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Royalties for small Webcasters clear Congress

Small Webcasters are cheering legislation that passed both chambers of
Congress last week that allows copyright owners to offer Webcasters a
percentage-of-revenues royalty rate, essentially allowing the parties to mutually
agree to override a fee schedule established by the Copyright Office last

The bill, which still needs the president's signature, was actively supported
by virtually all players on both sides of the debate this year, including the record
industry, artist representatives, large Webcasters, small Webcasters, college-radio representatives and religious broadcasters.

The bill was supported by large broadcasters, which feared that an
earlier version blocked by retiring Sen. Jesse Helms (R-N.C.) would have set a
royalty precedent large broadcasters feared.

Although commercial broadcasters were exempt, they opposed a requirement that
Web-only streamers must fork over a huge portion of their gross revenues -- more
than 10 percent -- for the right to play music.

That's not just gross revenue from Webcasting -- that's all revenue from audio
or other entertainment programming and any other media or
entertainment-related businesses.

To add insult to injury, revenue from any Internet or wireless services would
be added. If a similar deal applied to commercial broadcasters, revenue from
radio and TV ads would be included in the royalty calculations, as would cash
from any additional entertainment businesses the station owners control.

The new legislation simply allows voluntary agreements without liability for
violating the Copyright Office fees. Commercial broadcasters with Web operations
must still comply with the copyright fees.