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RIAA, Net Radio, b'casters, Helms reportedly agree on new 5469

BY PAUL MALONEY
Through industry sources, RAIN has learned that webcasters and representatives of broadcast industry groups, the recording industry, and members of Sen. Jesse Helms's staff were busy today hammering out an agreement more acceptable to a wider segment of the industry than the controversial HR 5469.

The "lame-duck" session of Congress, following elections but before newly-elected members begin their terms, began yesterday.

Now, a third version of a bill called HR 5469 would remove all actual specific rates and percentages from the law, and would give the Recording Industry Association of America (RIAA) and SoundExchange the authority to cut individual private deals with webcasters on the "retroactive" royalties (those royalties based on sound recording performances made between October of 1998 -- the passing of the Digital Millennium Copyright Act -- and September 1, 2002), a power they don't currently have.

While we couldn't report on all the terms yet, RAIN sources familiar with the specifics of the bill have said this deal is significantly more agreeable to all webcasters.

Rep. Jay Inslee (D-WA), in a press release, indicated his support of today's "working meetings to modify the original Small Webcaster Amendments Act (HR 5469) [see RAIN here] by Senators and Members of Congress, RIAA/SoundExchange, small webcasters and the National Religious Broadcasters."

Inslee, along with Congressmen Rick Boucher (D-VA) and George Nethercutt (R-WA), introduced the Internet Radio Fairness Act (HR 5285) in July (see RAIN here). That proposal was largely abandoned by the involved parties when House Judiciary Committee Chairman James Sensenbrenner introduced the original version of HR 5469, a six-month moratorium on webcasting sound recording royalty fees. It was intended to save small webcasters from the impending "retroactive" royalties, which were due October 20th.

After objection by the Committee's ranking Democrat John Conyers (D-MI), at the behest of musicians unions, HR 5469 was shelved. Sensenbrenner called webcasters and the RIAA to his office and demanded a deal be worked out. That deal, which changed HR 5469 to a "small webcaster" deal, sparked a divisive controversy in the webcasting industry.

HR 5469 -- before today -- set special royalty rates and minimum payments for defined "small webcasters" and "noncommercial, non-FCC webcasters." Additionally, record keeping requirements were amended, and a report to Congress on the effect of third-party relationships and the possible detriment of percentage-of-revenue based royalties.

Please see RAIN tomorrow for more details on this developing story.

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