Saturday, September 27, 2008

Additional coverage of H.R. 7084

Perhaps you saw my post (which I placed on two other blogs) about Pandora radio and H.R. 7084. There is additional coverage of this issue, including coverage from Gizmodo:

Pandora honcho Tim Westergren told us today that he and other web broadcasters were about to reach a settlement with SoundExchange, the RIAA and the Copyright Royalty Board. They needed a bit more time, which would be granted by a new bill, HR 7084. Though the bill, introduced by Congressman Jay Inslee and others, only extends the negotiation period, Westergren told us that it's the clincher. "We've negotiating for over a year, but people on both sides are now feeling optimistic about getting a deal done," he says. "This bill is a signal of that. We need more time, but we're getting there."

Enter the NAB, who issued the following statement to us and others from Executive VP Dennis Wharton:

"NAB has concerns related to Congress attempting to fast-track a bill introduced less than 24 hours ago that could have serious implications for broadcasters, webcasters, and consumers of music. NAB spent more than a year trying to work out an equitable agreement on webcasting rates, only to be stonewalled by SoundExchange and the record labels. We will continue to work with policymakers on a solution that is fair to all parties."

The funny part about this, at least to Westergren, is that this bill and subsequent settlement would actually grant broadcasters lower fees on the internet, too. "If this falls apart, [NAB members] pay more for their webcasts, too," he says. "So there's only one interpretation, that they are trying to kill us."

Gizmodo linked to a CNET article:

Westergren said the NAB's efforts to kill the bill is nothing more than an attempt to stifle the burgeoning Web radio sector, which many in terrestrial radio see as a competitor.

"This bill doesn't effect the NAB at all," Westergren said. "This bill is designed to give us the time to resolve what it looks we're close to getting resolved. The NAB is trying to suffocate the first viable alternative to broadcast radio and is reaching out of their industry to kill another."...

Westergren said that there is nothing in the Webcasting bill that would block traditional broadcasters from reaching their own rate agreement.

And if you think this is only for Pandora, check this entry in the SOMA FM blog.

DiMA and SaveNetRadio announced that H.R. 7084: “Webcaster Settlement Act of 2008” was introduced, and clears a path for private negotiations to continue while Congress is in recess.

Basically this bill says: when the parties agree to a settlement, the CRB publishes it in the Federal Register, and it becomes an option qualified webcasters can elect, by re-wording the Small Commercial Webcasters provisions from 2002 to be applied to all webcasters, and for the period of 11 years from 1/1/2006.

So effectively, this will allow any SoundExchange settlement to be codified, and apply to all sound recordings, not just those represented by SoundExchange. I think is a good thing.

And here's what DiMA said:


* In March 2007, the Copyright Royalty Board (the government body that determines royalty rates for the use of music over Internet radio services) issued a rate decision. Since then, DiMA, NPR, RIAA and SoundExchange have been negotiating alternative royalty rates that will address unique business and political circumstances.

* In the last several weeks the negotiations have made progress. Because Internet radio royalties operate under a government license, Congressional authority is required to allow any negotiated settlement to take effect.

* Accordingly, HR 7084 authorizes SoundExchange, on behalf of copyright owners and performers, to negotiate an alternative royalty agreement before the end of the year with DiMA and NPR, and any other Internet radio service. It will benefit all webcasters, including NPR, college webcasters, small webcasters and broadcasters who put their stations on the Internet.

* It is bipartisan legislation sponsored by Reps. Inslee, Berman, Smith, Conyers and Manzullo.

* This bill does not affect the scope of performance rights or any underlying copyright law, and it does not impact broadcasters. It only clears the path for private negotiations to continue while Congress is in recess.

* It is scheduled to be considered today under Suspension of the Rules in the House.

But Kurt Hanson detailed what the NAB apparently did next:

A respected Congressional news blog is reporting this afternoon that NAB lobbyists are trying to block the passage of the legislation that would help resolve the Internet radio royalty crisis and that the House is scheduled to vote on later this evening.

Astounding though this seems, RAIN‘s sources among Congressional staffs confirm that the NAB is perceived to be trying to block the bill’s passage. This is despite the fact that the bill, which is scheduled to come up for a House vote later this evening, does nothing more than permit negotiated deals to take effect — including any deal that might be negotiated between NAB members and SoundExchange.

Here's the Tech Daily Dose report:

*** Developing Story *** Updated Friday @ 5:13 pm ET

The National Association of Broadcasters is reportedly trying to kill a bill introduced by Rep. Jay Inslee, D-Wash., that supporters say would allow months of royalty negotiations between music and Internet industries to continue. The bill, which is scheduled to be taken up in the House shortly, authorizes digital royalty collector SoundExchange, on behalf of copyright owners and performers, to negotiate an alternative royalty agreement before the end of the year with any Internet radio service.

A source close to the issue told Tech Daily Dose that lobbyists for AM and FM radio are worried about competition from webcasters and extinguishing the bill would throw a wrench into the royalty talks. "If they kill this, that means they're able to kill the negotiations," the source said. The bill does not affect the scope of performance rights or underlying copyright law and does not impact broadcasters, SaveNetRadio said in a statement. The bill only clears the path for private negotiations to continue while Congress is in recess, the grassroots advocacy group said.

Although a Friday San Jose Mercury News post didn't mention HR 7084 or the NAB, it did discuss Pandora's plight:

"Pandora is in trouble. Frankly, all Internet radio stations are in trouble because of the rate hike imposed on them," said James McQuivey, an analyst with Forrester Research.

Internet radio companies must now pay record labels and artists double the former fees they paid to stream music online in the wake of a federal board's decision last year. Traditional radio companies, including satellite broadcasters, don't pay such high fees.

The issue is still being negotiated....

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