Call your congressman and tell him to keep web radio in business

The long running rift between web radio operators and royalties collection organization SoundExchange appears to be drawing to a close, with both sides reportedly “optimistic” that a suitable royalties deal can be reached.

Despite that news, however, it appears that a new foe has entered the ring: the National Association of Broadcasters, which represents companies like Clear Channel Communications and terrestrial radio stations in the U.S.

You may recall the royalties scare brewing over the past year between companies such as Pandora and SoundExchange, which would force cash-starved web radio stations to pay more than double their previous royalty rates. The situation recently became so bad, in fact, that a number of large webcasters claimed they were on the edge of the figurative cliff.

The good news? That particular disaster is averted.

Legislative accords between the Digital Media Association (DiMA), which represents streamcasters, and SoundExchange were making good progress through Congress: a new bill, called the Webcaster Settlement Act of 2008, would fix royalty rates to no more than $500 a year and gives the two sides until December to iron out the details.

The National Association of Broadcasters, however, stepped in with its objections: its lobbyists are working hard to make sure H.R. 7084 doesn’t leave Congress’ floor.

Pandora’s founder, Tim Westergren, says things are becoming desperate: “Large traditional broadcast radio companies have launched a covert lobbying campaign to sabotage our progress,” he writes in an e-mail to fans.

“This is a blatant attempt by large radio companies to suffocate the webcasting industry that is just beginning to offer an alternative to their monopoly of the airwaves.”

Westergren wants fans of the station to speak up – right now. Time is of the essence: all progress between SoundExchange and DiMA could fall through if this bill is not passed, consequently putting a large portion of internet radio stations out of business. Moreso, Congress is set to adjourn for recess Monday at noon.

If you don’t act on this now, much of the internet’s streaming radio could disappear overnight. The royalties situation for webcasters has been doom-and-gloom over the past year or so for good reason – the new royalties rates, in some cases, exceed the income of many streamcasters. Right when they’re given the opportunity of relief, the NAB steps in with a knife.

Fortunately, the bill made it through the House late Saturday. It will be voted on by the Senate Monday morning.

Westergren wants you to call your senator and show your support for H.R. 7084, which needs to be approved in the Senate before negotiations can continue.

Congress is currently working extended hours, so even calls this evening and over the weekend should get answered,” writes Westergren. “If the phone is busy, please try again until you get through. These calls really do make a difference.”

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