Internet Radio Bill Passes House

Voice Vote OKs Webcaster Settlement Act

(CNET)  Web radio stations live to fight another day.

The House of Representatives has unanimously passed a bill that Web radio stations have painted as life or death for their services.

The Webcaster Settlement Act, which would allow Internet radio stations to negotiate with the music industry for a royalty rate lower than what Congress mandated last year, passed the House by a voice vote on Saturday.

Proponents of the bill had predicted a close vote.

Tim Westergren, founder of Net music service Pandora, said he was elated about triumphing in the House, which came after traditional radio broadcasters withdrew their opposition.

Dennis Wharton, a spokesman for the National Association of Broadcasters, said Saturday night that Rep. Howard Berman (D-Calif.) had met with representatives of the group and addressed some of their concerns.

As a result, the NAB dropped its opposition in the House and will not oppose the bill when it moves to the Senate for a vote, either Sunday or Monday (I've written a story about the bill's chances in the Senate and how the NAB was persuaded to drop it's opposition).

"The bill having passed unanimously in the House certainly gives it momentum heading into the Senate," Wharton said.

Webcasters are fighting for the right to negotiate with the music industry to reduce the royalty rates they must pay to stream music over the Web. Any deal must be approved by the federal government.

Congress is expected to adjourn on Monday, and the Webcaster Settlement Act enables Internet radio stations to reach an agreement with the music industry while Congress is out of session.

Westergren, who has emerged as a de facto spokesman for the bill, said some Web radio stations can't afford a long delay in the talks. Right now, the law requires them to pay the older royalty rate, which Webcasters say will soon drive them out of business.

"It would be a killer blow," Westergren said. "If we don't get it passed now, it would mean waiting for a whole new Congress and administration and lots of uncertainty."

As for the legislation's chances in the Senate, Westergren said he's cautiously optimistic.

"I've become gun shy because I've been burned so many times before," he said. "We're waiting to see what happens and consulting with our friends (in Congress)."

[j_flood]

I''ve never understood why broadcasters don''t pay a royalty at time of purchase - buy a coded digital copy for a set number of plays per year (or other formula) - and be done with it. And make broadcasters (or other commercial users) to use adapted devices that only play coded music.

[akakjb]

This whole thing should have never even gotten this far. A judge with a lick of common sense should have thrown out the original NAB & ASCAP lawsuits on the grounds they violated almost every law on the books to protect against monopolies. There is no good reason to make an internet radio station pay more than a broadcast station (which is usually NOTHING) just because they''re on the internet. Pay by the listener? If broadcast did that, they would have gone under decades ago. Another example of trying to squash a new business model to protect an antiquated one. Survival of the fittest, kiddies - you either adapt & thrive or whine & die. Time to let broadcasting sink or swim on their own instead of trying to *** the progress of everyone else just to help them.

[mrvolleyba11]

"Any deal must be approved by the federal government."

a perfect example of too much government involvement!

[kevsan1]

Broadcasters have for years paid BMI. ASCAP and SESAC for the music played (the songwriters). Now others want in on the action thinking there is a fortune to be made on the Internet. Well, not yet. Not enough people for most sites and advertisers are not willing to pay much.

Broadcasters have argued for years and rightly so that their airplay generates record sales. They in reality should be paid for the airtime by the artists but then record companies will find a prosecutor like Spitz and charge payola for play-for-pay.

If broadcasters had to pay for what was played, you would be sorry. Only the top testing stuff would ever be heard and nothing else. Broadcasters are getting smashed in the current economy and have been laying people off and voice-tracking shifts or going jockless letting computers do the work. They can''t afford more costs like that. They are already paying the increased rates for their streaming stations hoping more listeners will come.