For folks in the business you are probably aware of this - but I thought I'd post this for others:
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Local Radio Reaches Deal on Internet Royalty Rates
02.17.09

By Chloe Albanesius

Copyright holders announced a deal Monday regarding royalty rates for local radio stations that broadcast their shows on the Internet.

The National Association of Broadcasters (NAB) and SoundExchange, which governs the music industry's royalty rates, reached a six-year deal with radio stations running Web channels.

Under the agreement, rates for simulcasts or web channels operated by local radio stations are reduced in 2009 and 2010 by approximately 16 percent, but will increase through 2015 - from $0.0015 per streamed sound recording in 2009 to $0.0025 per stream by 2015.

"Because of the explosive growth of music on the Internet, this is good news for everyone involved in music - from artists to labels to broadcasters and to fans," John Simson, executive director of SoundExchange, said in a statement. "It provides radio stations more opportunity to grow their online businesses in a stable business environment. Furthermore, it gives artists and copyright holders the opportunity to have more of their music played, while being fairly compensated, in more places as radio services expand their offerings on the Internet."

NAB also reached separate agreements with individual record labels that waive certain statutory format restrictions. This would, for example, allow certain artists to be played more often during a four hour period.

"Today's announcement provides local radio stations with the ability to enhance their local service with an online component, boosting listeners' access to music, local news and information," said NAB executive vice President Dennis Wharton. "By ensuring the continued viability of Internet streaming for America's radio stations, today's agreement further strengthens the relationship between free, local radio and our 235 million weekly listeners."

The two sides entered into negotiations under the auspices of the Webcasters Settlement Act, federal legislation that agreed to throw out royalty rates set by the Copyright Royalty Board (CRB) if stations and copyright holders could come to an agreement by Feb. 15.

The deal does not affect standalone, streaming Internet radio stations like Pandora, which are still trying to work out a deal with copyright holders. "Nothing to report yet on our end," a Pandora spokeswoman said Monday.

The debate over royalty rates took center stage in March 2007 after the CRB handed down royalty rates for Internet streaming at a price that Web radio stations considered financially ruinous.

CRB has since handed down a number of royalty rate decisions that differ depending on how the music is delivered.

In October, the CRB ruled that the royalty rate for permanent downloads, like those found via Apple's iTunes, will remain at 9.1 cents per download.

A month earlier, CRB ruled that sites offering interactive streaming – like selections found on imeem.com - and limited downloads – like those available on subscription services - will pay 10.5 percent of annual revenue as a "mechanical" royalty rate - or a fee that goes to songwriters, composers, and publishers.

At the end of 2008, meanwhile, CRB released a notice that suggests altering the reporting requirements for stations. CRB wants any entity that pays royalties under sections 112 and 114 of the Copyright Act, including Internet radio, satellite radio, digital cable radio, and any other radio-like services delivered by digital means to report every single song they play on the air to SoundExchange.

Still up for debate is whether traditional, terrestrial radio should also pay royalty rates. These stations have not had to pay because, they argue, exposure on their radio stations leads to increased record sales and profits for artists.

Lawmakers introduced legislation last year that would subject traditional stations to the same royalty rates, and that bill, H.R. 848, was reintroduced earlier this month.

And the Bill you should encourage the member of the House of Representatives that represents you is HCR 49. The bill that prevents the royalties from being charged to Radio stations.

You should do this because, once again, the artists are being ripped off. 50% of the additional fees that would be charged to Radio stations would go directly to the record companies. For what?

Every dollar the Radio stations would have to spend is one less dollar available for talent, promotion, etc.

Exactly!

Those guys are not exactly a value add these days. There should be NO fee for radio, as it by definition is a value add for the work in question.

I wish congress would sort through that from artist to listener. Who adds value and how does the artist realize it?

That has changed today big time. The implications for the majors are huge going forward and they know it big. So they are trying to lock it all in now, before that full discussion ever happens.

For note, this is also a bipartisan resolution (HCR 49). Arch-Conservative (Michele Bachmann) to Fairly Liberal(Norm Dicks) are all supporting this bill.

It's a good bill. Call and urge any/all (including the 111 co-sponsors of the bill) and give them your word. I'd especially give a call to Greg Walden, since he used to be in the radio biz at one time.