Judges reject online radio firms' appeal on royalty

US Internet radio broadcasters were dealt a setback when a panel of copyright judges threw out requests to reconsider a ruling that hiked the royalties they must pay to record companies and artists, an Associated Press report said.

The Associated Press report said a broad group of public and private broadcasters, including radio stations, small startup companies, National Public Radio and major online sites like Yahoo and Time Warner 's AOL, had objected to the new royalties set March 2, saying they would force a drastic cutback in services that are now enjoyed by some 50 million people.

In the latest ruling, the Copyright Royalty Board judges denied all motions for rehearing and also declined to postpone a May 15 deadline by which the new royalties will have to be collected, the report said.

However, they did grant leniency on one point, allowing the webcasters to calculate fees by average listening hours, as they had been, as opposed to the new system of charging a royalty each time every song is heard by an online listener, the report said.

The Associated Press report said many webcasters say the sharply higher royalty fees will put them out of business.