Internet Radio Compromise Bill Passes

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Amidst the hurlyburly of the Wall Street meltdown, there is still a lot going on in the U.S. that is of note. Financial stresses and the fear of a new depression loom large in the consciousness of most Americans occluding all other news except the current Presidential race.

Now I am not saying that these are not important issues. Not at all. Much of the focus during Advertising Week was related to industry projections and positioning in relation to the onslaught of negative news in the financial section. What I would like to point out is that some extremely interesting things have occurred that no one seems to have noticed during the recent craziness. To wit, the long standing battle over Internet radio royalties seems to have reached a pseudo-detente.

Via Chloe Albanesius at PC Magazine:

The bill, the Webcaster Settlement Act of 2008, guarantees that if Internet radio and the copyright holders can reach a deal over royalty rates, “Uncle Sam will not get in the way,” [Rep. Jay] Inslee said. […]

The bill “is a simple yet critical legislative solution that allows private sector actors to keep a negotiating process alive,” Rep. Marsha Blackburn, a Tennessee Republican, said in a Saturday floor statement. “Why? Because Internet radio royalties operate under a government license, and Congressional approval is necessary to allow a private sector agreement to effectuate outside the government process.”

The bill makes some technical changes to the Copyright Act to give the two sides more leeway in reaching an agreement. It originally called for stakeholders to reach a deal on this issue by December 15, but that was pushed back to February 15 after NAB objected to such a short timeline.

While this is not a resolution, the bill (H.R. 7084) does create an environment much more conducive to working out a solution that will not bankrupt Internet radio stations like Pandora. In simplest terms, Sound Exchange (which collects royalties on music broadcast via the Internet), the RIAA, and Internet broadcasters have agreed up one critical item. They need more time to work out a solution to the dilemma of royalty structuring for online radio.

Photo courtesy of Jay Inslee, used under its Creative Commons license

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