NAB tries to block fee reduction for Web radio

UPDATE Friday, 3:25 p.m PT: To include Pandora's letter to fans

Time is running out on a bill that could pave the way for Pandora and other Webcasters to pay reduced royalty rates, as traditional radio broadcasters are now trying to kill the legislation.

"The NAB is trying to suffocate the first viable alternative to broadcast radio and is reaching out of their industry to kill another."

--Tim Westergren, Pandora founder

As Congress readies to adjourn, representatives of the National Association of Broadcasters are lobbying lawmakers to stop legislation that would allow anyone streaming music over the Web, such as National Public Radio and Pandora, to continue negotiating with SoundExchange, the body that collects statutory rates for the music industry.

SoundExchange and the Digital Media Association (DiMA), which represents Web radio stations, have been at odds over the fees required to stream music, but the two sides are "optimistic that a deal can be reached," said Tim Westergren, founder of music service Pandora. He has long said the music service won't survive unless royalties rates come down.

The bill, introduced late on Thursday, would allow negotiations between Web radio stations and the music industry to continue and reach a settlement while Congress is adjourned. The two sides need the government's OK before reaching a settlement because they're after a statutory license. Such a license gives Web radio stations the right to stream any copyright songs they want, but also requires them to pay a negotiated rate.

Without the legislation, the talks could come to a halt and the deal could fall through, Westergren said. The bill is scheduled to be voted on the House floor Friday. Congress is expected to adjourn no later than noon on Monday.

Westergren said the NAB's efforts to kill the bill is nothing more than an attempt to stifle the burgeoning Web radio sector, which many in terrestrial radio see as a competitor.

"This bill doesn't effect the NAB at all," Westergren said. "This bill is designed to give us the time to resolve what it looks we're close to getting resolved. The NAB is trying to suffocate the first viable alternative to broadcast radio and is reaching out of their industry to kill another."

Responding to Westergren's comments an NAB spokesman issued this statement: "NAB has concerns related to Congress attempting to fast-track a bill introduced less than 24 hours ago that could have serious implications for broadcasters, Webcasters, and consumers of music. NAB spent more than a year trying to work out an equitable agreement on webcasting rates, only to be stonewalled by SoundExchange and the record labels. We will continue to work with policymakers on a solution that is fair to all parties."

Westergren said that there is nothing in the Webcasting bill that would block traditional broadcasters from reaching their own rate agreement.

Friday afternoon, Westergren issued a letter to fans asking that they call their congressman to voice their support. He signed off: "Thanks for helping Pandora survive."

Why would NAB oppose this? Unless they are explicitly trying to cripple webcasting. This bill only allows negotiations with SoundExchange to be codified and apply to the compulsory licensing provisions of Section 114, and not just apply to sound recordings from SoundExchange members.

It makes no sense for NAB to oppose this.

[inachu]

They better leave my shoutcast alone!

[mikeburek]

I'm calling all the radio stations during the rush hours and telling them I'm refusing to listen to them until they either start to pay the same fees at online radio stations, or radio stations don't have to pay such horrible fees. Then calling the companies advertising during those busy times and telling them I'm boycotting their product because their ad is supporting a business that is trying to be unfair and crush online raido.

[PhilipK1]

As far as I am concerned, THE NAB is trying to kill a competitor, as such is engaging in monopolisitc behavior. In the age of utter media control by the global elitiests, we need alternatives to corporate fed media with thier lies and sugar coatings. The establishment is affraid of the web, because its a threat to them.

[littleM]

It is every big&powerful organization's right to crush their competition wherever they can get away with it. The NAB is only doing what comes naturally. The fact that they are making enemies of the computer industry and their customers is secondary. It has worked for the oil industry, telecommunications, banking, the Bush Administration, and (our favorite ;^) the RIAA, so why not the NAB! The computer industry has never been as well organized at the television industry, and this is the price they pay.

[Kainchild]

The problem is the Media companies that own the radio stations also own the record companies.

They make more money from not having this bill since they don't have to pay themselves since they own both radio station and record label and have sweetheart deals with each other so they don't have to pay each other as well.

Where as internet radio stations only own their own station and end up having to pay the bill.

[gosmith7590]

I am so disgusted with the NAB - first, they tried to force HD Radio into Satellite radios (still not over), and now, they want to kill Pandora. The NAB slimeballs know that personalized music services are going to kill terrestrial radio. Oh yea, like the farce called HD Radio is going to save them.

[HighwayHome]

"I'm calling all the radio stations during the rush hours and telling them I'm refusing to listen to them"

I'm surprised anyone still listens to that garbage on the radio. Clear Channel has how many stations and absolutely no variety. These companies should be more worried about delivering a quality product than screwing over the little guy.