On December 14, 2010, the Copyright Royalty Board set rates for the section 114 statutory license for public performance of sound recordings by means of webcasting and the corresponding section 112 statutory license for the creation of ephemeral copies for the period 2011-2015.

For commercial webcasters, the per-performance rates (i.e., the rates for performing one sound recording to one listener) will increase slightly from the current rates to the following levels for each year of the license term:

2011: $0.0019

2012: $0.0021

2013: $0.0021

2014: $0.0023

2015: $0.0023

In addition, the Board accepted a stipulation proposed by the webcaster Live365 and SoundExchange, the collective that receives and distributes the statutory royalties, that (1) the minimum per-channel or per-station fee should be set at $500, subject to a cap of $50,000 for any single webcaster, and (2) the section 112 statutory rate for the making of ephemeral copies (server copies) should be bundled with the section 114 performance license and should represent 5% of the total royalty.

Live365 had proposed a rate of $0.0009 per performance for the entire license term (with a 20% discount for webcasters who aggregate more than 100 channels) based on an economic analysis of webcaster profits and losses. SoundExchange had proposed a rate of $0.0021 per performance in 2011, increasing by $0.0002 per year up to a rate of $0.0029 in 2015 based on a benchmark analysis of record company licenses to interactive services and certain webcasting settlements, most notably SoundExchange's settlement with the National Association of Broadcasters (NAB) (discussed below) and its settlement with Sirius XM Radio. In reaching its determination, the Board dismissed Live365's royalty model, holding that its analysis depended too much on unsupported assumptions and data errors and largely accepted SoundExchange's proposal.

The Board rejected Live365's proposal to exclude all performances of 30 seconds or less from the definition of "performance," citing a lack of record evidence to support such provisions. The adopted regulations, however, do maintain an exemption that has been in place for the previous license period for incidental performances, including bumper music and background music, that do not contain an entire sound recording and do not feature a particular sound recording of more than thirty seconds.

For noncommercial webcasters, the Board adopted the same statutory rate structure that has been in place for the previous license period. Specifically, all noncommercial webcasters subject to the statutory rate must pay a minimum fee of $500 per year, which covers the first 159,140 aggregate tuning hours plus an additional per-performance fee equal to the commercial rates for aggregate tuning hours streamed in excess of 159,140 per month. A new provision applicable to the upcoming license period provides that noncommercial stations may also choose to pay an additional $100 annually in lieu of submitting reports of use of sound recordings. As was true for commercial webcaster rates, the fee for the section 112 statutory license for server copies was deemed to be bundled into the performance royalty (including the $500 minimum fee) and to represent 5% of that royalty. The Board rejected a proposal to exclude programming that does not use sound recordings, such as news, talk, sports and certain advertising programming, from the calculation of ATH. It also clarified that the requirement that webcasters retain "books and records" relating to royalty payments does not require the maintenance of server logs; rather, the required records need be no more detailed than the specific information required by the regulations.

In addition to these rates, the Board also approved a 2009 settlement between the NAB and SoundExchange that extends through 2015 and applies only to terrestrial radio stations with webcasting operations that have opted in to the settlement. These per-performance rates, subject to certain exceptions, are as follows:

2011: $0.0017

2012: $0.0020

2013: $0.0022

2014: $0.0023

2015: $0.0025

Thus, the rates set by the Board for commercial webcasters are slightly higher than the negotiated NAB rates in the first two years and slightly lower in the final three years of the term.

The Board also approved a settlement between College Broadcasters, Inc. and SoundExchange that applies to noncommercial educational webcasters, such as college radio stations, that have opted in to the settlement. Like the standard noncommercial rates described above, noncommercial educational webcasters will pay a flat $500 per year with a per-performance rate for performances beyond 159,140 aggregate tuning hours in a month. The above-cap rates, however, will match the per-performance rates of the NAB deal.

The Board's newly issued webcasting rates will not apply to all webcasters, as many such webcasters have already reached separate royalty agreements with SoundExchange under the Webcaster Settlement Act, including the NAB and various groups of commercial and noncommercial webcasters. Many, but not all, of these agreements lock in those webcasters to the agree-upon rates through 2015. Other agreements operate on a yearly opt-in basis; those webcasters thus may decide to pay under the Board's rates rather than the settlement rates if the Board-issued rates are more economically advantageous for their situation.