The group formed by labels to distribute streaming royalties to artists offered a compromise to small Webcasters this week.
SoundExchange offered to extend the terms of legislation that expired in 2005. It had set temporary below-market royalty rates for small Internet stations in order to provide them time to build their businesses.
Under this proposal, rates for those with revenues of $1.25 million or less would stay the same through 2010. After that, small Webcasters would pay royalty fees of 10 percent of gross revenue up to $250,000 and 12 percent for gross revenue above that amount.
A subcommittee of the House Judiciary Committee has urged SoundExchange and small Webcasters to negotiate a compromise.
Artists, labels, Webcasters and listeners organized as SaveNetRadio have argued that unless there is a compromise before new royalties kick in July 15, many Internet radio services will go bankrupt and cease Webcasting. At the urging of SoundExchange, a panel ruled in March to raise streaming royalties, which would triple.
A SaveNetRadio spokesman told CNNMoney the proposal would force small Webcasters to remain small and penalize larger ones.
AFTRA is among those speaking up in favor of the new offer: “AFTRA recording artists want Webcasters to succeed, especially small niche Webcasters who introduce the passion and excitement of diverse forms of music to fans around the world,” the union said in a statement.