Revised HR 5469 Passes Unanimously

Kurt Hanson exults:

In a stunning victory for webcasting, both the Senate and the House of Representatives unanimously passed a revised version of H.R. 5469 late last night that clears the way for copyright owners to offer webcasters a percentage-of-revenues royalty rate, essentially allowing the parties to mutually agree to override the CARP decision of last spring.

The Senate passed the bill at 10:32PM ET and the House passed it at 2:44AM. It now goes to President Bush for his signature.

The bill was actively supported by virtually all players on both sides of the debate this year, including the record industry, artist representatives, large webcasters, small webcasters, college radio representatives, and religious broadcasters.

In what was viewed as a surprise by some observers, the legislative staff in the office of retiring Sen. Jesse Helms (R-NC) apparently played an active and valuable role in crafting what the parties concluded was a much better piece of legislation than the one Helms blocked at the last moment late last month.

Rates and terms removed from legislation

The key difference between the bill that the House passed in October and the revised bill, renamed the “Small Webcaster Settlement Act of 2002,” is that Congress did not establish any definition of “small webcaster” or set any royalty rates in the final version of the legislation.

Rather, the bill grants both sides the right to enter into a voluntary agreement “without fear of liability for deviating from the fees and terms of the July 8 order” (i.e., the Librarian of Congress’s modified CARP decision).

Specifically, the bill does so by permitting the receiving agent of royalty payments (i.e., SoundExchange) to negotiate on behalf of all copyright owners, whether they are members of SoundExchange or not, for the period beginning October 28, 1998 (i.e., the passage of the DMCA) and ending December 31, 2004.

Under the new mechanism established by this act, the voluntary agreement envisioned would be submitted to the Copyright Office, published in the Federal Register, and subsequently made available to all qualifying webcasters.

However, the bill grants the receiving agent that authority to make a settlement with the small commercial webcasters only until December 15th — so the clock is ticking for both sides to “paper the deal.”

The version of the bill passed last night also suspends ALL royalty payments due from noncommercial webcasters until June 30, 2003, giving both sides time to work out a new voluntary royalty structure.

Furthermore, the bill adds a new definition of “noncommercial” that permits webcasters who are currently for-profit entities to file for nonprofit status and take advantage of this option as long as they have a “commercially reasonable expectation that such exemption shall be granted.”

This provision seems to permit any “hobbyist” webcaster to make a choice of whether they would like to be a for-profit business or a nonprofit. The bill gives the parties involved until May 31, 2003 to negotiate their voluntary license….

Hanson’s assessment is continued at the link above. This proves once again that you never know from whence your blessings may flow, although I am not sure this one noble action will rehabilitate Jesse Helms’ historical reputation. It surely can’t hurt however.

UPDATE
The text of the bill is here.