Just when it appeared a compromise had finally been reached regarding webcaster royalty payments, the bill now appears dead in the Senate:

Legislation that would steeply discount the royalties small webcasters will pay for streaming music was dealt a potentially fatal blow Thursday night when it failed to clear the Senate.

The bill was killed — at least until the Senate reconvenes Nov. 12 — after a Republican lawmaker raised objections to the measure.

Sources with inside knowledge of the proceedings said that Sen. Jesse Helms of North Carolina placed a last-minute "hold" on the legislation, which effectively prevented it from being considered by the Senate. A hold is an informal, anonymous way senators can delay legislation.

Supporters of the legislation expressed dismay at the last-minute tactic, which sources said was prompted by religious broadcasters.

"We are surprised and disappointed the small webcast legislation was not passed as expected by the Senate Thursday night," said Hilary Rosen, chairman and CEO of the RIAA. "We hope the senators will work this out quickly. All parties interested in this legislation should contact the Senators and urge passage of the bill."

The Senate's failure to act marked another turn in the tortuous path taken by the legislation. Helms' hold was at least the third one placed on the bill in the last few days.

Sen. Diane Feinstein, D-Calif., released a hold on the legislation earlier Thursday, which had prevented consideration of the bill on Wednesday night, after she received assurances that musicians had agreed to the measure, according to knowledgeable sources.

On Thursday, a Feinstein spokesman declined comment on whether she was the senator who had put the hold on the legislation but said she had no "current hold" on the bill.

Sen. Sam Brownback, R-Kansas, had placed a hold on the legislation earlier in the week. Brownback said he was originally concerned that the bill could be used as a precedent for other legislation or the royalty-setting process or could prejudice judicial action.

Senate approval of the legislation is necessary or the bill will die, and small webcasters would be forced to pay the full royalty set in June by the Librarian of Congress. The House approved the legislation before adjourning until late next month.

Both the House and Senate must approve identical versions of the legislation before it can go to the president for his signature. Unless the Senate approves the bill — sponsored by Rep. F. James Sensenbrenner Jr., R-Wis. — it will die, as it is unlikely that Congress would consider it in a lame-duck session.