Royalty rate negotiations between SoundExchange and webcasters are presumably underway as the February 15 deadline fast approaches. Only a deal for public broadcasters has been announced. Nothing has been heard as of yet from the Digital Media Association (DiMA) or from Small Commercial Webcasters concerning an agreement with SoundExchange.

The February 15 deadline was set by the Webcaster Settlement Act (H.R. 7084). Passed by Congress in late October 2008, the legislation gave SoundExchange and Internet radio broadcasters the legal authority to settle the webcaster royalty rate debacle for both the 2006-2010 and 2011-2015 terms after the 110th Congress adjourned (RAIN coverage here).

This past week, SoundExchange sent out what they called the “Small Commercial Webcaster Settlement Agreement” (RAIN coverage here). The so-called “agreement” — not the result of negotiations with the CRB-participant group called “Small Commercial Webcasters” — would require webcasters to give up a variety of rights to qualify for royalty rates essentially the same as those in 2002’s Small Webcaster Settlement Act (SWSA). Provisions include barring all agreeing webcasters from CRB proceedings to determine royalty rates for 2011-2015, setting an annual revenue cap of $1.25 million, and requiring larger companies purchasing a small webcaster to pay royalties retroactive to 2006 under the CRB-set royalty rate. Digital Music News called the proposal “fishy” and full of “uncomfortable handcuffs.”

In January, public broadcasters completed a deal with SoundExchange which settled on a $1.85 million royalty payment for the 2006-2010 term. The agreement included over 450 public broadcasters, including NPR and CPB-supported stations. The deal also requires “usage reports,” detailing song and artist play, and for NPR to withdraw its appeal of the 2007 CRB royalty determination (RAIN coverage here).

Check back to RAIN for continuing coverage of the webcaster royalty discussions, as new developments surface.

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