Congress OKs Webcaster Bill

US lawmakers have honored their promise to address a languishing small-webcaster royalty bill that was put on hold prior to the fall elections.

On November 14 and 15, the Senate and House of Representatives approved legislation that will let copyright holders and small webcasters negotiate royalty rates for recordings played over the Internet. President Bush should sign the bill into law soon.

Specifically written to allow small webcasters to negotiate rates different from those to be paid by large commercial broadcasters, the bill was heralded by the Digital Media Association (DMA) as a "victory for consumers and Internet radio operators." DMA director Jonathan Potter said the bill would "stabilize and promote the entire industry by promoting programming diversity and consumer adoption at this very early stage of a new medium."

The bill suspends royalties to be paid by community, church, and college stations until June 20. Several small webcasters ceased operations when royalties were imposed, saying the financial burden was too heavy. New rates will be based on each station's revenue, and will be levied and collected by SoundExchange, an organization representing recording artists and record labels. A quirk in US royalty law exempts traditional radio stations from payments to labels and artists, although they do pay songwriters and composers. Radio stations that make their programming available on the Internet now have to pay for that privilege.

In June, Librarian of Congress James Billington established an across-the-board royalty rate of 0.07¢ per listener per song (or 70¢ per every song per 1000 people), less than the music industry had campaigned for, but more than small webcasters said they could afford. The bill codifies a lower rate, determined by earlier negotiations between webcasters and the recording industry. The House of Representatives unanimously approved a previous version of small-webcaster legislation before the elections, but the bill was stalled in the Senate until the second week of November.

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