Pandora to Congress: Vote now, we're running out of time

Vote regarding royalty fees for Internet radio is set for Saturday, after start-ups like Pandora insist that they can't wait any longer for financial reasons.

The congressional vote regarding royalty fees for Internet radio has been moved at the last minute to 11 a.m. EDT Saturday, according to Pandora, one of the start-ups that has been pushing for this vote in the wake of pressure from the National Association of Broadcasters (NAB).

"It has to happen tomorrow," Pandora chief technology officer Tom Conrad said in an interview with CNET News on Friday night. The start-up has put up a blog post encouraging fans and users to call their congressional representatives through the night to support the cause. "The timing issue that's critical here is that many of the Internet radio providers, Pandora included, for financial reasons really need to have this issue resolved before 2009." Additionally, members of Congress will soon be on the campaign trail for their own re-elections and are already occupied by the Wall Street crisis.

To put it more bluntly, the Internet radio services could run out of money before a resolution is reached.

Earlier on Friday, it was revealed that the NAB had been lobbying members of Congress to halt legislation that would keep up talks between the Internet radio services and SoundExchange, which represents record labels and performers.

Conrad said that "it's not clear" as to what the NAB's motivations are, but speculated that it might be because the trade group feels threatened by the rise of Internet radio. "They operate the broadcast towers all over the country," he said. NAB insisted earlier on Friday that speeding up the negotiations would be rushed and unbalanced.

Pandora CEO Tim Westergren said in an August interview with The Washington Post that last year's Web radio royalty hike would consume 70 percent of Pandora's revenue and that the start-up could be close to shutting down as a result. Some allegations of "Chicken Little" melodrama ensued, but Conrad assured CNET News on Friday that the company did not regret those remarks.

"I think our message all along for the 18 months we've been negotiating this has been dramatic perhaps, but certainly not hyperbole," Conrad said. "Pandora's a venture-backed company. Without some kind of change, there's just no way for our investors to feel like it's a good investment."

 

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