A bill which could have established more reasonable royalties for Internet webcasters while silencing non-commercial webcasters, has died in the Senate. We reported on October 12th that the bill could prevent small-scale and college-based Internet radio stations from operating, and asked readers to express their concerns to the government.

Last Wednesday, a "hold" was placed on the bill (H.R.5469) by an anonymous Senator to delay any vote. And when the Senate closed on Friday, going into recess for elections, the bill had failed to reach the floor for a vote. As a result, this incarnation of the bill is effectively dead. According to a report by The Register, strong opposition to the bill had reached the offices of Senators Joe Lieberman (D-CT) and John Kerry (D-MA).

The bill would have established a mixed bag of new royalties for Internet radio, but also would have suspended an October 19th due date for webcasters to pay expensive back-royalties. There was some concern then that, with the bill's defeat, many webcasters would imminently be required to shell out tens of thousands of dollars for music played between 1998 and the present.

In an unexpected last-minute move, the Recording Industry Association of America (RIAA) granted a partial extension on those back-royalties, and webcasters were only asked to pay up to $2,500, the Associated Press reported on Sunday. However, $2,500 is still more than some stations can afford. It will be interesting to see this week how many webcasters actually pay these back-owed royalties, and how many will simply ignore the RIAA and Library of Congress regulations. The webcasting royalties now imposed are not required of traditional radio broadcasters.

Not surprisingly, many large media outlets like Viacom/MTV reported the bill's demise as a total loss for webcasters. While it is true that negotiations for a new deal between the RIAA and webcasters must now start over, hundreds of non-commercial Internet stations will get a second chance to operate free from music royalties they cannot pay.

Though the battle has subsided, it is far from over. In its long game of attempting to silence alternative media outlets, big-media industry groups like the RIAA will continue to abuse their legislative influence. Keep watching here for the latest updates, and how you can help Internet radio make a comeback.