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"From the beginning, we have wanted to work with webcasters, and this temporary payment policy is another example of our commitment to the webcasting industry."
——John L. Simson, Executive Director, SoundExchange
SMALL WEBCASTERS GET
LAST-MINUTE REPRIEVE
Companies Won't Immediately Have to Pay New Royalty Fees
Smaller webcasters are getting an extension on copyright royalty payments that would have been due Sunday (10/20), which means they will not have to shut down… at least for now.

Record companies agreed Friday to defer most of the royalties they're after Congress failed to pass a bill authorizing a discount for those stations.

The webcasters will still have to pay up to $2,500 each in fees by Monday. But that is far less than the tens of thousands of dollars that many of them would have owed had they not been given the reprieve. The move by the RIAA saves a number of small Webcasting businesses from certain doom Sunday, when four years' worth of back royalties would have been due.

The extension came a day after the Senate recessed for the elections without approving copyright rate revisions negotiated between webcasters and the copyright holders.

The changes, unanimously approved by the House earlier this month, would have significantly reduced payment obligations for smaller webcasters, who complained that the higher rates could have put them out of business.

"From the beginning, we have wanted to work with webcasters, and this temporary payment policy is another example of our commitment to the webcasting industry,'' said John L. Simson, executive director of SoundExchange, the organization collecting payments on behalf of the music industry and the artists.

Only webcasters that would have qualified for reduced payments under the webcasting bill will be eligible for the extension.

Simson said the extension will be in effect until Congress could act on the bill.

The statement does not say what would happen if Congress never passes the bill, or if the president does not sign it, although the statement refers to ``this Congress,'' which adjourns at year's end.

Traditional radio broadcasters have been exempt from paying royalties to recording labels and performance artists on the grounds that the broadcasts had promotional value. In 1998, Congress passed a copyright law requiring such royalties from webcasters.

An arbitration panel proposed rates of $1.40 per song heard by 1,000 listeners, and the U.S. Copyright Office halved them in June and set the Sunday deadline for payments.

Under the settlement awaiting legislative approval, smaller webcasters could calculate payments based on how much they earn or spend. For a small webcaster that meant owing $7,700 instead of $24,000. Even the reduced rates are too high for some.

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