There were signs of a potential breakthrough in long-running negotiations between radio broadcasters and the recording industry over performance royalties, as the National Association of Broadcasters (NAB) released a proposed compromise framework that—for the first time ever—would require radio broadcasters to pay recording artists for the airing of their songs. The plan signifies a dramatic shift in strategy for the NAB, which, until this month, had strongly resisted the Recording Industry Association of America’s (RIAA’s) stance that broadcasters should pay for performance rights. Although radio broadcasters pay royalties to songwriters, the broadcast industry is exempt under U.S. copyright law from compensating recording artists for their performances. (However, satellite radio firms and webcasters are required to pay performance royalties, which amounted to more than $180 million industry-wide last year.) The Performance Rights Act now pending before Congress would extend performance royalty obligations to radio broadcasters, and the RIAA has been clamoring for royalty payments as revenues from CD sales continue to dry up. While the NAB has argued that the current copyright exemption should be continued as the airing of recorded performances amounts to free promotional advertising, sources indicate that NAB officials are keen on reaching a compromise that they could present to Congress in hopes of averting higher copyright fees that are under consideration in the performance rights bill. Under the NAB proposal, large radio stations would be required to pay 1% of their net revenues in performance fees, and smaller radio stations would qualify for a reduced rate or none at all. In exchange for such payments, the NAB is also calling on Congress to mandate the addition of chip sets that enable FM radio reception to every cell phone sold in the U.S. Terming the chip set mandate as “critically important,” NAB executive vice president Dennis Wharton said such a requirement would offer wireless consumers more choices for accessing music while providing broadcasters with a new platform through which they could compete against web radio. Although RIAA CEO Mitch Bainwol proclaimed that the NAB plan “signals a new day,” an official of the Consumer Electronics Association, speaking on behalf of cell phone makers, made his industry’s position clear: “we are completely, inalterably opposed to this.”