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WOXY, a small radio station in Ohio, managed to avoid regulatory obstacles for 26 years by transforming itself from a traditional broadcaster to a web-only radio station and, finally, to a unit of an online CD store. Time may be running out for WOXY, however, because the federal Copyright Royalty Board has increased the royalty rates that web radio stations must pay in order to play music. This action has the potential to more than double the yearly costs of operating WOXY to total about $2 million. This is much higher than the station's annual revenue, which ranges from $500,000 to $1 million. While the Board's decision could be rescinded by the United States Congress, Bryan Jay Miller, manager of WOXY, does not believe the situation will improve. Miller began working at the station 15 years ago, and during that time, it has been a struggle to overcome the various regulatory roadblocks that have negatively impacted small radio stations. In 1996, for example, the federal government raised the number of radio stations that could be owned by large media firms. This left less room for small, independent stations, so many of them moved to the Internet. Currently, over 50 million people listen to Internet radio. New regulations now threaten to impact online stations, however. Previously considered a special category, small webcasters such as WOXY paid royalties on the basis of total revenue or expenses, rather than the number of songs played, but they will now have to follow the same regulations as everyone else in the radio industry.
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