The “it” in question is the new royalty rates for Internet radio. So far no one seems to like the new rate structure. That is, no one but the major labels and the SoundExchange, the nonprofit group set up to collect online royalties.

“Our artists and labels look forward to working with the Internet Radio industry – large and small, commercial and non-commercial – so that together we can ensure it succeeds as a place where great music is available to music lovers of all genres,” said SoundExchange Executive Director John Simson.

But you would have a difficult time finding a netcaster, big or small, that supports the new rates, which calls for Net stations to pay a royalty fee every time a song is played.

Small shops like Pandora or Live365 claim the new royalty fees are a death knell for the industry. For the past five years, royalty payments for small webcasters amounted to 12 percent of total revenue. Under the new rates the same companies could find themselves facing a 300 to 1,200 percent markup, an amount the boutique stations claim far exceeds their income.

But the webcasting industry did receive a small reprieve from the new royalties.

Originally, the new rates were to become law of the land this year and be retroactive to last year. Although a panel of copyright judges denied a request for the Copyright Royalty Board to reconsider the new rate, the judges did make one change in the new fees. They ruled that calculations for rates for last year and this year are to be based on average listening hours with the new pay-per-play rates starting next year. Another request postponing the May 15th deadline date to pay royalties was denied.

On the day of the ruling, representatives of the SaveNetRadio coalition announced a national grassroots campaign aimed to prevent the new rates from taking effect.

“The CRB’s ill-informed decision to increase royalty fees to this unjustifiable level will quite simply bankrupt most Webcasters and destroy Internet radio,” said SaveNetRadio spokesman Jake Ward.

Individual Webcasters were also critical of the copyright judges’ decision to deny requests to reconsider the new royalty fees.

Live365 CEO N. Mark Lam said that under the new royalty rates, “there is no industry,” while Pandora founder Tim Westergren, in an e-mail to Pandora listeners, described the new fees as “irrationally high,” and if left unchanged would “kill every Internet radio site, including Pandora.”

But one trade organization representing several large Webcasters has yet to enter into a dialogue with SoundExchange over the new rates. That’s the Digital Media Association, which counts companies like Yahoo and AOL among its members. DiMA’s man-in-charge, Jonathan Potter, did say the situation may change soon. Potter also said his organization might seek support from Congress.

Will the new rates destroy Internet broadcasting? While the small companies appear to be facing a financial tsunami when the new fees begin next year, the larger companies probably will absorb the hike as a cost of doing business and adjust their advertising and subscription rates accordingly.

But the new rates are hardly an inducement for new ventures into Internet radio, and there are rumblings that this is what the recording industry really wants – fewer online channels, leaving webcasting to major companies like Microsoft’s MSN, Yahoo Music and AOL. And, if the Webcasting gloom-and-doomers are correct, the recording biz just might get what it wants.