SENATE DRAGS FEET ON WEBCAST ROYALTY BILL

Legislation that would give small Webcasters a break on digital performance royalties failed to make it to the U.S. Senate floor for a vote last night. Today is the last day to consider the bill until the Senate convenes again after the Nov. 5 elections.

That would mean, starting Sunday (10/20), Webcasters making less than $1 million a year will have to start paying the rate set in June by the Librarian of Congress—0.07 cents per song per 1,000 listeners.

Insiders feel there is still a chance the Senate will deal with the legislation today. However, as the House—which passed the bill unanimously Oct. 7—is also expected to adjourn today, an amended Senate version likely could not be sent back to the House for approval, even if it were called back into a lame duck session.

The bill ran into trouble on the Senate floor as an unidentified Democrat jumped up to put a last-minute "hold" on the legislation late Wednesday. Any senator can delay a vote by placing a "hold" on legislation and remain anonymous. A "hold" on any bill that must pass under unanimous consent can doom it. Because the House has already adjourned, any legislation approved by the Senate has to be exactly the same as the House's legislation.

The Republicans were quick to jump on the Democrats for the action, with Sen. Orrin Hatch, R-Utah, accusing them of torpedoing the legislation.

While all the Republican senators appeared to be on board in the end, Sen. Sam Brownback, R-Kan., delayed a vote for at least a day as he pushed to limit the ability of the bill to set a precedent for future legislation, the royalty-setting process or judicial action. He also wanted to eliminate the call for a study to be included in the legislation of the impact of the Webcast royalty payment. Brownback, however, decided not to push his changes after it became evident that any change would kill the bill.

Rep. F. James Sensenbrenner Jr., R-Wis. wrote the House version of the bill, which a Senate committee eventually adopted. He was largely responsible for forcing the musicians, recording industry and small Webcasters to come to a deal.

Sources say Brownback was pushing for the changes because he and Sen. Robert Smith, R-N.H., were being pressured to block the bill by interest groups like the Digital Media Assn., the National Association of Broadcasters, Verizon Communications and various religious broadcasters.

There was also hope on the part of the GOP leadership that the measure's defeat could be used to paint the Democrats as anti-small business and anti-Internet in the coming elections if it went down.

Supporters of the legislation, which include the recording industry, musicians and small Webcasters, still held out hope the measure could become law or that two Dixie Cups and a piece of string be substituted as a means of radio transmission.

An RIAA spokesperson said: "The small Webcasters legislation had cleared both sides of the aisle, but it apparently failed to be included in the list of bills considered as final business at the end of the night. The Senate is in session Thursday, and we expect and hope that the bill will be taken up and passed then. With the House adjourning until the election, this bill must be passed by the Senate and sent to the President for his signature before October 20th."