The Federal Court ruled that Internet simulcasts of radio programs are not broadcasts under the Copyright Act and therefore are not covered by existing licenses granted to commercial radio stations.
The court ruled in favour of the Phonographic Performance Company of Australia (PPCA), overturning a previous decision. PPCA represents recording artists and labels.
The decision is a loss for Commercial Radio Australia, which argued Internet simulcasts should be treated the same as radio broadcasts for the purposes of licensing.
"A broadcasting service is the delivery, in a particular manner, of a radio program, consisting of matter intended to entertain, educate or inform," the court wrote in today's decision.
"Thus the delivery of the radio program by transmission from a terrestrial transmitter is a different broadcasting service from the delivery of the same radio program using the internet.
"Clearly, a service that makes radio programs available using the Internet will not be a broadcasting service for the purpose of the Broadcasting Act unless the service that makes radio programs available using the Internet also uses the broadcasting services bands."
The Australian Copyright Council said the decision "leaves open the possibility for new licences to be negotiated for content that is streamed by way of radio simulcast on the Internet."
Commercial Radio Australia CEO, Joan Warner, said the industry body was disappointed with the ruling. However, she said it's too soon to comment on possible next steps "until we look at all options."
The PPCA hailed the decision, which it said "means PPCA can now seek a separate rate for this activity and one which is not bound by the controversial statutory cap which limits the maximum amount commercial radio operators can be asked to pay for broadcasting music to just one per cent of their gross income."
"This is an important win for artists and labels whose music is used widely on the internet to help drive profits for Australia's radio industry," said PPCA CEO, Dan Rosen.
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