Congress passed a law in October 1998 called the Digital Millennium Copyright Act (DMCA), which established a new "sound recordings performance royalty" that webcasters must pay to record labels, similar to the royalty that both broadcast radio and Internet radio have to pay to composers of songs. (Note: The composers royalty is about 3% of station revenues.) However, the Copyright Office, following unclear instructions from Congress, set a rate for this new royalty that is currently more than 100% of most webcasters' revenues! (If broadcast radio stations had to pay the same royalty rate, it would cost them billions of dollars and wipe out the entire profits of the industry!)
