The U.S. Senate has passed the Webcaster Settlement Act, which allows Internet radio to continue negotiations over royalty rates in an attempt to lower those set by the Copyright Royalty Board. As previously reported, the Act passed the House of Representatives over the weekend. Next up is the White House, where President Bush is expected to sign off on the Act.

Pandora founder Tim Westergren told CNet, "I'm relieved, optimistic, and grateful to our listeners." "This is a welcome and encouraging development and a sign of the constructive working relationship between the music industry and Webcasters," said Mitch Bainwol, RIAA Chairman/CEO, in a statement. "Together, we want to make this marketplace work for both music fans and music creators."

NAB EVP Dennis Wharton stated, "With this legislation now headed to the White House for President Bush's signature, NAB looks forward to sitting down quickly with SoundExchange to craft equitable streaming rates that enhance the online music experience and expose more artists to our listeners."

The bill now gives Webcasters and the music industry until February 15, 2009 to reach a new deal on royalty rates.

Live365, one of the largest Internet radio providers, is proposing a settlement for small Webcasters. In a statement, the company said, "As part of any settlement package going back to Congress, Live365 will propose that SoundExchange (SX) include the special rates and terms for small webcasters as were previously enacted by Congress (Small Webcaster Settlement Act of 2002) and extended by SoundExchange (Small Commercial Webcaster Term Sheet 2007)."

"This would resolve the issue with SoundExchange's current Small Webcaster offer which is limited to only a portion of artists--those that have directly registered for representation by SX. This bill insures that existing agreements reached between SX and webcasters would cover all artists' performances."

"All parties have recognized the importance of a vibrant small webcaster community by providing them special rates and terms from the beginning," stated Live365 CEO Mark Lam. "The public reaps the benefits with access to tens of thousands of artists, and musical diversity heard nowhere else. Live365's thousands of individual small webcasters cover some 270+ genres of music and play 200,000 different artists each month. And we're just one network."