Many believe that online radio is the successor to all radio, not just AM and FM but also shortwave. I personally find that hard to believe unless broadband access becomes more common than it is now. But just about everyone agrees that the royalty rates for online radio in the United States are set too high for most stations to survive. It would therefore seem obvious to me that the rates need to be lowered. For once, that may be happening.

The United States Senate recently passed a bill which granted a brief reprieve to online radio stations in the United States. The House of Representatives had already unanimously passed the same bill three days earlier. The bill now goes to the President for his signature.

The bill itself doesn’t set any royalty rates for radio stations. What it does do is allow the online radio stations and the copyright holders to negotiate without requiring Congress to approve the final deal. The two sides still need to come to an agreement before February 15, 2009.

If online radio in the United States is shut down, that still won’t affect radio in the rest of the world. I’ve found that people are far more willing to listen to foreign radio stations, even some odd ones, than I think they would have been in the past. Perhaps years of truly dreadful radio has made them more open to experimentation. But I think it will be a shame if online radio innovation is relegated to outside the United States.