Iain McLeod is mad as hell and he isn't going to take it anymore.

"I never did like bullies," McLeod says from his home in Warrington, England, where for the past few months he's worked in secret to create software called Streamer that allows anyone to anonymously run their own Internet radio station.

The free software has become a rallying point and McLeod a figurehead for pirate radio on the Internet in a looming war over copyright and royalties.

"Let's start a broadcasting revolution!" says McLeod.

His warcry is in response to the U.S. government's recent bid to introduce a new tariff on every copyrighted song that Internet radio stations play.

For noncommercial stations -- that is, the hobbyists which comprise the bulk of stations out there -- the fee is $500 US minimum plus two-tenths of a cent per song per listener. This would average out to about $7 US per month per listener for a hobbyist station, or about $180,000 US a year.

The costs are even higher for commercial operations, like AOL's Spinner.com or Listen.com.

The royalties were proposed last month by the Copyright Arbitration Royalty Panel (CARP), a branch of the U.S. government.

But unlike file-trading services which hawk illegally-copied music files, these webcasters are not offering music files for download. It's listen-only.

Furthermore, many of the Internet's most popular radio stations are run by DJs who do it for the love of the music; they do no not make money through on-air advertisements like their commercial counterparts.

While the fees fall substantially below what the Recording Industry Association of America (RIAA) had sought, many small stations say they still can't afford the rates. It's already forced a number of stations to close up shop.

San Francisco's popular Somafm.com, which drew more than a thousand listeners a day at its peak, went offline just days after the decision. A short message on its website now reads: "Killed by the RIAA. June 20, 2002."

Others forced to fold include All80s.com, the ever-popular NetRockRadio.com, RadioBoston.com, and more than 50 other hobbyist stations, many run by teenagers and youth in their spare time.

Many more battle-wounded stations are downloading McLeod's Streamer software and going underground where the copyright bill has no bite. About 16 pirate stations have sprung up using Streamer, and more are coming.

The software allows anyone with a connection as humble as a 56K modem to broadcast music globally to an unlimited number of listeners. The real prize, however, is in the software's stealth feature. It makes a station virtually untraceable, allowing the operators to elude the long arm of the U.S. copyright law.

McLeod calls Streamer a technological experiment turned into a political statement.

"It was a protest over the royalty rates and about the way money subverts democracy," McLeod said in an e-mail interview with CTV News Online.

"U.S. citizens would not have voted to close most Net radio, so how come this happened in a democracy?"

McLeod acknowledges that as someone living in the U.K., the Net radio debate raging in the U.S. isn't really his battle to fight because only U.S.-based Net radio must pay the new fees. But the implications are worldwide, he says.

"It's a global market and the U.S. is just crippling its Net radio operations, to the benefit of it's overseas competitors. The exact opposite of the import taxes the U.S. imposes on some things to protect it's home producers. Didn't they think of this?"

In Canada, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) -- the group which watches over music copyright -- has applied to the Canadian Copyright Board to levy tariffs against Internet radio stations.

SOCAN wants Canadian-based Net stations to pay 25 cents per listener per month. For commercial stations, it wants to add 10 per cent of all gross revenues on top of the per listener rate.

However, the royalty debate in Canada is currently before the Federal Court of Appeal so Canadian Net radio is off the hook for now.

In the U.S., some efforts to combat the royalty fees are already under way.

On July 26 Congressmen Jay Inslee, George Nethercutt and Rick Boucher introduced legislation called the Internet Radio Fairness Act which would protect a large number of Internet radio stations operated by hobbyists.
However, considering the recording industry's successful track record on shuttering copyright violators, the legal avenue appears to be an uphill battle.

For now, McLeod will continue to develop the technology and watch the revolution he helped start mature.

"I'm aiming for something you download, run, and it works quickly the first time," McLeod says. "It's importance as a new technology has taken over for now. It's being seen as a new cheap way to do broadcasting, which it is by serious broadcasters with money to offer."