MusicNet and Napster have reached a settlement with the U.K.'s MCPS-PRS Alliance over online and mobile royalty rates.

MusicNet and Napster have reached a settlement with the U.K.'s MCPS-PRS Alliance over online and mobile royalty rates.

In a statement issued today (Oct. 9) by the London-based Alliance, the two digital music service providers have struck a three-year deal. The British Phonographic Industry, MusicNet and Napster are now removed from the Copyright Tribunal proceeding.

The news comes on the heels of a settlement announced last week between the Alliance and the BPI, iTunes, O2, Orange, T-Mobile and Vodafone. Like that agreement, composers, songwriters and music publishers will receive 8% of gross revenue less value-added-tax when their music is offered in the current music services of MusicNet and Napster. These rates, however, are subject to minimum royalties.

The BPI and seven online services -- AOL, Apple iTunes, MusicNet, Napster, RealNetworks, Sony Connect and Yahoo! -- had contended that there was a discrepancy between the royalty fees charged by the Alliance for physical, broadcast and online products. The dispute was referred to the mediator on June 29, 2005.

In today's statement, the Alliance said, "again, all parties to the settlement welcome the agreement and are all committed to working together to drive the on-going growth of the legitimate digital music market."

The Copyright Tribunal proceedings are scheduled to continue in mid-November in respect of issues which remain unresolved between the Alliance and four other parties. In addition, a single issue remains outstanding for each of the mobile network operators and iTunes.