Internet radio got a boost Tuesday when the Senate approved a bill that says Congress must honor any royalty rate agreement reached between online radio stations and copyright holders.

Internet radio got a boost Tuesday when the Senate approved a bill that says Congress must honor any royalty rate agreement reached between online radio stations and copyright holders.

Senators approved the Webcaster Settlement Act of 2008, which allows stakeholders to broker a deal over royalty payments without the threat of government intervention.

The House approved the bill on Saturday, and it now heads to President Bush for his signature.

Internet radio stations are fighting a March 2007 Copyright Royalty Board decision that set royalty rates for Internet radio streaming at a price Web radio stations considered financially ruinous.

Internet radio royalties operate under a government license, so Congress would typically need to approve any deal reached by webcasters and copyright holders. The bill approved Tuesday allows them to negotiate without that government intervention. The two sides have until February 15 to come up with a deal on their own.

Whether the two sides are able to reach a deal remains to be seen, but Tim Westergren, founder of Internet radio station Pandora, was hopeful.

"We still have to finish up the negotiations, but now the table is set," he wrote in a Tuesday blog post. "Thanks to everyone for your incredible support over the past few days. It was just extraordinary."

Westergren issued a call to supporters on Friday to contact their representatives and senators about the issue, and those calls and e-mails reportedly helped move the legislation along.

That support "was a constant reminder to everyone involved in this process about the importance of Internet radio to music lovers and musicians alike," he said. "Your level of involvement was unprecedented."

Westergren told Congress in July that current royalty rates would cost Pandora $18 million of its estimated $25 million in revenue for 2008.

"This legislation is not the final answer but it is an essential step toward a lasting and much-needed solution," said Jake Ward, a spokesman for Web radio coalition SaveNetRadio, of which Pandora is a member. "Today's approval of the Webcaster Settlement Act has cleared the way for private negotiations that hopefully will confirm Internet radio's future."

UPDATE: President Bush signed this bill into law on October 16.