Compromise on Webcast Royalties Sought

With a lame-duck session of Congress about to begin, religious broadcasters and record labels are seeking a last-minute compromise on royalties that could clear the way for a bill to aid small Internet broadcasters.

Meetings between the National Religious Broadcasters Assn. and the Recording Industry Assn. of America are expected to begin today, said Frank Breeden, president of the Nashville-based Gospel Music Assn. The goal is to clear the objections that derailed a bill offering reduced royalties to some small Webcasters.

The religious stations are close to Sen. Jesse Helms (R-N.C.), a former broadcaster who blocked the bill last month, but they’re not the only ones criticizing HR 5496. The others include large and mid-size Webcasters, over-the-air broadcasters and college stations. All contended that the royalties in the bill were too high.

A new group of small online broadcasters, the Webcaster Alliance, has formed to lobby against the bill. The group wants Congress to overhaul the royalty-setting process, lobbyist David LeGrand said.

At issue are the fees that online radio stations must pay labels and artists for the songs they play.

The librarian of Congress ordered commercial Webcasters to pay about a penny per hour of music broadcast to each listener, but many stations complained that the royalties would drive them out of business.

A few small commercial Webcasters negotiated a compromise last month with the RIAA and artists groups, agreeing to pay 8% to 12% of their revenue or 5% to 7% of their expenses. But a House-passed bill to put the deal into law -- and extend it to any Webcaster with less than $1 million in revenue since November 1998 -- was stopped by Helms.

Several Webcasters and lobbyists said Helms’ staff is trying to come up with an alternative that would help all Internet broadcasters. It’s not clear what that might be, or whether the proposal could be squeezed into the lame-duck session.

A spokesman for Helms could not be reached Thursday.

A spokesman for the RIAA said the bill offers the best deal to all parties, including small Webcasters. But if Helms wants to talk about changes, “we will always do that,” he said.

Breeden said the main concern of religious broadcasters is that the bill could set a precedent for the royalties they have to pay. In the new talks , “we’re talking about whatever it would take for the NRB to remove its objection to the bill,” he said.