**BREAKING NEWS*** Radio Board forwards royalty offer.

story by Inside Radio

The NAB Radio Board voted today to present the record labels with a list of terms by which broadcasters would agree to embrace a performance royalty. Terms of what stations would pay will vary depending on whether Congress goes along with an FM-on-cell phone mandage. Before the labels are presented with the outline, the NAB Joint Board of Directors must sign-off on the proposal. That could come tomorrow.

"NAB remains 100% opposed to performance fee legislation pending in Congress," NAB Radio Board chair Caroline Beasley says. "However, in a good faith effort to resolve this issue in the best interests of both radio and the music industry, we have endorsed a solution ensuring that broadcasters have a foothold in digital platforms of tomorrow."

The outlined proposal includes:

• Permanent removal of the Copyright Royalty Board from rate-setting of transmissions of terrestrial on-air music or Internet streaming.
• Resolution of the "AFTRA issue" outside of the legislative process by the musicFIRST coalition that would facilitate simulcast of over-the-air radio commercials on the Internet.
• MusicFIRST's acknowledgment and recognition of the unparalleled promotional value of terrestrial radio airplay.
• Simplified airplay reporting requirements similar to the model used by ASCAP/BMI.
• Congressionally-mandated radio-activated chips in mobile devices such as cell phones and BlackBerry smartphones, with an acceptable phase-in period and inclusion of HD Radio chips when economically feasible.

The Radio Board says if a legislative mandate becomes initially unattainable, radio broadcasters would agree to an initial performance fee payment of 0.25% of net industry revenue. Under this scenario, the performance fee would mirror the actual percentage of radio-activated mobile phones in the United States. Once market penetration of radio-activated mobile devices reaches and maintains a level of 75% of all mobile devices, broadcasters agree to pay the full 1% terrestrial transmission performance fee.

Assuming a successful mandate of radio-activated chips in mobile devices, streaming rates for webcasts and through 2016 would be reduced. In the event that a legislative mandate for radio chips in mobile devices is not achieved, the streaming rate reduction would not take effect until 50% of mobile phones have radio chips.

Read the complete Board’s proposed term sheet below:

Term Sheet for Performance Rights Agreement

The attached term sheet describes the structural framework for an agreement between the musicFirst coalition and the NAB to proceed towards legislation under which broadcasters would agree to make payments, strictly to the limited extent described below and subject to implementation of all the terms described, for performances associated with the music played on terrestrial radio and broadcast streaming. In exchange, members of the musicFirst coalition agree to recognize the promotional value that plays on terrestrial radio provide and further agree to work cooperatively with the broadcast entities to enact legislation to implement all aspects of this framework in a mutually agreeable manner. It is specifically understood that if any term of this framework is not enacted, the agreement of the parties is null and void.  It is further specifically understood that any change to the terms of the agreement must be by mutual agreement of the parties.

Term Sheet for Performance Rights Agreement:


http://www.nab.org/documents/newsroom/pdfs/102510_NABTermSheet.pdf