BMI Sues Pandora Over Attempt to Lower Royalty Fees

Broadcast Music Inc., or BMI, filed a lawsuit in federal court against Internet radio giant Pandora Media Inc. over Pandora's attempt to lower its royalty obligations by buying a tiny radio station in South Dakota to qualify for the lower rates that terrestrial radio broadcasters pay to use music online. BMI is asking a federal "rate court" -- a part of the U.S. District Court in Manhattan that sets music royalty fees when the parties involved can't agree -- to determine the rates that Pandora must pay BMI members to use their work.