Internet Radio Saved? Not So Fast...

IInternet Radio is now Saved.

f you just scan the headlines, you'll glean that H.R. 7014 has passed both the House and the Senate, and

Well, kind of.

First off, what does the Webcaster Settlement Act of 2008 do, exactly? It basically updates the Webcaster Settlement Act of 2002, changing the terms slightly and moving deadlines. It allows for Internet broadcasters and the SoundExchange to continue negotiating the royalty rates that webcasters have to pay. And that they can continue to talk, and even reach a binding agreement while Congress is adjourned.

That's good, but not great. The royalty rate is still officially set at the ruinous levels it was on January 1. The SoundExchange has agreed not to collect the higher fees as long as talks continued. But should talks cease, then the entire uncollected balance plus interest would immediately come due -- which would shutter many netcasters with one fell stroke.

Webcasters like Pandora are obviously grateful for any kind of extension, but the SoundExchange is still acting pretty cagey. As their executive director John Simon said, "We are hopeful, but we've been close at other times during the past 18 months." (that would include the time last year when they lobbied the Copyright Board so hard they didn't have time to talk to anybody).

So there's still a need for the Internet Radio Equity Act (H.R. 2060 and S.1353), still languishing in committee. That bill would have the rates set at a fair level by Congressional legislation. The fees would be scalable, so each netcaster would pay in proportion to their income, rather than the current rates that demand a large payment that in many cases exceed the netcaster's income.

Still, it's a start. The Senate passed the bill unanimously, so kudos to my congressmen, John Warner (R-Va) and Jim Webb (D-Va). The bill also passed the House of Representatives, but by a voice vote that was not recorded. So how did my Representative, Eric Cantor (R-Va) vote?

I don't know. His responses to my correspondence on the subjects are always carefully crafted to betray no stance whatsoever. And there's nothing on his website either. Hmm.

This isn't over yet. And the outcome isn't clear at all. There's more to the story than just the headlines.

- Ralph


Day 109 of the WJMA Web Watch.