Congress expected to move on copyright, Internet radio issues

Bill that would allow government to sue pirates has been watered down and Web radio stations may be close to cutting deal with music industry on royalty rates.

With Congress due to adjourn Friday, lawmakers worked late Thursday evening to resolve a couple of high profile digital-entertainment issues.

A "Webcasting" bill was introduced in Congress on Thursday that would allow SoundExchange, the body that collects royalties on behalf of the music industry, to reach a settlement on royalty rates with the Digital Media Association (DiMA) after Congress adjourns.

SoundExchange and DiMA, which represents Web radio stations such as Pandora, have been at odds over the fees charged to stream music. Sources close to the talks say the introduction of the bill signals the two sides are close to cutting a deal. "They wouldn't be seeking the government's blessing unless they were close," said one person with knowledge of the talks.

The two sides need the government's OK to reach an agreement because they're after a statutory license. Such a license gives Web radio stations the right to stream any copyright songs they want, but also requires them to pay a negotiated rate.

The bill would give the two sides until mid-December to cut a deal. Pandora and other Webcasters fiercely object to a decision by the Copyright Royalty Board--a three-judge panel that sets rates for copyright statutory licenses--to double the current $.0008 price per stream by 2010.

The board also set a $500-a-year fee for each channel a Webcaster broadcasts.

Earlier this week, DiMA and the recording industry agreed to a deal that called for interactive music and limited download sites to pay 10.5 percent of annual revenue as a royalty rate. Interactive music sites are those that enable users to choose the music they want to listen to (such as iMeem). Limited downloads sites are those that deliver music to users as long as they continue to pay a fee. Music subscription services such as Napster and Rhapsody offer limited downloads.

Another tech-related issue Congress acted on Thursday was the Enforcement of Intellectual Property Rights Act, which passed the Senate Judiciary Committee in a 14-4 vote earlier this month.

President George Bush indicated he might veto the proposed legislation on Tuesday. In a letter to the Senate Judiciary Committee this week, the Bush administration said it would oppose authorizing the U.S. Department of Justice to bring civil suits against file sharers. Since then, that part of the bill has been removed and it is once again working its way through the Senate.

Music insiders say they are confident the bill will pass the Senate by early Friday and return to the House where it already passed once by a wide margin.

 

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