For radio, a Web royalty check

Broadcasters, RIAA agree on fee that stations will pay to stream music on the Internet
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Radio broadcasters have reached an agreement with record companies on royalty fees that radio stations must pay in return for a blanket license to stream their signals over the Internet, sources say.

The two sides—major radio companies vs. the Recording Industry Association of America and its members—have been in arbitration at the Copyright Office. Webcasters also are trying to establish a fee but have not been able to do so, sources said.

Congress required radio stations and Webcasters to pay royalties when it passed the Digital Millennium Copyright Act in 1998. Radio stations, represented by the National Association of Broadcasters, opposed the ruling in federal court but lost.

The settlement has not been made public, and the arbiters are under no obligation to accept it, although they are likely to.

The Copyright Office still must set a rate that applies to all parties. The agreement applies only to radio stations and record companies, not to Webcasters.

A decision is expected Feb. 20. It must be approved by the Librarian of Congress and can be appealed.

One issue caused some consternation among the NAB directors, sources said. To qualify for the compulsory copyright license, anyone who plans to stream interactive content must meet a list of criteria, such as not pre-announcing songs. Radio stations are hard pressed to meet that requirement. Under the settlement, record companies would give waivers to radio stations.

Members of the NAB board wanted to ask Congress to rewrite the law so that waivers would not be necessary, but members of the TV board were opposed because they do not want to open a discussion about putting TV signals on the Web. Whereas radio stations are happy to have listeners all over the globe, TV stations want their signals to be kept within local markets.

Ultimately, the NAB boards agreed not to ask for a legislative fix.

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