BY PAUL MALONEY
With the promise of finally reaching an accord, the record industry and artist groups are negotiating with broadcasters and webcasters this week — aiming to deliver a workable agreement to Congress by Friday.

Rep. James Sensenbrenner (pictured right), chairman of the House Judiciary Committee, announced yesterday that his proposal for a six-month stay on webcasting fees was pulled from the voting agenda (see RAIN coverage here) after both sides agreed to reach a comprehensive settlement by week's end.

After four years, why now?
Until now, the two sides have found little upon which to agree throughout their often bitter dealings over webcasting royalty rates.

Indeed, four years of negotiations have not been able to yield a compromise acceptable by both the music industry and a majority of webcasters. But the deal made yesterday, which includes Friday's deadline, offers new hope.

"The parties involved have assured me they will reach a comprehensive agreement by Friday that will be fair to webcasters, record companies, and recording artists as well as provide the economic certainty and stability necessary for webcasters large and small to succeed," Sensenbrenner said in a released statement.

He added that he expects Congress to use the resultant deal to create legislation for the industry.

Finally moving forward
An agreement would mean the end of a long period of uncertainty for webcasters, who have tried to build their businesses and attract capital without knowing exactly what their royalty obligations would be. Likewise, the deal would mean the wait is over for record labels and artists who stand to collect the webcasting royalties — not to mention most likely reap the promotional benefits of a vibrant Internet radio industry.

As reported in RAIN yesterday, sources inside the negotiations have commented that the new deal would not only override the Librarian of Congress's determination on webcasting royalty fees (decried as inadequate by both sides), but would eliminate the need for the next scheduled arbitration session to update the rates next year.

That process, and the arbitration body itself, referred to as CARP (Copyright Arbitration Royalty Panel), have been the subject of criticism by webcasters, as well as lawmakers like Rep. Jay Inslee (D-WA) and Rick Boucher (D-VA) (see RAIN here).

While RAIN was unable to make contact with most of those involved in the negotiations, we will continue to report on details of the proposed agreement as they are made public, along with analysis of any developments.

The proposed agreement may not be a resolution for everyone. It is likely that this deal would include provisions for broadcasters, large corporate webcasters (like AOL, Yahoo!, and MSN), and the smaller commercial webcasters (like Radioio, Beethoven.com, and 3WK) — and of course those negotiating on the side of the copyright owners and performers (the RIAA, AFTRA, AFM, etc.). But according to Collegiate Broadcasters, Inc. vice chair Will Robedee, noncommercial webcasters have been "shut out." "We must send a message, loud and clear, that Educational and Community stations must be included in any negotiated settlement that will become law," Robedee (pictured) writes on his Save Our Streams website. The site encourages visitors to contact their Congressional representative and urge them to make sure provisions for noncommercial stations are included in any agreement that would become law. A spokesman for the Judiciary Committee office could not verify exactly which parties are involved in negotiations, but sources seem to indicate that no one at the table stands to represent educational, community, and institutional radio stations. Nor does there seem to be representation for the category known as "hobbyists," those webcasting without a plan for a business, yet without the "mission" of educational or civic benefit. "These stations are not seeking a means to avoid paying artists and labels, rather they are seeking a means to continue to webcast and support those people and organizations via exposure and royalty fees," Robedee writes.

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Kurt is in New York City today attending the Streaming Media East conference. He is scheduled to appear on a panel with Live365.com EVP, Corporate Strategy & General Counsel John Jeffrey and Digital Media Association Executive Director Jonathan Potter. The panel will be moderated by Alan Wallace, CEO, Reward Marketing, Inc. and is scheduled for 4pm.

From a Salon.com article by former Gavin managing editor Todd Spencer: "When I learned last spring that protesters were organizing demonstrations at the September convention of the National Association of Broadcasters in Seattle, I knew I should be there. The NAB-backed deregulation of the radio industry in 1996 helped sink the small but legendary radio trade magazine I worked at earlier this year, so I had a lot of time on my hands.

"And I wasn't alone. As managing editor of Gavin magazine, I knew many of the program directors, music directors, promotions directors and on-air talent who had been handed their headphones and shown the door in the last six years -- 10,000 radio-related jobs lost in total, according to one estimate.

"I was angry, but not just about being laid off. The consolidation of the radio business in the hands of a very few, powerful corporate owners has devastated the quality of commercial radio. Every year, radio programming is produced with smaller and smaller budgets by fewer and fewer people with more and more smoke and mirrors: cookie-cutter music formats, overuse of syndication, tighter, more repetitive playlists filled with inferior songs, one programming staff operating a cluster of stations and commercial breaks that never seem to end...

"I was shocked at the conviction among the executives that big radio offered listeners more diversity than small radio did. This was something NAB president and CEO Edward Fritts (left) alluded to in his opening remarks when he said, referring to the protesters: 'Let me say a word to our very vocal critics with us here in Seattle, who claim radio has become homogenized and lacks diversity. The facts show otherwise. Broadcasters know that in all respects diversity is good for radio and is on the rise.'..

"The Telecommunications Act of 1996 was written and ratified for the very few people in this country who buy and sell radio stations -- Not for the people who make radio, and not for the people who listen to it."

Read Spencer's entire article, from yesterday's Salon, here.

From The Onion: "The Recording Industry Association of America filed a $7.1 billion lawsuit against the nation's radio stations Monday, accusing them of freely distributing copyrighted music.

"'It's criminal,' RIAA president Hilary Rosen said. 'Anyone at any time can simply turn on a radio and hear a copyrighted song. Making matters worse, these radio stations often play the best, catchiest song off the album over and over until people get sick of it. Where is the incentive for people to go out and buy the album?'..

"Especially distressing to the RIAA are radio stations' 'all-request hours,' when listeners call in to ask radio announcers, or 'disc jockeys,' to play a certain song...

"'In some instances, these stations actually have the nerve to let the caller "dedicate" his act of thievery to a friend or lover. Could you imagine a bank letting somebody rob its vaults and then allowing the thief to thank his girlfriend Tricia and the whole gang down at Bumpy's?'..

"Outraged by the RIAA suit, many radio listeners are threatening to boycott the record companies.

"'All these companies care about is profits,' said Amy Legrand, 21, an avid Jacksonville, FL, radio user who surreptitiously records up to 10 songs a day off the radio. 'Top 40 radio is taking the power out of the hands of the Ahmet Erteguns of the world and bringing it back to the people of Clear Channel and Infinity Broadcasting.'"

Please read this satire piece from The Onion here.