Hot off the virtual press, the DC Circuit has affirmed the Library of Congress's setting of rates for 'net-based music broadcasters. In Beethoven.com LLC v. Librarian of Congress, No. 02–1244 (D.C. Cir. 14 Jan. 2005) (PDF, 80kb), the DC Circuit lays out a sordid tale in which most of the participants with financial interests come off as schmucks interested only in creating a distorted factual record. That's not to say that one always brings one's dirty laundry into the court; but the particular manipulation described seems to implicate the duty of candor to a tribunal. Basically, what both sides did was begin negotiations to set "benchmark" agreements proving their point, then abandon the negotiations that were not going to result in the kind of rates they wanted to see.
No doubt the "small 'net rebroadcasters" will whine and moan that they'll be driven out of business by "excessive" rates. If one does the math, though, one will see that the artists might, if they're lucky, see $0.00007 per performance credited to them under typical industry terms—before agent fees, "unpaid recording studio rentals," taxes, and the plethora of other fees charges to a performer. To put it another way, for the artist to get $1 in royalty credit, not quite 15,000 people have to listen to a particular performance from a particular outlet. That same audience costs the 'net broadcaster about $10. Somehow, I'm having a great deal of difficulty generating any sympathy. For anybody except the unpaid artists.