In the US, radio stations are exempt from paying royalties to artists and record companies where the broadcast is made within a 150-mile radius of a radio transmitter or retransmitter. This exemption is based on the understanding that radio broadcasts of music provide publicity for artists.
However, the US Digital Millennium Copyright Act obliges webcasters to pay royalties in order to protect copyright interests. If the court had extended the exemption already enjoyed by radio stations to include broadcasts made by them over the internet, then webcasters acting independently of traditional radio stations would have been disadvantaged.
The decision has also been welcomed by the Recording Institute Association of America (RIAA), which represents the interests of copyright holders in the music industry and had supported the Copyright Office throughout the proceedings.