Proposed licensing fees for the use of MPEG-4, the latest standard in video compression, have suppliers of streaming media technologies questioning whether they will be able to support the new standard.

MPEG LA, a licensing body for 18 patent holders of MPEG technology, is considering charging licensees 25 cents for every MPEG-4 product used. But major suppliers of streaming media on the internet say the proposed terms will have to be renegotiated—or the technology is doomed to fail.

According to a recent press release, Apple Computer said it will not pay for MPEG-4 compression under the proposed licensing terms. At the same time, the company did not dispute the increased efficiency of the new MPEG-4 product.

“MPEG-4 is the best format for streaming media on the web, and QuickTime 6 is the first complete MPEG-4 solution,” said Philip Schiller, Apple’s senior vice president of worldwide product marketing. “MPEG-4 is poised for great success once the licensing terms are modified to allow content providers to stream their content royalty-free.”

Apple’s opposition to the proposed licensing terms has led the company to delay the release of its latest QuickTime 6 media player until an agreement is reached.

MPEG LA rejected claims that its proposed licensing fees will make the new technology instantly obsolete. But the group also said it would continue to negotiate with online media vendors.

“We have every interest in trying to smooth out some of the rough edges,” said Larry Horn, vice president of licensing and business development for MPEG LA.

Horn said that while makers of online streaming media players—including Apple and RealNetworks Inc.—have voiced displeasure with the original proposal, these companies understand the need for some type of fee structure where the use of online media is concerned.

“There were objections, there’s no doubt about that,” he said. “But we take those objections seriously. It’s in our best interests to find terms that the companies can agree on.”