AP license vs. fair use?


I'm not sure what to make of this. According to the Associated Press,

The Associated Press, following criticism from bloggers over an AP assertion of copyright, plans to meet this week with a bloggers' group to help form guidelines under which AP news stories could be quoted online.

- Seth Sutel, AP

And they provide commercial (and even educational) licenses for purchase so people can legitimately use content published by the Associated Press.

But what of fair use? I'm honestly not sure what to make of this - can the AP demand a fee for a quote using as little as 5 words? Did I break the law by citing one sentence above? Did I need to pay $17.50 to pay for quoting one sentence of an article, while providing proper attribution? According to their site, anything resembling fair use is described as "piracy" - that can't be right. They do offer a "free web post" version - as long as I am comfortable with only using the quote for a limited time, and will let the AP post their ads on my site. That's not "free". Here are the options they provide for "reuse":


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