collects broadcast royalties on behalf of record companies in this country.

Although the PPI already operates on a 0.001 per performance basis for the Irish internet radio audience, it enforces and collects the applicable rate in the country of reception for international listeners. While the US tariff is actually lower today than the Irish rate . . . at $0.0008 ( 0.0006) per track per stream . . . by 2010 it will more than double to $0.0019, representing a serious increase for any webcaster with US listeners.

US webcasters have estimated that a station with an average of 1,000 daily listeners would have to pay upwards of $180,000 per year once the rate has scaled up. They have complained the changes will effectively put them out of business and unfairly benefit terrestrial radio, which because of a historical anomaly actually earns promotional fees for radio play. In Ireland free-to-air broadcasters will still pay royalties according to revenue rather than listenership.

The implications for Irish internet radio do not appear to be as severe as they are for US operators since the PPI has to date never charged any of them more than the minimum licensing fee of 500 per year, according to Murtagh.

This suggests Irish internet radio audiences are still a vanishingly small constituency . . .

especially compared to the estimated 72 million Americans who listen to internet radio. However, any one of those Americans tuning in to an Irish station will cost about twice as much as an Irish listener, so the Irish webcasters could be facing charges above the minimum before long, according to industry sources.

Brian Daly, marketing manager with former internet-only station Phantom FM, said that while terrestrial broadcasters look at streaming radio as a secondary transmission for listeners within their markets who can't get a signal, pure internet broadcasters facing the higher fees will have to limit availability or shut down.

That's because a terrestrial broadcaster can sell advertising on the back of local listenership, but international audience numbers don't interest ad buyers . . . at least in Ireland. "Listeners from the States are worth nothing to us, " he said.

Webcasters don't yet enjoy anything like the revenue freeto-air broadcasters can reap.

According to the online Radio and Internet Newsletter, which has been covering the royalties issue extensively, the new regime would cost $0.0128 per listener hour for a US webcaster . . . an amount that seems small, but equals or exceeds the total per listener revenue stream of a typical station. For Irish internet radio stations licensed with the PPI, US listeners would always represent a net loss since they don't even generate revenue.

Reacting to the uncertainty over royalties Singapore's largest broadcaster, Mediacorp, decided to stop internet streams of its 14 stations to US IP addresses pending further clarification of the new tariffs structure. Industry analysts in the US expect others to follow. The BBC already "geoblocks" internet radio transmission by postcode, as well, limiting the availability to people who could otherwise hear the FM signal. This avoids both international royalty entanglements and licence fee issues.

The issue is not dead in Washington, however. Following representations from a host of broadcasters . . . including AOL, Clearchannel and a number of independent operators . . . the Copyright Royalties Board said it was considering motions for a rehearing of its 2 March judgment on the issue.