Internet Radio: Last-Minute Hope

Congress may not be able to pass a bailout bill to save financial markets, but it looks like it might just figure out how to save Internet radio. I'm glad they've got their priorities straight.

On Saturday, the House of Representatives passed H.R. 7084, dubbed the "Webcaster Settlement Act," a bill authored by Rep. Jay Inslee (D-Washington) and co-sponsored by Reps. Howard Berman (D-California), Donald Manzullo (R-Illinois), John Conyers (D-Michigan) and Lamar Smith (R-Texas). Webcasters and SoundExchange, the nonprofit group that collects artist royalties from Internet radio stations, are expected to reach an agreement for lower royalty rates in the coming months. However, since Internet radio operates under a government license, any agreement would be stalled without Congressional approval, so a deal to continue negotiations while Congress is out for the election season is crucial. The bill allows talks between the two parties to continue until February 15 and makes any deal reached legally binding even without Congressional approval.

The Webcaster Settlement Act comes after last year's ruling by the Copyright Royalty Board to significantly increase royalties paid by Internet radio stations. Many Webcasters argued that the new royalties would saddle them with crushing bills. The Associated Press is reporting that as much as 70 percent of Internet radio's revenue could go to royalties, making the business model untenable.

Supporters of the current bill have been advocating for Internet radio ever since the Royalty Board's 2007 decision. The Senate is expected to vote on H.R. 7084 this week. Obviously, other issues are more prominent on the Congressional agenda, but this effort is real progress toward a compromise that could ensure Internet radio continues to thrive. Let's hope Congress finds the time.

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