The recording industry's efforts to compensate for lagging CD sales by promoting hikes in royalties rates, suffered another serious setback yesterday in the US as a panel of judges ruled mechanical royalties rates should stay put.

Apple's threat earlier this week to shut down its iTunes service cast a brighter spotlight on the Copyright Review Board's royalties review process than at any time since 1909. As of this morning, the CRB hasn't actually publicly announced its decision yesterday, although the Associated Press learned from sources who participated in the meetings with the three-judge panel that it decided not to raise the rates for mechanical reproduction royalties above the current base rate established in January 2006.

That rate now remains set at 9.1 cents per song, or 1.75 per minute for any song lasting longer than 5:12, whichever is higher.

As most iTunes customers know, Apple sells songs for a flat fee of 99 cents -- a price with which most customers now seem quite comfortable. Although Apple has yet to validate this information officially, based on testimony it's given in the past, it's believed the company already pays record companies between 70 and 75 cents for each track iTunes sells. Those companies were believed to have proposed a mechanical royalty rate increase to 16 cents per track, which could have cut into Apple's already razor-thin margins by as much as 27%.