Clear Channel has revised its online agreement for indie artists and labels who want to upload their music to be considered for broadcast and digital downloading. The agreement, which came under the spotlight when the American Assn. of Independent Music (AAIM) emailed its members urging them not to sign the license, was interpreted as waiving artists' and labels' right to receive royalties.

A Washington, D.C.-based group, the Future of Music Coalition (FMC), began a press campaign condemning the license - and claiming that Clear Channel was in violation of a settlement agreement reached after an investigation of alleged payola. The group also filed a petition with the FCC on the issue.

The press coverage prompted Sen. Russ Feingold, D-Wis., to send a letter to Clear Channel, questioning the move, according to the senator's press release. However, the FMC has never contacted Clear Channel directly to discuss this issue, an FMC spokesman said in an email to Billboard.biz yesterday (July 19).

Clear Channel had been contacted directly by the AAIM and the Recording Artists Coalition (RAC), before the FMC press campaign began, to negotiate a change in the license, say sources close to the negotiations. The sources also state that the terms of the original agreement were likely drafted by an "overzealous lawyer" who drafted the provisions too broadly.

AAIM and RAC have been working with Clear Channel on acceptable, revised contract language, according to a letter being sent by the three parties to the FCC and obtained by Billboard.biz.

According to the letter signed on behalf of Clear Channel, AAIM and RAC, "the revised license will offer three options for an artist or independent label to submit their music for consideration and possible airplay. They can choose to submit their music for: 1) terrestrial radio broadcast and Internet radio simulcast; 2) on-demand streaming; or 3) digital downloading. All statutory royalties established now or in the future will be paid for terrestrial radio broadcast to the respective performing rights organization, and for Internet radio simulcast through SoundExchange (Option 1). Only public performance royalties to songwriters and publishers will be paid for on-demand streaming (Option 2). Royalties will be waived for digital downloading (Option 3). The licenses will be non-exclusive and can be terminated at any time."

The letter goes on to explain, "under Option 1, there is no option to waive any statutory royalties for terrestrial radio broadcast and/or Internet radio simulcast. Thus, there can be no claim that an artist is waiving a royalty in exchange for radio airplay. Recording artists will also have the right to choose whether or not to allow for on-demand streaming and digital downloading of their sound recordings without the payment of royalties (except for the public performance royalties paid to songwriters and publishers for on-demand streaming). This allows recording artists the choice of giving away their music as a promotional tool, or not, and the choice to revoke the license for any reason, at any time."

In a press release emailed late yesterday, the FMC appeared to take sole credit for the change. "The move comes after a week of intense pressure from the Future of Music Coalition, which launched a campaign on July 9 to end the requirement. The capitulation is a major victory for the small non-profit organization... It also is a story of how a small non-profit organization beat back the nation's largest and most powerful radio broadcaster."

Andy Levin, Clear Channel executive VP/chief legal officer, said in a statement: "This is a perfect example of no good deed goes unpunished. We never had any intention of not paying licensing fees for radio air play or for online streaming of simulcast programs. RAC and AAIM brought to our attention that the licensing agreement could have been construed otherwise, so we clarified it well before FMC filed its misleading and misinformed petition. FMC's allegations of a 'payola-like scheme' are irresponsible and totally false."

After FMC's press release yesterday, in response to an email from Billboard.biz, the FMC stated that "AAIM had a role in [resolving] this." In a document provided with that email entitled "Clear Channel Blow by Blow," it states in part: "It is important to note that FMC is the only artist organization that identified, promoted and fought against this egregious overreach by Clear Channel."

This statement is contrary to the letter sent to the FCC and Clear Channel's statement.

AAIM counts more than 200 members, including Epitaph, Sub Pop and Concord, among others.

According to the RAC Web site, the group represents artists such as Christina Aguilera, Beck, Neil Diamond, Joni Mitchell and Stone Temple Pilots, among dozens others.

It is unclear from the FMC Web site specifically which artists the group represents.