A bill in Congress could stop a federal agency from killing off a great musical resource.

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Whenever a friend of mine goes online, I invariably ask one question: “Have you been to Pandora.com?”

Launched in 2000 by Oakland musician Tim Westergren, Pandora is unlike other terrestrial and Internet radio stations. Visitors to the interactive site can create their own streaming radio station by entering the name of a favorite band. From there, Pandora makes a play list that includes songs by the chosen group along with a number of tracks by artists that have similar musical traits.

The unique website – which ranked 17 in PC World Magazine’s 100 Best Products of 2007 (above pioneering website YouTube and the über-popular Apple music player the iPod) – has a staff of 50 musicians who analyze the songs featured on the site and take notes on each track’s musical details. They then link the songs of various artists who share common characteristics.

On a recent visit to Pandora, I created a play list by entering the name of alt country and rock outfit Wilco. While Pandora started me off with the Wilco track “Muzzle of Bees,” it eventually added a surprising parade of acts including Spoon, The Strokes and The Wallflowers.

Unfortunately, the days of having a perfect mix of songs streaming from Pandora might come to a crashing halt with the enactment of a royalty hike for Internet stations scheduled to take effect on Sunday, July 15. While Internet radio stations used to pay a percentage based on revenues or website usage, the Copyright Royalty Board decided this past March on new charges for web-based music broadcasters. The new royalty rates for Internet radio programmers would include a $500 per stream minimum annual fee, and a flat rate for each song played – with no regard for the size of the station. These charges would also be retroactive back to Jan. 1, 2006. In addition, the flat rate for playing a song would increase from $.0008 per play in 2006 to $.0019 per play in 2010.

According to the owners of small Internet radio stations, the royalty change would effectively lead to the demise of their companies. Westergren has said that the new rates would be “ruinous” for Pandora.

Rusty Hodge of San Francisco's eclectic web radio station SomaFM, contends that the new royalty fees would amount to three times the total income his outlet brought in during 2006.

The loss of these smaller web radio stations would be a blow to music listeners.

Radioparadise.com, a popular site based out of Paradise, California, plays a truly eclectic selection of artists – from the sleek electronica of Thievery Corporation to the guitar-heavy blues of Stevie Ray Vaughan – that breaks from traditional radio’s notion of broadcasting just one genre of music. Meanwhile, SomaFM’s streaming audio program “Groove Salad” plays artists far below mainstream radio’s radar, ranging from A Forest Mighty Black to ZKA4T. There’s nothing like this on the usual play lists proffered by terrestrial radio.

While artists definitely need to get paid when their work is played, the closure of net radio stations due to increased royalties will also hurt independent acts. Without the push and financial backing of the major labels, independent artists have begun to capture wider audiences – due in part to non-mainstream web radio stations.

A recent editorial in the Baltimore Sun stated that independent artists contribute 10 percent of what is broadcast on terrestrial radio and 37 percent of the music streamed on web radio.

Time is running out on the issue, but there is still hope for web broadcasters due to a bill in Congress. On April 26, Representatives Jay Inslee (D-Wash.) and Donald Manzullo (R-Ill.) proposed the Internet Radio Equality Act. The measure would annul the CRB’s decision and would put into effect a royalty fee that would amount to around 7.5 percent of a web radio station’s revenue. The 7.5 percent of revenues rate roughly equals the same royalty fees that satellite radio programmers currently pay. (Believe it or not, terrestrial radio stations do not have to pay these “performance royalties.”)

Supporting the Internet Radio Equality Act are the Digital Media Association (DIMA) and Savenetradio.org. While Savenetradio.org is a rallying point for artists, labels, webcasters and listeners on the issue of the CRB’s rate increase, DIMA is a trade organization that represents online audio and video heavy hitters, including Yahoo!, AOL and MTV. Joining forces with the bigger outlets are smaller web radio stations Pandora and NativeRadio.com, a site streaming music by Native American artists.

Currently, Savenetradio.com has an “Act Now” page that helps visitors contact elected officials to support the Internet Radio Equality Act. There, local voters can support the measure by calling US Senators Dianne Feinstein and Barbara Boxer. Don’t worry about getting in touch with our Representative Sam Farr about the proposed legislation: He has already signed on as a co-sponsor of the bill.

Go to savenetradio.org to help save Pandora.com and other unique web radio stations.