Congress approves royalty rate reprieve for Internet music broadcasters

<br>WASHINGTON (AP) _ Smaller Internet music broadcasters will be allowed to pay lower copyright royalty fees than they do now under legislation Congress passed on Friday. <br><br>The bill, which has been

Friday, November 15th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Smaller Internet music broadcasters will be allowed to pay lower copyright royalty fees than they do now under legislation Congress passed on Friday.

The bill, which has been sent to President Bush to be signed into law, mirrors an agreement worked out earlier by webcasters and the recording industry, which wants royalties for songs broadcast over the Internet.

The legislation allows the recording labels and artists who hold copyrights to set their own royalty rates for webcasters rather than use the standard imposed by the U.S. Copyright Office in June _ 70 cents for every song heard by every 1,000 people.

The Senate approved the bill late Thursday and the House followed Friday.

Internet radio _ either simulcasts of traditional over-the-air radio or Internet-only stations streamed over the Internet to computers _ is becoming popular as more people get high-speed connections.

But many webcasters are small and highly specialized, reaching only hundreds or thousands of people. They complained the rates imposed by the Copyright Office would be more than they could afford, forcing them out of business.

Webcasters and the recording industry worked out a deal last month that calculates rates based on an Internet broadcaster's revenue.

The House approved that deal, but it stalled in the Senate after religious broadcasters objected to language setting specific rates. The compromise legislation removed the wording.

The bill authorizes SoundExchange, the organization collecting payments on behalf of the music industry and artists, to reach rate agreements with small webcasters.

``We urge webcasters, broadcasters and others to meet us in good faith to find marketplace solutions, rather than fighting in court and other forums,'' said SoundExchange executive director John L. Simson. He said the record industry would use the rates worked out last month.

Simson said the legislation adds a six month extension for noncommercial webcasters _ such as college radio stations that broadcast online _ to pay retroactive royalties. The extension will allow for more negotiations to work out a separate deal with them, he said.

Radio stations have historically been exempt from royalty payments because they provide promotional value for songs. The recording industry long opposed the exemption and in 1998 got Congress to require royalties for digital services.