Legislation resolving the battle between Webcasters and recording-industry officials over Internet-radio royalty fees was passed by Congress November 14. Rather than setting specific royalty rates, as did a bill passed by the House in October, the compromise measure authorizes the music industry’s principal royalty collector, SoundExchange, to negotiate binding royalty contracts with small and noncommercial Webcasters, the CNet online news service reported November 15.
The earlier bill had been stalled by Sen. Jesse Helms (R-N.C.) in response to fears voiced by small religious broadcast radio stations that the explicit rates would be used as precedent in future royalty agreements.
Sources told CNet that SoundExchange plans to offer small Webcasters the same rates as in the earlier bill: Those making less than $250,000 per year would pay about 10% of revenue or 7% of expenses, whichever is greater, and those making between $250,000 and $500,000 a year would pay 12% of revenue or 7% of expenses.
Webcast royalties became the subject of congressional activity in response to dissatisfaction on bother sides over the flat per-song imposed in June by Librarian of Congress James Billington.
Posted November 25, 2002.