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Radio and webcasting organizations like Clear Channel, Pandora, and Salem, along with other industry parties like the Consumer Electronics Association, have today announced the formation of the Internet Radio Fairness Coalition.

The group formed to lobby Congress to pass the IRFA, or Internet Radio Fairness Act of 2012, which (among other measures) would require the same legal standard be used for determining sound recording royalty rates for all non-interactive digital music services.

The IRFA is a bill in both houses of Congress, H.R.6480 and S.3609. The bills were introduced by Reps. Jason Chaffetz (R-UT), Jared Polis (D-CO), Darrell Issa (R-CA), and Zoe Lofgren (D-CA) in the House and Sen. Ron Wyden (D-OR) in the Senate.

"We believe that market-based solutions are the way to go," said Bob Pittman (left), CEO of Clear Channel. "But in the absence of these agreements, the CRB needs to have and consider more relevant information so they are better able to develop a rate structure that will lead to a healthy, sustainable Internet radio marketplace. This will enable artists to earn more and connect more with their fans, consumers to have more choices, and entrepreneurs to invent and invest in new services."

Currently, government arbitrators base royalty rates for satellite and cable radio using a legal standard called 801(b). It requires the judges to consider how their decision would affect the industry and the public's access to copyright, as well as take into account the investment made by both copyright owners and licensees. Internet radio's royalties are based on the controversial "willing buyer / willing seller" standard, which does not take into account the concerns of 801(b). Rather, judges are instructed to set a rate they think a hypothetical "willing buyer" and "willing seller" would agree to in the marketplace.

The existence of different standards for different forms of radio has led to a situation in which satellite radio operator SiriusXM pays about 8% of its revenues for the use of copyright sound recordings, while webcasters are faced with obligations of 50% to more than 100% of their revenues. As an example, leading webcaster Pandora will pay nearly 70% of its revenue (based on Q1 FY 2013) for sound recording royalties.

"Legislation that establishes a fair royalty rate setting-standard for Internet radio will drive investment in webcasting, which ultimately offers greater opportunities and more revenue for working artists," said Pandora Founder and Chief Strategy Officer, Tim Westergren (right). "Internet radio has been shown to help decrease music piracy and increase music sales. When the digital music sector is allowed to grow and innovate, everybody wins."

Other founding members of the Coalition include 977 Music, AccuRadio, the Computer and Communications Industry Association (CCIA), Digital Media Association (DiMA), Digitally Imported, Engine Advocacy, National Religious Broadcasters Music License Committee (NRBMLC), Radio Paradise, and the Small Webcaster Alliance (SWA).

The Internet Radio Fairness Coalition has launched a website at InternetRadioFairness.com.

Well, that didn't really happen -- only in a "Saturday Night Live" skit over the weekend. But, hey! Leading webcaster Pandora was the basis for an SNL sketch! That's nearly as cool as having a story in The Onion.

Following a loss of power at Pandora headquarters, intern Devin (played by musical guest Bruno Mars), hoping to maintain listeners' streams, is forced to impersonate several popular singers (we had no idea how much Green Day's Billie Joe Armstrong sings like Jim Carrey's Fire Marshal Bill Burns character).

The bit works particularly well when a Michael Jackson channel listener keeps skipping songs!

Watch it here.

As it's done so well in the past, leading webcaster Pandora is showing an expert's edge in gathering support among its listeners and their representatives in Congress for the newly-introduced Internet Radio Fairness Act. Now, in his blog, Pandora founder Tim Westergren makes the case that a healthy, thriving Pandora is important for the future viability of artists.

Westergren reveals that his service in 2012 will pay $100,228, $138,567 and $114,192, respectively, in royalties for the use of music by Donnie McClurkin, French Montana, and Grupo Bryndis.

"They are artists whose sales ranks on Amazon are 4,752, 17,000 and 183,187, respectively," Westergren wrote. "These are all working artists who live well outside the mainstream - no steady rotation on broadcast radio, no high profile opening slots on major tours, no front page placement in online retail. What they also have in common is a steady income from Pandora."

He also reveals that his service will pay nearly $3 million each in royalties to play the music of performers Drake and Lil Wayne; for Coldplay, Adele, Wiz Khalifa, and Jason Aldean, it's more than a million dollars each.

"For over two thousand artists Pandora will pay over $10,000 dollars each over the next 12 months... and for more than 800 we'll pay over $50,000, more than the income of the average American household."

Further, he cites research from the NPD Group that concludes that Internet radio has a positive effect on both music sales and curtailing music piracy.

While record label-, artist-, and performer-lobby groups and unions like musicFIRST, AFTRA, and the AFM have publicly spoken against the IRFA, it's clear Westergren is looking to appeal to the actual artist members to support royalty reform.

"Making performance fees fair for Internet radio will drive massive investment in the space, accelerating the growth of the overall sector, and just as importantly accelerating the development of new technology that leverages the incredible power of the Internet to build and activate new audiences. That's where the great opportunity lies in the long run. The short-term reduction in revenue would be rapidly swamped by the overall growth of the sector. Imagine the impact on artists if this industry grew to become 25% or even 50% of radio listening," he concludes. "Artists, this is your future. Own it."

Read Westergren's blog here. Business Insider has coverage here. 

TuneIn and Backbone Networks are live streaming panels from the SF MusicTech conference today until 8pm CT (6pm PT) across three channels.

The streams are free to listen. The direct link to the audio is here (or simply search for "SF MusicTech" from any TuneIn product).

Some of the conference highlights that will be streamed (all times Pacific):

• A conversation with Tim Westergren, Pandora, at 10:45am
• A panel featuring Michael Franti at 4:30pm
• Thomas Hutchings, TuneIn, discussing "The Connected Car" at 10:45am

TuneIn is the free online audio agggregation and tuning service that offers over 70,000 stations of music, sports, news, and current events from around the world. Backbone Networks creates "complete Internet radio stations" and networks of stations, taking care of the technical part of broadcasting. Backbone operates and hosts the largest network of college and high school noncommercial educational (NCE) radio stations, as well as public radio, commercial and sports radio stations.

Pandora has released its self-reported listening for September. Listeners spent 1.15 billion hours with the service (up 67% from last September, but slightly off from August's 1.16 billion (see August's numbers here)). Pandora says they now have 58.3 million "active" listeners (up 49% from September 2011; that number was 56.2 million in August 2012). Finally, Pandora reports its share of "total U.S. radio listening" for September was 6.53% (it was 6.30% in August, and 4.03% in September 2011).

Meanwhile, a federal court has tossed a lawsuit against Pandora, "for alleged privacy missteps following Facebook integration," CNet reports here.

The Next Web Insider reports a rumor that Microsoft is negotiating the acquisition of on-demand music streaming and subscription service Rdio. Read more here. We reported yesterday (here) that Microsoft is launching its own music service, Xbox Music, this month.

Streaming music service Rhapsody is getting space for its app with a special "visibly rich" interface on new LG, Panasonic, and Samsung "smart" TVs. Read more in Engadget here.

Pandora is once again enlisting the power of its massive listenership -- not to mention some good old-fashioned professional lobbyists -- in hopes of getting lawmakers on board the recently-introduced Internet Radio Fairness Act.

The IRFA would instruct copyright judges who determine copyright royalties to use the same legal standard for Internet radio royalties as are used for satellite and cable radio. Internet royalties are currently based on a different standard, and webcasters pay a vastly higher percentage of their revenue to use music than other forms of radio.

Shortly after the bill dropped this week, Pandora began directing users to its dedicated "Support the Internet Radio Fairness" page. The page features a one-minute video of founder Tim Westergren explaining the bill and how to contact their Reps and Senators (using links on the page). There's a "frequently asked questions" section with further explanation, and links to post to Twitter (you can search the hashtag #FairNetRadio to see the traffic) and Facebook. Pandora listeners also received an e-mail from Westergren (here) requesting their help.

Pandora has in the past asked listeners to get behind its legal fights, with enthusiastic results.

Meanwhile, the company has also reportedly enlisted Washington, D.C. law firm Constantine Cannon for lobbying help with lawmakers. According to LegalTimes' blog The BLT (here), Pandora spent $90,000 on federal lobbying during the first half of this year.