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House Drops Copyright Royalty Vote

The House dropped plans Tuesday night to vote on a bill that proposed to grant webcasters a six-month reprieve from controversial copyright royalty rates after the webcasters and the music labels indicated they were nearing a compromise.

Webcasters contend that the rates for Internet radio streams, which are retroactive to October 1998, are onerous and that without either a new deal or legislation, small Internet radio operators will be forced out of business. Both sides in the controversy said they preferred a compromise deal as opposed to a legally mandated solution by Congress.

In June, the Library of Congress provided marginal relief by slashing the Copyright Arbitration Royalty Panel's (CARP) original rates, cutting webcasting royalty rates by half, setting the per-performance fee at 0.07 cents per performance but that's still too high, say small webcasters.

Since then, the Recording Industry Association of America (RIAA) and webcasters have had ongoing negotiations to reach a compromise. As late as Tuesday afternoon, it appeared the talks were stalling and the House prepared to vote on legislation.

Last week, House Judiciary Chairman James Sensenbrenner (R-Wis.) introduced H.R. 5469, the Relief for Small-Business Webcasters Act, in an effort to give the webcasters some aid. Although the bill has not been heard in committee, House rules allow for a committee chairperson to introduce legislation directly to the House floor.

The bill was placed on what is known as the suspension calendar, which allows for "uncontested" legislation to quickly move through Congress but also requires a two-thirds vote to pass instead of the usual majority requirement. If the House passes the bill, the next hurdle would be Senate approval before Congress recesses Oct. 11 for mid-term elections.

"I have introduced H.R.5469, a bill to help webcasters remain in business while they are resolving a commercial dispute with record companies. If my bill is not enacted prior to Oct. 20, these small-business will be forced to shut down -- even though their case is still on appeal," Sensenbrenner said last week when he introduced the bill.

Briefs have already been filed with the U.S. Court of Appeals for the D.C. Circuit to appeal the Library of Congress' decision.

"Since the Librarian's decision is slated to take effect on Oct. 20, and the Court of Appeals has yet to set a trial schedule, the webcasting industry that Congress sought to nurture in 1998 may become extinct before the litigation officially ends. H.R. 5469 solves this problem by staying the implementation of the decision for six months, providing both sides the opportunity to have their day in court," Sensenbrenner said.