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Web radio bill passes House - September 28, 2008

You'd think that bailing out late-stage capitalism as we know it would be a fairly consuming job. But House of Representatives found time Saturday evening to pass a bill by voice vote to allow Webcasters like Pandora to negotiate new and lower performance royalty rates with the music business. The bill now goes to the Senate where it's expected to pass on Monday or Tuesday, assuming members are still hanging around waiting to vote on the $700 billion bailout of the credit markets. Although the bill does not guarantee the future of Web radio, the moratorium on the current royalties--which Webcasters claim are ruinously high--is set to expire. The bill extends the moratorium until Feb. 15, to give the parties more time to reach an accord.

The breakthrough that allowed the bill to pass came Saturday when the National Assn. of Broadcasters dropped its opposition to the extension.

"Everyone is grateful to the sponsors of the bill and to Chairman Berman for getting this through the House last night," said John Simson, executive director of SoundExchange, which collects performance royalties for songwriters and publishers from Webcasters. "This bill favors all webcasters and simulcasters – large and small. It paves the way for SoundExchange to use the coming months to pursue helpful solutions that allow all services to focus on business development. And, although there are no agreements yet, I am hopeful."

Jonathan Potter, executive director of the Digital Media Assn., which represents Webcasters, said, "This is an important step. Hopefully the Senate will follow suit and we can return, energized, to negotiations."

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