After a furor of complaints from Pandora users and concession by the National Association of Broadcasters (NAB), the U.S. House of Representatives has unanimously passed the Webcaster Settlement Act. It paves the way for private agreements with SoundExchange on music royalty rates and exemption from the Copyright Board mandatory rules that would have put many Internet radios stations, including Pandora, out of business.

No opposition is predicted in the Senate where the bill has now arrived.

The issue came to a head recently when Tim Westergren, Pandora's founder, told his customers that he was close to pulling the plug on Pandora due to onerous royalty rates that would have been imposed by the U.S. Congress Copyright Board.

Internet radio stations had been paying $0.08 per song, but the Copyright Board had ordered that that amount rise to $0.19 by 2010. That would have put Pandora and others out of business.

The NAB has previously opposed the legislation, but relented after meeting with Rep. Howard Berman (D-Calif.) that led to pushing back a deadline that would then allow the NAB organizations time to competitively reach similar royalty agreements.

"This is a truly historic moment for Internet radio and its listeners," said the bill's author, Representative Jay Inslee (D-Wash.) of the Energy and Commerce Committee. "There may now be a light at the end of the tunnel in the fight over Internet radio royalties."

After the Senate passes the bill and signature by the president, private royalty negotiations can resume, and Pandora along with other Internet radio stations look to have a considerably brighter future.