Small and noncommercial webcasters won a reprieve when the collection agency SoundExchange announced that the stations could continue streaming music without fear of paying increased royalty fees set to take effect Sunday.

Representatives from various webcasters, Congress and SoundExchange met Thursday and decided there should be an effort to save the webcasters who might be forced to shut down because of the increased fees established by the Copyright Royalty Board.

SaveNetRadio spokesman Jake Ward said Friday it appears as though the "roundtable" discussion, which was in front of the House Commerce Committee, was the first productive meeting that might bring a resolution for the Internet radio industry.

In an exclusive interview with Radio and Internet Newsletter, SoundExchange Director John Simson said that webcasters could continue operating after the July 15 deadline without the threat of legal action from SoundExchange. The nonprofit performance rights agency represents hundreds of recording companies and thousands of artists in receiving fair compensation for the licensing of their music.

"For the people who want to comply with the law and are in bona fide negotiations with us, we don't want those people to be intimidated. And we don't want them to stop streaming." Simson told RAIN Thursday night. "That's just as long as they're continuing to pay under the license they had."

Previous agreements between SoundExchange and webcasters provided accommodating rates for small webcasters and public radio stations. Smaller webcasters, for example, could pay a flat fee of about 12 percent of their revenue in royalties instead of the per-listener, per-hour fee paid by others.

But the Copyright Royalty Board ruled in March that Internet radio stations will see royalty fees for each song they stream escalate every year, going from 0.08 of 1 cent in 2006 to 0.19 of 1 cent by 2010. The rate applies to per song, per listener.

The rates apply to all digital audio transmissions and would boost fees for many webcasters by about 300 percent to 1,200 percent, which could threaten their survival.

Despite SoundExchange's willingness to negotiate, some stations are taking precautions since the word of SoundExchange is not the word of all record and copyright owners.

"SoundExchange cannot speak for (other owners)," said Paul Maloney, editor of RAIN.

As of Friday afternoon, meetings were taking place to "iron out" a compromise that would provide lower rates for nonprofit broadcasters such as KCLU (88.3 FM), a National Public Radio station in Thousand Oaks.

"We still don't have the details of what the agreement may be," Jim Rondeau, director of operations and programming, said in a prepared statement.

For now, Rondeau said the station will continue its music streams.

"Either way, as long as the Copyright Royalty Board's decision goes into effect on July 15, there is a chance that streamers will be liable for the higher rates that they've approved," Rondeau said. "We're hopeful that a compromise can be reached. There's just no guarantee of that."

Andi Sporkin, vice president of communications for NPR, said NPR and CPB are confident that public radio stations can continue their music streaming operations for the next three months as good faith discussions continue.

"At this time, public radio stations will continue music webcasting without limit to visitors to their webstreams or changes in their current operations," Sporkin said.

Meanwhile, other webcasters like AccuRadio will continue to stream online.

"I'm confident that we'll be safe until a resolution is reached," Maloney said. "We've paid our royalties up to now, and we'll continue to pay them according to the old rates."

AccuRadio now pays 12.5 percent of revenue under the Small Webcasters Settlement from 2002.

Kurt Hanson, chief executive officer of AccuRadio.com, said in his newsletter that a negotiation also was made with larger webcasters like Pandora, Rhapsody and Live365 on the $500-per-channel "minimum fee."

At the meeting, SoundExchange offered to accept Digital Media Association's suggested cap of $50,000 per service, which is $500 per channel up to 100 channels.

Amina Fazlullah, staff attorney of U.S. Public Interest Research Group, said she believes SoundExchange made the last-minute offer in order to keep some of the bargaining power with webcasters before the decision is turned over to Congress.

In response to the July 15 deadline, the House of Representatives' Small Business Committee introduced bill HR3015, which aims to give the parties 60 days to negotiate.

According to RAIN, sources close to the bill expect it to pass quickly through Congress.

If SoundExchange is unable to negotiate fairly within 60 days, then Congress will have the opportunity to legislate SoundExchange out of the picture via the Internet Radio Equality Act (HR 2060), which currently has 136 co-sponsors, Fazlullah said.

The piece of legislation would nullify the royalty increases proposed by the CRB and instruct the board to establish a fairer royalty rate that is similar to the fees currently paid by satellite radio, Rep. Lois Capps, D-Santa Barbara, said in a prepared statement.

The bill also will continue gaining support in case fair negotiations are not reached.

"It's 60 days for webcasters to negotiate, but it's also 60 days for Congress to gain support for the bill," Fazlullah said. "I think that (SoundExchange) is keeping an eye on what Congress is up to, and they know that this bill is quickly gaining momentum."