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FM-Tuner Mandate Dealt Setback

Washington – A proposal by radio broadcasters to mandate FM
tuners in cellphones and other portable devices hit a roadblock.

The mandate,

opposed by CEA and CTIA

, was part
of a package of legislative

unveiled this week

by radio broadcasters to settle a royalty-payment
dispute with the music industry. Under the package, broadcasters would agree to
pay royalties for the first time to
musicians and music

law, terrestrial radio
stations have paid royalties
only to songwriters and music publishers, but new broadcast media such as satellite radio and
webcasters have had to pay royalties to all of the groups.

Through an organization called


however, the music industry announced its opposition to the NAB’s proposed package,
contending the National Association of Broadcasters rewrote an agreement worked
out with the music industry during the summer.
Musicfirst was founded to lobby Congress to enact legislation
requiring the royalties.

“We are deeply troubled by the NAB’s rewrite of the hard-fought
agreement Musicfirst struck with broadcaster negotiators this summer,” said
Musicfirst adviser Tom Matzzie. “That agreement on fundamental economic terms
was jointly communicated by the NAB and Musicfirst to Congress in late July.”

The July agreement, Matzzie contended, “was a very tough
compromise that required substantial give on both sides.”

In the proposals put forth this week by NAB, he continued, “the
radio broadcasters unilaterally cut their digital royalty rates and lowered
their terrestrial royalty payment.” The alleged changes “might even be worse
for the music community than the status quo,” he added.

The NAB has been in talks with the music industry to forestall music-industry-backed
proposals to impose royalties higher than those in NAB’s package of proposals. The
tuner mandate, which had also been endorsed by Musicfirst, was designed to
encourage the music industry to lower its royalty-rate demands in return for potential access to
more listeners through portable devices.