SoundExchange, the record industry entity that collects and distributes digital music royalties, announced on Tuesday an offer to extend the terms of the Small Webcaster Settlement Act (SWSA) through 2010, in a response to Congressional pressure to reach a compromise on the new royalty rates for streaming music set recently by the Copyright Royalty Board (CRB).

The 2002 act, which expired in 2005, set temporary, below-market royalty rates for small Internet radio stations to give them time to build their businesses.

Many webcasters have stated that the new royalty rates set by the CRB are so high that they will be forced off the air.

SoundExchange said the offer was in direct response to a letter from Reps. Howard L. Berman (D-Calif.) and Howard Coble (R-N.C.), who serve on the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, and requested that SoundExchange "initiate good faith private negotiations with small commercial and noncommercial webcasters with the shared goal of ensuring their continued operations and viability."

"Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small webcasters need more time to develop their businesses," said SoundExchange executive director John Simson.

"Artists and labels are offering a below-market rate to subsidize small webcasters because Congress has made it clear that this is a policy it desires to advance, at least for the next few years."

To qualify, webcasters must meet the definition of "small" set forth in the original wording of the SWSA.