Congress protects Internet radio

Internet radio operators expressed cautious optimism regarding congressional approval of a deal designed to help them survive a recent steep hike in royalty rates. "This legislation is not the final answer, but it is an essential step toward a lasting and much-needed solution," said SaveNetRadio spokesman Jake Ward in a statement Wednesday, referring to Senate approval of the Webcaster Settlement Act of 2008. Webcasters and SoundExchange, a nonprofit that collects royalty payments from digital radio companies, have been trying to negotiate an agreement since the Copyright Royalty Board in early 2007 increased rates for digital radio by at least 300%. According to SaveNetRadio, numerous Webcasters have felt an "immediate and devastating effect," with three of the most popular operators -- AOL Radio, Yahoo! Radio and Pandora - having already limited listener access, shut down or announced a likely shut down if the rates aren't dramatically lowered. But since Webcasting requires a government license - and with Congress about to recess with no rate agreement reached yet -- the Senate approved legislation that would confer congressional acceptance of any agreement Webcasters and SoundExchange might hammer out before recess ends.