"Pandora, Webcasting appear headed for Senate victory"
Posted by Greg Sandoval

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Twitter Stumbleupon E-mail Print Technology companies are supposed to
be wide-eyed novices on Capitol Hill. I've read that they don't spread
enough money around or aren't hip to the ways of Washington.

Regardless of whether that's true, this weekend saw Pandora, a
struggling music service, whip up enough support among fans of Web
radio to help persuade the House of Representatives to unanimously
pass the Webcaster Settlement Act on Saturday, according to multiple
people associated with the bill. The proposed legislation is designed
to give Webcasters added time to negotiate a settlement with the music
industry on reduced royalty rates.

Lower rates are vital to the survival of Internet radio stations,
according to Tim Westergren, Pandora's founder, who pleaded with the
public on Friday to call their congressional representatives and
demand they support the bill. Webasters and the music industry are
close to reaching an agreement, but if the legislation fails to pass
it could push the discussions back months and deliver a financial
death blow to some Webcasters, Westergren said.

According to one Washington lobbyist, the phone calls from the public
were one of the factors that helped the legislation pass in the House
and now have it headed for a Senate vote within the next two days
without any major parties gunning for it.

Two other factors, however, likely played larger roles in getting the
bill through the House: the lobbying efforts made by National Public
Radio and some 12th-hour deal making to appease traditional radio
broadcasters, who were trying to kill the legislation, according to
sources.

"You know," said a fatigued Westergren, "it was a nerve-racking day."

In crunch time, Howard Berman came through
Saturday started with lobbyists for the National Association of
Broadcasters "making a huge press in the House, blasting every
(Congressional representative's) office" with appeals to kill the
legislation, according to a lobbyist with knowledge of the events.

NPR, the publicly and privately funded nonprofit organization created
by Congress in 1970, has plenty of friends in Washington. The group,
which produces Webcasts and supports the bill, e-mailed members of
Congress on Saturday, explaining how much it needed the legislation
and that a deal on a new royalty rate couldn't be struck without it,
sources said.

The real deciding factor came when Rep. Howard Berman (D-Calif.) met
with members of the NAB. They told him that they feared their Web
competitors would get a deal done first. Under the terms of the
legislation, SoundExchange, the body that collects royalties and is
part of the Recording Industry Association of America, has until Dec.
15 to negotiate a new rate. The NAB apparently was worried that the
deadline didn't give the organization enough time to strike its own
royalty agreement.

"Berman said 'Fine, we'll extend the date until Feb. 15, which gives
you two more months to talk,'" said one music-industry source with
knowledge of the discussions. "There isn't anything in the act that
prevents traditional broadcasters from reaching their own royalty
rate."

That did the trick, according to the source. Dennis Wharton, an NAB
spokesman confirmed Saturday night that the NAB met with Berman and
that the deadline was extended. He said the trade organization has
dropped its opposition in both houses of Congress.

This means that unless something unforeseen happens, the Webcaster
Settlement Act should pass, according to insiders.

Then what? Internet radio stations must still reach an agreement with
the artists and labels about how much to pay them for streaming their
music over the Web. Sources on both sides say they are closer than
ever before to a number, and should the Webcasting bill pass in the
Senate, they predicted that a deal could be reached as early as next
month.

http://news.cnet.com/8301-1023_3-100...ag=mncol;posts

The NAB dropped its opposition - bad news for Satellite and HD Radio!
Ha, Ha, Eduardo!