The fee privately-held French radios stations pay to the recording industry will be significantly raised from Jan. 1, 2008, a government-lead commission ruled on Oct. 15.

Since 1993, the rate was set at 4.25% of radio stations' broadcast income, weighted against the percentage of music in their programs. The new system introduces progressive rates from 4% to 7%, in accordance with the stations' revenue.

The so-called "remuneration equitable" is collected from broadcasters by umbrella group SPRE and then distributed to artists and record labels through their respective collecting societies: Spedidam and Adami for the artists, SPPF and SCPP (whose membership includes the four major labels) for the record companies.

Rates are set by a dedicated commission, which combines representatives from the five main radio trade bodies with five delegates from SPRE, chaired by a government representative with the casting vote.

SCPP and SPPF both praised the commission vote in separate press releases. Both organizations, however, stressed that the new rate does not bring neighboring rights to the level of authoring rights, their initial goal, nor do they bring France to the level of the top European countries.

"We are globally satisfied," says SPPF director general Jérôme Roger, who explains that the new system, when fully applicable in 2011, will imply a 38% raise of the revenue collected by SPRE.

"We based our calculations on 2005 figures, the latest final accounts available," he explains Roger. According to Roger, SPRE collected €20 million ($28 million) from commercial radios in 2005. The new system would have lead to a €27.6 million ($39 million) collection in that year. In 2005, Sacem collected €38.9 million ($55 million) from commercial radio stations.

The raise, moreover, is unequally shared by radio stations. Small non-profit radio stations will actually pay 40% less, says Roger, while national radio networks' contribution will be up 50% to 60%. "We wanted to balance the revenue sharing in favor of those who takes risks," he comments.

The new rate system has been voted by the commission president Gilles Andreani and backed by French culture minister Christine Albanel, who stressed in a statement that this was part of a "wider plan for the future of the music industry, worked out by the ministry of culture at the request of the [French] president."

The three trade bodies representing commercial radio stations in France -- SRN, SRGP and SIRTI -- all voted against the new rate. In a joint press release, they vigorously denounced "the excessive raise of the rate, imposed by the government to satisfy the interests of the music industry, while the radio sector is currently in a difficult economical context."

"The government is making us pay its support to the music industry," says Rémy Sautter president of radio trade body SRGP and chairman of the supervisory board of RTL, France's No. 1 radio station. "Why would they not finance it themselves?"

In an interview with Billboard in July, Marc Pallain, chairman of the board of directors at French radio giant NRJ Group and president of national radio network body SRN, warned of a "crisis situation" in case SPRE would "force its way." Sautter says commercial radio stations will appeal this decision in French administrative courts, and will plead in front of the European Court of Justice if not successful.

Roger says French record companies are now looking towards renegotiating the rate paid by publicly-held radio stations, which he hopes will be achieved in 2008.