Labor Day Deadline Set for Webcasters' Royalties Negotiations

Last week, the US Senate's chief sponsors of the Internet Radio Equality Act vowed to push for its expedited approval, if broadcasters and the SoundExchange performance rights organization haven't reached a compromise agreement by the time the Senate returns from its summer recess on Labor Day (September 3).

As Sens. Ron Wyden (D - Ore.) and Sam Brownback (R - Kan.) jointly stated, they're fully aware now of what appears to be a plan by the PRO to leverage a planned $500 USD minimum annual royalty fee per channel to apply to each stream or playlist a Webcasting service generates. Literally, each Pandora channel generated for a user could carry a $500 USD fee.

"Now we are hearing that the recording industry is attempting to use this aspect of the CRB decision to force webcasters to adopt recording restrictions far in excess of the controls that have governed broadcast content for decades," reads the senators' joint statement. "While we strongly support a negotiated solution, we will not allow the minimum fee issue to be used to force an agreement that mandates DRM technology and fails to respect the established principles of fair use and consumer rights."

A few weeks ago, SoundExchange publicly offered an amended version of that minimum fee. "Under the new proposal, to be implemented by remand to the [copyright royalties judges], SoundExchange has offered to cap the $500 USD per channel minimum fee at $50,000 USD per year," the company stated on July 13, "for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in 'streamripping' - turning Internet radio performances into a digital music library."

In other words, the organization would be willing to consider a cap for streamers who implement DRM. It isn't clear whether any DRM scheme would qualify, or any one that disables so-called "streamripping," or whether SoundExchange has a preferred supplier in mind.

Nevertheless, the senators' move to apparently expedite passage of the bill also helps to cover over the appearance of legislative inactivity on the matter during the summer break. The new webcasters' royalty rates already took effect last July 15.