I thought I'd just summarize briefly for people who don't follow these issues:
Copyright law gives the record companies the right to prevent others from making copies of "their" music, except in certain cases where there is a "compulsory license" written into the law. In these cases, the record companies can't prevent anyone from using "their" music, but there is a mandatory fee that they must get paid. This "compulsory license" scheme was meant to keep the music industry from taking over the radio industry by simply refusing to license their music to certain radio stations (ones that didn't play ball, naturally). The U.S. Copyright Office sets the fees and revises them occasionally.
So the same idea was applied to webcasting music. In theory, this keeps the record companies from eliminating all-but-one or all-but-a-couple of the webcasters - anyone can webcast, you just have to pay the fee. However, if the record industry has too much influence over the process, they might try things like getting "compulsory license" fees set very high, or making sure that the record-keeping requirements are so onerous that it's impossible to comply with them.
In effect, this eliminates the "compulsory license" - because it's economically infeasible to comply with it. Webcasters can still seek individual licenses from the record companies, but this gets back to the original problem - the record companies have no obligation to make life easy for the nascent webcaster.