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Record labels, publishers deadlock on Net fees

Music publishers and record labels reach an "impasse" in negotiations to create standard payments for online music subscription services.

Music publishers and record labels have reached an "impasse" in negotiations to create standard payments for online music subscription services, a major publishers' group says.

The National Music Publishers Association (NMPA) filed a petition with the U.S. Copyright Office on Wednesday asking regulators to step in and establish royalty rates for downloading and streaming music online.

The Recording Industry Association of America had filed a similar plea in late November. But the publishers said they held off until talks disintegrated further.

"This is a very disappointing turn of events," said NMPA chief executive Edward Murphy, noting that the publishers had already struck independent deals with individual online music distributors such as MP3.com. "We regret that our discussions with the recording industry have not been as constructive."

At issue are the music labels' abilities to create subscription services that allow the streaming of a variety of music or to offer subscription access to song downloads in a form that is time-limited or otherwise restricted.

Universal Music Group has already tried to test such a service though its new-music subsidiary, Jimmy and Doug's Farmclub. But a group of publishers promptly filed suit, charging that the trial service violated their copyrights in much the same way that MP3.com or other former industry renegades had.

Some resolution of the copyright issue must be reached before the major labels can launch wide-ranging subscription services.

RIAA officials said they would still pursue negotiations toward services that the labels are "anxious to launch," although talks have apparently ceased for now.

"We, too, are disappointed that we have been unable to agree," Cary Sherman, RIAA's general counsel, said in a statement. "We remain hopeful, even though petitions for arbitration have been filed, that continued discussions among the parties will enable us to arrive at a business solution."