There was a high level of drama this weekend as supporters of Internet radio, spurred by a plea from Pandora, voiced their support for the law passed by the House on Saturday. The Webcaster Settlement Act authorizes SoundExchange to negotiate new royalty agreements for Internet radio through February 15, 2009.

A few days ago the bill faced objections from the National Association of Broadcasters (NAB) and its passage was in doubt. It appears the efforts of a Congressman, not a Pandora-led campaign, led to to bill's passage. The NAB dropped its objections over the weekend after a meeting with Rep. Howard Berman, Chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property.

In a press release issued by many of the involved parties, SoundExchange director John Simson expressed his pleasure with the bill's passage. "This bill favors all webcasters and simulcasters – large and small," he said. "It paves the way for SoundExchange to use the coming months to pursue helpful solutions that allow all services to focus on business development."

"We're not done," wrote Pandora's Tim Westergren, who loudly championed the bill as the NAB's opposition appeared. We still need to get the bill through the Senate, which looks like it will be voting on the bill on Monday."

Negotiations outside of the rates set by the CRB may save much of Internet radio. Labels and artists, I honestly believe, understand as much and appreciate the valuable role webcasters play. Killing off Internet radio services would not be in labels' best interest. The record industry's unflinching stance was mistakenly considered by many to be ambivalence about webcasting's future. The better interpretation is the record industry was wary of giving away too much but was going to negotiate sooner or later. Now the predictable outcome will happen and both sides can work to agree upon royalty rates that are in the best interests of all parties.

Background reading: The Future of Music Coalition's statement on CRB's new royalty rates.