FM-Tuner Mandate Dealt Setback

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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

proposals 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 companies.

By 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.


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