The law should be neutral on transmission method. If internet and satellite stations have to pay, then terrestrial radio should too. If terrestrial radio doesn't have to, then satellite and internet shouldn't either. Any rule other than being neutral on transmission method would be as stupid as charging the royalty for AM stations but not for FM.
Many internet broadcasters went belly up when they started to have to pay this royalty.
They want to use a sliding scale too. Which would exempt left of the dial hate speech talk radio (which typically uses alt-country, worldbeat, and soft indie pop to solicit pledge drive donations to fund the hate speech).
Either the artists are being exploited or they aren’t. The size of the exploiter doesn’t matter. The industry’s anger at filetraders (which consists of individuals) proves it.
Terrestrial radio doesn’t have to pay because it is a legacy technology that NEVER had to pay.
The recording companies own enough legislators that they didn’t want to make that error again.